Russia Report: May 14, 2001

AND SO IT BEGINS AGAIN? While some observers were expecting Putin to announce a cabinet reshuffle during the May holidays, the 7 May holiday was instead followed by what appears to be a new offensive against the last remaining outpost in Vladimir Gusinskii's media empire, Ekho Moskvy (see "RFE/RL Russian Political Weekly," l May 2001). Investigators from the Prosecutor-General's Office conducted a search of Ekho Moskvy's radio station on 10 May, seizing reams of financial and commercial documents. The prosecutor's office gave as its official explanation that it was looking for information in connection with its investigation of former Aeroflot executive Nikolai Glushkov; however, Ekho Moskvy General Director Yurii Fedutinov told Interfax that the search appeared to be related to "establishing the market price of the station" since a number of financial documents were taken.

The next day, one well-known journalist, Olga Bychkova, was called in for questioning. According to Ekho Moskvy, Bychkova was reportedly called in to discuss an on-the-air interview last month with a lawyer for Glushkov. After the interrogation, Bychkova told RFE/RL's Moscow bureau that she was unable to tell the investigators anything new since the entire conversation had already been published on the station's website. When asked if the summons to come to the prosecutor's office might have been intended as a tactic of intimidation, Bychkova answered that is a question of which she doesn't have an answer.

Ekho Moskvy ranks fifth in listenership in Moscow with 8 percent of Muscovites tuning in daily. Ekho Moskvy was founded more than 10 years ago and was not acquired by Gusinskii until 1994, when a depreciation of the ruble forced to company to sell some of its shares to Gusinskii, according to RFE/RL's Moscow bureau on 9 May. Ekho Moskvy's employees own 33 percent of the company and they have recently been trying to persuade Gazprom to sell back to it a 25 percent stake which was owned by Gusinskii and will soon pass to Gazprom.

But persuading Gazprom has been a difficult task, according to station director Yurii Fedutinov, while station chief editor Aleksei Venediktov frankly admits that it is unlikely to succeed. According to the "Financial Times" on 10 May, the employees have offered Gazprom $4 million for a 25 percent stake along with one share. Venediktov told RFE/RL on 9 May that "if Gazprom succeeds in taking the majority of the shares, we will soon be a government station, even if not from a formal [point of view]. Then I think that I, as editor in chief, and most journalists who came here after they left state radio, will have to leave this radio station. There will be only an 'echo' left of Ekho." (Julie A. Corwin)

Mikhail Yurevich Lesin According to some accounts, Media Minister Mikhail Yurevich Lesin was the chief architect of the dismantling of Media-MOST, including Gazprom-Media's recent takeover of NTV. For example, "Obshchaya gazeta" concluded in its issue no. 17 that Lesin is slated for dismissal because his chief task, breaking up Media-MOST, has been achieved. And, Lesin did sign his name to the now infamous protocol number 6 to a sales agreement between Media-MOST and Gazprom-Media, in which he agrees that criminal charges against Gusinskii would be dropped in exchange for Gusinskii agreeing to sell his company for $300 million (see "RFE/RL Newsline," 19 September 2000). That document is still available for viewing at the website http://www.geocities.com/abramson4/. After Media-MOST made the agreement public, Lesin received a verbal reprimand from Prime Minister Mikhail Kasyanov, but was not forced to resign.

According to "Profil" on 14 June, Lesin also played a central role in another one of Russia's biggest political scandals the previous year involving President Yeltsin's suspension of then Prosecutor-General Yurii Skuratov after the televised screening of a videotape of Skuratov cavorting with two unclad females, who were allegedly prostitutes (see "RFE/RL Newsline," 18 March 1999). Skuratov at the time claimed that video was being used against him to blackmail him into dropping an investigation into alleged corruption in Yeltsin's administration. According to the monthly, Lesin, who was then deputy head of All Russia State Television and Radio Company (VGTRK), convinced his boss Mikhail Shvidkoi, who was then VGTRK head, to telecast the video of Skuratov across the country. It was reportedly Lesin who coined the phrase used so often during that time, "a person, who closely resembles the Prosecutor-General."

