PUTIN AND THE OLIGARCHS; OR, SOME CONSEQUENCES OF THE NTV AFFAIR

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“Are You For Putin or Berezovsky?” is the title of an article by Andrei Piontkovsky in “Novaya Gazeta”, discussing whether it is acceptable, in pursuit of one’s goals, to form an alliance with those who have “somewhat different principles and priorities, including ethical principles”.

A simpler way of putting the question, says Piontkovsky, is: can freedom of speech use Berezovsky’s money? Piontkovsky writes: “For some time now, the devil has been running some kind of strange test on the Russia focus group, offering it one choice after another: Lenin or Kornilov, Stalin or Trotsky, Stalin or Hitler, Yeltsin or Zyuganov, Putin or Berezovsky. Each time, we choose the lesser evil, or what we think is the lesser evil. And each time we pay a higher price.” Actually, under such circumstances Russian society has no real choice.

Now that the operation aimed at ensuring Putin’s succession to Yeltsin has been concluded, its main players are engaged in a dispute over world-views. “Putin’s version of the Russian idea means all power to the special services and the oligarchs who are close to them. Berezovsky’s version of the Russian idea means all power to the oligarchs and the special services which protect them… The former says: You should thank our regime, which protects you from the people’s anger with its bayonets, jails, and PR strategies. The latter replies: We should hire ourselves a regime to protect us from the people’s anger with its bayonets, jails, and PR strategies.” For everyone other than the participants, there is very little difference in outcome.

Of course, the key figures think otherwise. Boris Berezovsky has been interviewed by Natalia Golitsyna, a Radio Liberty correspondent, for the “Obshchaya Gazeta” newspaper. He says he is currently seeking a way to continue reforms in Russia.

Berezovsky considers that over the past year, Russia has taken numerous steps away from the path of reform. He believes that the most significant of these has been Putin’s strengthening of the state power hierarchy, which really means “destroying the previous democratic structure of the state in Russia”. The next step, says Berezovsky, is likely to be “the destruction of liberties created over the past decade”, the main ones being freedom of speech and a free press.

But over the past decade Russia has gained “a critical mass of free and independent people”. Still, Berezovsky had some doubts about whether these people were ready to make a decisive statement about their views – for example, to rally in protest. However, it turned out that these doubts were groundless. The NTV affair has shown that these people are determined.

“Putin’s approval rating is said to be 80%, or even 80%,” says Berezovsky. “But I keep trying to figure out whether these 80-90% will rally in the streets or not.” He reaches the sad conclusion that they probably won’t. Then again, this isn’t all that important: “We know that the direction of historical development is determined not by 90% of the population, but one percent, or two percent, or five percent at most.” These are the ideas Berezovsky will discuss in an article he is now working on, about “Russia’s strategic objectives”.

It is worth noting that Berezovsky has already managed to express his opinion of the Kremlin’s policies, repeatedly and unambiguously. For example, “Ekspert” magazine quotes from a Berezovsky interview on the Grani.ru website: “I believe that the Russian regime has abolished all boundaries for its own actions. There are no boundaries, in my view. In fact, the takeover of NTV is another Rubicon. The only boundary they haven’t yet crossed is outright murder. And I believe that very soon they will be doing even that.”

“Ekspert” notes that Berezovsky became involved in the NTV dispute two months ago, declaring that he had started talks, through his financial advisers, with Credit Suisse First Boston – about buying out Media-Most’s $262 million debt. He also offered the NTV network a $50 million loan. However, Vladimir Gusinsky refused this gift from his “sworn friend” (as “Ekspert” puts it), apparently relying on reaching an agreement with Ted Turner.

Nevertheless, once the scandal was in full swing, Berezovsky proposed a new idea – cheaper than settling all of Gusinsky’s debts, but still expensive: merging the TNT channel (the initial intended destination of NTV’s top journalists) with the TV-6 network, of which Berezovsky owns 75%. However, it became clear that TNT could follow in the footsteps of NTV – it could go bankrupt along with the whole of Media-Most. Therefore, Berezovsky’s third proposal – “everyone should go over to TV-6” – was accepted.

