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By Michael Wines

Putin Allies Seem to Gain in Battle Over Critical Press Empire

The New York Times, January 27, 2001

MOSCOW, Jan. 26 His defenders insist otherwise, and they may yet be right. But there are growing signs that the battle to control Vladimir Gusinsky's Media-Most press empire and by extension, the last nationwide voice critical of President Vladimir V. Putin is near endgame, and that Mr. Putin's allies smell victory.

Media-Most's largest creditor, the state-controlled Gazprom natural- gas monopoly, formally said today that it planned to appoint its own board of directors for the company after a Moscow court decision on Thursday that, Gazprom said, gives it control of Media-Most.

Media-Most lawyers and officials just as adamantly denied that Gazprom has legal control, and said they would fight the takeover in courts in Moscow, London and Gibraltar.

At the same time, government prosecutors once again racheted up a high-profile, if murky, criminal inquiry into Media-Most, summoning the top anchorwoman of the company's NTV television network for questioning today about money the company lent her in 1994.

Prosecutors later said they believed that Media-Most had given perhaps 100 journalists and other employees large sums of foreign currency, an act that was not illegal but that they said needed investigation.

The actions seem to signal a more intense assault against Mr. Gusinsky and Media-Most, which says it has been raided 27 times since police officers clad in ski masks and camouflage and toting semiautomatic rifles raided the headquarters in May.

The anchorwoman, Tatyana Mitkova, said after the session with prosecutors that it was "completely clear to me what this is about," adding, "There is nothing financial about it; it's all political."

Most political experts here agree. "The message from the Kremlin, from the beginning of last year, was `don't mess with politics,' " said Vyacheslav Nikonov, a former national legislator and director of the Politika Foundation, a research group. "And the two guys who didn't get the message are in big trouble."

Mr. Nikonov was referring to Boris A. Berezovsky, a tycoon with interests in autos, airlines, newspapers and television, who tried to organize political opposition to Mr. Putin last year. He is now in self-imposed exile outside Russia.

He was also pointing to Mr. Gusinsky, whose NTV broadcast company, Russia's only independent nationwide television network, has sharply criticized Mr. Putin's conduct of the war in Chechnya and other matters. Mr. Gusinsky is now under house arrest in Spain, fighting extradition to Moscow, to face fraud charges that he says are part of a Kremlin vendetta.

In fact, there is little else so far, anyway to explain why prosecutors have singled out Mr. Gusinsky and his company for such intense scrutiny. The prosecutors' inquiry has meandered from allegations of illegal eavesdropping to questions about Media-Most's stake in a privatized St. Petersburg television station, and on to doubts about its credits with Gazprom and to questions about money given to employees.

Mr. Gusinsky has been jailed twice, and other top aides have been arrested or threatened with arrest. But no one has been tried on any charges, much less convicted.

The financial battle with Gazprom seems fueled by mutual mistrust and broken promises, led by Media- Most's inability to make good on its obligations to the company.

But as is often true in Russian politics, nothing is that simple.

Mr. Gusinsky and his allies cast the fight as a clear issue of press freedom, saying the Kremlin is persecuting Media-Most to shut down NTV, the last national voice of dissent with its policies. Mr. Putin, it is true, has a decidedly non-Western view of press freedom: he has said that the real threat to the press comes not from the state but from the tycoon owners, who merely advance their own political cases.

On the other hand, the Kremlin seems to have little problem with the political slant of Russia's two state- controlled television networks, which have been known to rough up Kremlin opponents but seldom offend the Putin administration.

"To Mr. Putin and his people, there is no such thing as an independent mass media," Igor Malashenko, the first deputy chairman of Media- Most, said in an interview today.

Mr. Malashenko said that he had met more than once with Gazprom's chairman, Alfred Kokh, and that it was clear he was taking direction from the Kremlin's press ministry.

Yet Gazprom has its own financial case. In the 1990's, when Mr. Gusinsky wielded his empire to boost President Boris N. Yeltsin's popularity, he was rewarded with access to credit including Gazprom's guarantees of $473 million in loans by Credit Suisse First Boston.

Media-Most repaid part of that debt, but Russia's 1998 fiscal collapse caused the company's advertising revenues to shrivel. And Mr. Gusinsky's falling out with Mr. Putin over Chechnya ended any prospect that the state would help him out.

Since then, Gazprom has taken part of Media-Most's shares in exchange for debt forgiveness, and clearly has its eye on the rest. In an interview on Thursday on NTV, Mr. Kokh said his company was just trying to get its money back, hoping to sell its holding in Media-Most.

He said he had been personally instructed by Mr. Putin, in a meeting two Sundays ago, to settle the company's financial dispute but to leave Media-Most's journalists and editorial policies out of it.

Gazprom's court victory this week stems from an agreement in November that was intended to end the financial wrangling with Media- Most, but instead seems to have aggravated it. That agreement gave Gazprom 46 percent of the company's stock, and put up 19 percent more as collateral for the debt.

But the two sides now dispute whether Mr. Gusinsky kept the voting rights of those shares, which he needed to control the company. If a court should obstruct the Kremlin, Mr. Malashenko speculated, the government might act to take control of the company, regardless. "But honestly," he said, "I doubt it, because it would be clear it was as Mr. Putin decided. And I do not think he's ready to go that far."

See also:

The original at http://www.nytimes.com/2001/01/27/world/27RUSS.html

NTV Case

Vladimir Gusinsky's case

The New York Times, January 27, 2001

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