In that article in "Profil," Lesin finished fourth in the ranking of Russia's most influential public-relations specialists. At the time Lesin was still deputy head of VGTRK, and according to the monthly had "enormous information and financial resources" at his disposal, including his effective control over advertising for all of the government's largest information holdings. At the same time, Lesin was one of the founders of Video International in 1991, which was the effective proprietor of all advertising time on the second TV channel, according to "Profil" on 12 July 2000.

Lesin's path to public relations/media kingpin was not a direct one. Lesin, 44, was born in Moscow, where he completed his studies at the Moscow Engineering and Construction Institute After graduation he worked on construction projects in Mongolia among other places. In 1987 he was one of the organizers of the business concern Panoptikum. In 1989, he directed the popular television program "Klub Veselekh i nakhodchivykh", and the following year headed the MA production company, which then founded the Radio and Television company, which was reorganized in 1991 into Video International, the advertising agency, according to the reference book, "Gosudarstvennye deyateli federalnogo urovnya" for 2000.

Like another PR wizard, Gleb Pavlovskii, Lesin entered politics when he joined the campaign effort for President Yeltsin. In April 1996, Video International received an order from Yeltsin's campaign headquarters to work on an advertising campaign for Yeltsin's re-election. Lesin was responsible for producing videos and distributing other kinds of campaign materials over the central and regional television. By October, Lesin was named head of the administration for public relations within the presidential administration, according to "Profil" on 9 October 2000. After Yeltsin's victory, Lesin was rewarded with the post of deputy chairman of VGTRK, where he worked until the Kremlin decided to prepare for the December 1999 State Duma elections.

In July 1999, Yeltsin tapped him to run the newly created Ministry for Publishing and Electronic Media, the creation of which was widely seen as part of the Kremlin's preparations for December 1999 State Duma elections. Lesin quickly won criticism from journalists soon after being appointed, with his announcement that his new ministry was going to be revising the law on media because "the media currently have more powers and opportunities than the state" (see "RFE/RL Newsline," 23 July 1999). Lesin at the time denied that plans were afoot to "nationalize NTV." In 2000 in a poll conducted of independent columnists, observers, and political analysts, Lesin was selected as the press's number-one enemy followed by President Putin.

Lesin has responded to criticisms mostly with disbelief and indignation, asserting on a number of occasions that there is no problem with freedom of speech in Russia today. Most recently, he said on 8 May that the transfer of ownership in NTV has had a positive effect on Russian mass media; Lesin said that the shift has succeeded in "reducing the politicking of the mass media and making them reassess their own positions on many questions, above all, those regarding their economic and financial independence." Regarding his own economic independence, in an interview with "Komsomolskaya Pravda," Lesin revealed that as media minister, he makes 12,000 rubles ($420) a month, and that he and his wife, son, two dogs, and one cat live mostly on his income earned before he became a government minister.

And regarding Lesin's past income sources, "Itogi," when it was then still owned by Media-MOST, noted on 6 March that in the instance of the downfall of Media-MOST, Lesin's Video International would finally receive access to the advertising markets of all national channels, including NTV. According to some political analysts, Lesin may soon have to return to private business, since he is likely to be dismissed in Putin's expected cabinet reshuffle. He will reportedly be dismissed not for his role in signing protocol 6, but for his closeness to the "Family," the coterie of relatives, businessmen, and government officials around former President Yeltsin. It was Yeltsin who elevated Lesin, and it may be because of Yeltsin that he will return whence he came. (Julie A. Corwin)

YOUTHS GATHER FOR FREEBIES ON RED SQUARE... Some 10,000 young people gathered on Red Square to celebrate the one year anniversary of President Putin's inauguration on 7 May under the direction of a youth movement called Moving Together. But comments by the youthful participants suggested that organization of the event -- or at least financing for it -- might have come from more politically seasoned quarters -- closer to Moscow. One student and a member of the movement told RFE/RL's Moscow bureau: "We are a very rich organization. Our heads have enormous funds. Do you think it is cheap to gather 10,000 people from the cities of Russia for a half an hour in the center of Moscow?" Another student reportedly said that she will be given two free movie tickets every week, ten hours of Internet access every month, a monthly pass to a swimming pool, aerobics classes, and free foreign-language instruction, according to "Kommersant-Daily" on 8 May. The student might have been wiser to get the goods up front. A student from Taganrog told "The Moscow Times" that she and her fellow students were promised guided tours of Moscow that never took place. She added that she did not know that the movement was pro-presidential. The students also -- presumably -- were given the red, white, and blue T-shirts that they were wearing, T-shirts emblazoned with the image of gently smiling Putin and phrases such as "Everything is going the right way."