Hence, says “Ekspert” magazine, Berezovsky has emerged a clear winner from the NTV affair. Firstly, he has gained a reputation for defending freedom of speech. Moreover, he has increased the value of his company in a cost-effective way (since “salaries for former NTV journalists don’t add up to nearly as much as a merger between companies would have cost”). According to “Ekspert”, even the former executives of TV-6, pushed aside by the arrival of Yevgeny Kiselev’s team from NTV, consider that the addition of so many highly skilled journalists represents a real expansion of the resources of TV-6.

“Ekspert” considers that it’s still too early to predict the future of TV-6. “Berezovsky could choose to mount an all-out attack on the Russian government, and primarily President Putin, down to the last journalist.” (True, Berezovsky hasn’t done much of this in the past, “allowing Gusinsky to take the lead”.) Or he could choose to “separate his abovementioned opinions as an individual and a citizen from his position as the owner of a Russian television channel”, and confine himself to “objective criticism”.

This is especially relevant, given that the regime’s actions against Berezovsky’s present ally have already shown it is capable of being consistent in its intentions – new charges have been issued against Vladimir Gusinsky, money-laundering this time, and he is once again wanted by Interpol.

Why is the regime focusing on Gusinsky? Vitaly Portnikov, a Radio Liberty correspondent, takes up this question in an article for the “Vedomosti” newspaper: “When the Gusinsky case was just beginning, there was a lot of talk about keeping all the oligarchs equidistant from government. Now there’s no mention of any other oligarchs – but Gusinsky is being made more and more equidistant…” He’s already lost the NTV network; the “Segodnya” newspaper has been shut down; and there has been a total change of personnel at “Itogi” magazine. Someone else is now president of the Russian Jewish Congress. “What more can Gusinsky do against the Kremlin? What media outlets or levers of influence remain in his hands? Although I’m no great admirer of Gusinsky’s talents, I still can’t make any sense of this absurd hunt,” says Portnikov.

Meanwhile, yet another “devil incarnate” – Boris Berezovsky – is, unlike the ever-harassed Gusinsky, completely free to take action: change the board of directors at TV-6, or bring in Kiselev’s team from NTV (Yasen Nikolaevich Zasursky, dean of journalism at Moscow State University, is quoted in “Obshchaya Gazeta” as saying that Berezovsky treated the existing team at TV-6 “like a slaveowner”).

Berezovsky uses every opportunity to stress that he has no intention of relinquishing his media holdings. And the General Prosecutor’s Office even alleges that Berezovsky was behind Nikolai Glushkov’s escape attempt! Despite all this, Portnikov notes that Berezovsky is “as free as Pavel Borodin” – he has not been charged with anything, he is not being harassed, and he is not wanted by Interpol.

Portnikov suggests two possible explanations for this. On the one hand, the regime – “not Putin, but other influential people” – might consider that it’s still possible to reach an agreement with the former oligarch. On the other hand, the regime “almost instinctively senses” that it can’t handle Berezovsky.

Therefore, since the regime simply doesn’t have any other targets who are as widely loathed as Berezovsky and Gusinsky, the role of “leading embezzler, money-launderer, corrupt person and Lucifer” will continue to be assigned to Gusinsky. And this automatically guarantees that in the West he will become a symbol of defending free speech.

“The remnants of NTV’s former glory are in the hands of a person who specializes in stealing everything that isn’t nailed down and making a profit from his collection,” says “Novoe Vremya” magazine.

Berezovsky has never concealed that he sees the media as an important political tool. So Yevgeny Kiselev’s team from NTV has come to the right place. “Of course, it is slightly embarrassing that some of the top NTV journalists used to take delight in describing how Berezovsky stole from Aeroflot.” But let bygones be bygones. One thing is clear: “Berezovsky has managed to gain something from the ashes of the NTV scandal.” The value of his gains is another matter.

According to “Novoe Vremya”, “LUKoil’s long-standing wish to purchase the rest of Berezovsky’s media empire has become irresistible:. Berezovsky himself insists that he has no intention of selling any of his media assets. Could he be trying to get the best price?

Meanwhile, the regime has some “special arguments” to “sway its sworn friend toward a mutually favorable deal”. Two of Berezovsky’s allies – Nikolai Glushkov and Sergei Dorenko – were involved in some unpleasant incidents just as the NTV scandal was at its height, with NTV journalists going over to TV-6.