One student from Orel Oblast told AP on 7 May that the presidential administration had financed the event, however, Vasilii Yakimenko, head of Moving Together, denied that his movement is funded by the presidential administration. He said that the movement is financed by a "group of Russian companies" the names of which he declined to disclose. According to Yakimenko, the movement's membership nationwide totals around 40,000. In an interview before the event with "Nezavisimaya gazeta" on 5 May, two political commentators condemned the event, citing the country's past history involving cults of personality. Leonid Smiryagin of the Carnegie Moscow Center concluded that not only the event but "the very mood of Russian society is dangerous." He continued "the public has been seized by servility since the end of 1999." (Julie A. Corwin)

...AS POLITICAL EXTREMIST ALLEGED TO HOLD GREATER APPEAL FOR YOUTH. The recent Red Square gathering is perhaps only the most recent sign that a variety of political groups are courting Russian youth. And despite this generation's apolitical image, there is -- according to some sources -- a minority of young people, who are not only actively interested in politics but are attracted to its more extreme manifestations. For example, more and more young people are reportedly joining radical communist and socialist groups, "Obshchaya gazeta" reported in its issue number 10 of this year. According to the weekly, the largest organization of the young left is the Union of Communist Youth, which has some 38,000 members. Its official status is that of the youth branch of the Communist Party but the Communist hierarchy is reportedly unwilling to give many of the youthful members full-fledged status, because they fear a youth-led coup of the upper ranks.

Sociologist Boris Kagarlitsky explains that many of the young communists, who are well-educated and hold good jobs, have been attracted to the movement because they feel that opportunities have passed them by: "At the end of the 1980s, young people obtained a lot of new opportunities; they could make a career by the age of 25. But now...everything is divided already, all the best jobs are occupied by people who can be called the "[former acting Prime Minister Yegor] Gaidar generation." He continued "what should those who are [born] late do? If young people from the working class become gangsters or drug addicts, having failed at any other business, intellectuals become revolutionaries."

Some Russian youth have also been attracted to extremist groups on the right wing of the political spectrum. According to "Vek" last month (issue no. 17), there are several thousand young "skinheads" in Moscow alone. The monthly also claimed that "opinion polls indicated that of the 4-6 percent of Russian youth who are interested in politics, over half tend to favor fascism." Nationalist movements are also popular in other major Russian cities and "skinheads" have reportedly engaged in persecution of foreign, primarily non-white, students in cities such as Tver and Voronezh (see "RFE/RL Newsline," 26 March 2001).

The extremists' anti-foreigner sentiment resonates at least partially with the recent Putin rally. In an article in "Nezavisimaya gazeta" on 11 May, Leonid Radzikhovskii reported that one slogan bandied about at the gathering was "We are the youth that turns to Russia, with its back to the West." However, Radzikhovskii concludes that the rally was interesting not so much for what it revealed about the beliefs of Russian youth -- which was very little -- but what it suggested about the future direction of Kremlin policy. According to Radzikhovskii, the slogans and speeches at the rally suggested a new shift towards anti-Westernism as opposed to simple anti-Americanism. And since there is "an ideological vacuum in Russia," Radzikhovskii believes that the Moving Together rally may be viewed as one attempt to fill that vacuum with an anti-American, anti-Europe ideology. (Julie A. Corwin)

WHAT'S ON TAP. According to the pro-Kremlin website strana.ru on 7 May, during the Duma's spring session, deputies will examine legislation on the tax on profits, payments on use of the underground natural resources, excise payments, the legislative package aimed "de-bureaucratizing the economy," legislation on banks and banking activity, on the Central Bank, and on prohibiting the legalization of revenues received by illegal means. Deputies will also examine the Land Code, Labor Code, and will complete work on a new version of the Customs Code. Andrei Isaev, deputy chairman of the Federation of Independent Trade Unions, told Ekho Moskvy on 1 May that the Trade Code will be prepared for its first reading at the end of the spring session or at the beginning of the fall session.

Talk of the law on political parties has all but dwindled. That bill was submitted by the presidential administration last January and passed in its first reading (see "RFE/RL Russian Political Weekly," 26 January 2001). But more than 1,500 amendments have been submitted for its second reading and although Kremlin sources reportedly wanted it on the Duma's agenda for April, it did not appear, according to "Nezavisimaya gazeta" on 18 April. That it is again not being mentioned for the remainder of the Duma's spring session raises even more questions about its future. But since the Labor and Customs Codes were supposed to have been passed during the Duma's 2000 fall session, the government and presidential administration may want to ensure that those pieces of legislation pass before the Duma starts up its 2001 fall session. (Julie A. Corwin)

COMINGS & GOINGS OUT: President Putin named on 10 May State Duma deputy (Unity) and former Prime Minister Viktor Chernomyrdin Russia's ambassador to Ukraine. Chernomyrdin will replace Ivan Aboimov.

OUT: Two deputy interior ministers, Lieutenant General Vladimir Kozlov and Colonel General Valerii Fedorov, have been dismissed, according to "Kommersant-Daily" on 7 May. Fedorov was also state secretary of the ministry and a close associate of former Interior Minister Vladimir Rushailo.

IN: Prime Minister Mikhail Kasyanov named Yurii Moskaltsov and Anatolii Makoedov deputy chairmen of the State Fishing Committee, Interfax reported on 8 May, replacing Vladimir Ismailov and Vyacheslav Galagan, who were not giving new government posts. Moskaltsov is the former president of the Vladivostok-based Dalryba, while Makoedov is formerly deputy director of the state enterprise National Fish Resources.

RETAINED: The following were elected members of the board of Unified Energy Systems (EES) on 28 April: presidential administration head Aleksandr Voloshin, Economic Development and Trade Minister German Gref, Deputy Property Relations Minister Sergei Kosarev, Deputy Prime Minister and Finance Minister Aleksei Kudrin, Deputy Energy Minister Viktor Kudryavy, Federal Energy Commission head Georgii Kutovoi, Vologda Oblast head Vyacheslav Pozgalev, Novgorod Oblast Governor Mikhail Prusak, EES head Anatolii Chubais, Anti-Monopoly Minister Ilya Yuzhanov, EES first deputy head Leonid Melamen, EES deputy head Valentin Zavadnikov, AKB National Reserve Bank head Aleksandr Lebedev, and Brunswick Capital Management fund manager David Alexander Herne, according to Interfax on 28 April.

POLITICAL CALENDAR 16 May: Duma will approve new schedule for the remainder of spring session, according to Duma Chairman Gennadii Seleznev.

Second half of May: Proposals to reform the government are due to be submitted to President Putin, according to Prime Minister Kasyanov.

19 May: Democratic Choice of Russia will convene a congress.

20 May: Israeli Foreign Minister Shimon Peres to visit Moscow

26 May: Union of Rightist Forces to hold founding congress for new party in Moscow.

27 May: Election for State Duma seat in a single-mandate district in Irkutsk Oblast will be held. The seat was left vacant when former State Duma deputy Vladimir Tikhonov was elected governor of the oblast.

1 June: State Duma by-elections for single-mandate district in Chukotka Autonomous Okrug

1 June: Date by which President Putin has ordered Prime Minister Kasyanov to submit proposals for the creation of a single organ to regulate the tariffs of natural monopolies, according to ITAR-TASS on 10 May.

Mid-June: New IMF mission slated to arrive in Moscow, according to Interfax on 24 April.

20-22 June: International Financial Action Task Force to hold a new meeting at which the issue of Russian money laundering is likely to be discussed, according to "Izvestiya" on 23 March.

1 July: Audit Chamber to deliver its report on the effectiveness of Russia's expenditures of foreign credits in 2000.

5 July: Duma's spring session will come to a close, under the revised schedule, according to State Duma Chairman Seleznev on 26 April.

20-22 July: G7/G8 summit will convene in Genoa, Italy.

September: The public organization Business Russia, or "Delovaya Rossii," 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.

7 October: State Duma by-elections will be held for the single-mandate districts in Amur Oblast and in Arkhangelsk Oblast. 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.

November: Unification congress for Unity and Fatherland parties.