Some less radical combat techniques are also being used. The Duma recently passed a bill in the first reading which will amend media laws to bar foreigners from owning over 50% of shares in any Russian media company.

Analysts consulted by the “Vedomosti” newspaper said this intimidation attempt could be aimed at Ted Turner and his intention to buy a stake in NTV. “Ten years ago, Turner was also scared off by such a move,” says Andrei Richter, head of the Law and Media Center. “When Turner wanted to increase his stake in TV-6, he was shown three bills, two of which restricted foreign ownership in television and radio, while the third banned foreign ownership altogether in electronic media.” Turner abandoned his intentions at that time.

“Vedomosti” considers that there could be some truth in this theory; the passage of the bill was obviously well-organized, with all Duma factions apart from Yabloko and the Union of Right Forces voting in favor. Representatives of the Kremlin and the Cabinet declined to comment on the innovations, despite being invited to address the Duma by Deputy Speaker Irina Khakamada. The Presidential Administration – which, according to “Vedomosti”, keeps a close watch on legislative activity and conducts legal analysis of it – declared in this case that it hadn’t had time to prepare a position on the issue. The opinion of the Duma majority was expressed by Pavel Kovalenko of the Unity faction: “Owning a 49.9% stake is quite enough to do business. But if the foreigners are coming in to push their own line, they must be prevented from doing so.”

Mikhail Fedotov, secretary of the Russian Union of Journalists, considers that this amendment “is like a locked gate in the middle of an open field”, which can easily be bypassed.

Indeed, no foriegn company intends to curtail its business activity, having invested substantial resources in it. According to “Vedomosti”, there are over 50 regional media outlets alone with foreign shareholders. If this bill becomes law, “they will all have to amend their charters, and this will distract them from important business, at the very least,” says Roman Petrenko, CEO of the STS television channel, of which 75% belongs to American investors.

“Vedomosti” considers that there’s yet another target of this amendment, and everyone knows who it is: Vladimir Gusinsky again. The bill says that people with dual citizenship cannot be founders of media companies in Russia. Obviously, apart from Gusinsky with his Israeli passport, this is also aimed at citizens of the United States and other countries. In reality, only citizens of Uzbekistan and Tadjikistan will be hurt by the new law, since Russia has an agreement on dual citizenship with these countries. Dual citizenship with other countries simply isn’t recognized under Russian law. “Gusinsky and Berezovsky can be the founders of media companies as long as they don’t become citizens of Uzbekistan or Tadjikistan. These amendments to media laws are utter nonsense,” says Boris Nadezhdin, Duma deputy and lawyer.

Berezovsky and Gusinsky, the two oligarchs under fire, are considered capable of anything – even the most extreme actions. For example, the media and the public were duly impressed by Berezovsky’s famous open letter containing the promise that “you will choose the next president yourselves”. However, this hasn’t prevented people from harboring the usual suspicions about the cunning duo.

The “Rossiia” newspaper recently reported that “the apparent surrender of Gusinsky and Berezovsky, who have lost all business and media influence in Russia, is just an illusion. What they’re actually doing is reconnaissance in preparation for making a comeback to power in the Kremlin.”

According to “Rossiia”, a frantic search is underway for a suitable candidate for the next presidential election. Moreover, a preliminary choice has already been made: Vladimir Shamanov, now governor of the Ulianov region.

Despite failing with Alexander Lebed, Berezovsky has not given up the plan to raise another brave general to the top in federal politics – this is an image which should be understandable and acceptable for millions of Russian voters. It is said that Shamanov was picked out as far back as last autumn; he is popular not only among the oligarchs, but also among the so-called “nationalist patriots”. However, real work on Shamanov’s image began with his attendance at the trial of Colonel Budanov, according to “Rossiia”.

“Is it just a coincidence that Shamanov was getting so much media coverage across Russia during the NTV crisis? This is a purely rhetorical question, and impossible to prove one way or the other. But the facts remain: the media owned by Berezovsky and Gusinsky, NTV most of all, were promoting Shamanov.”

“Rossiia” says that Shamanov’s own consent to such promotion was not sought. And “Rossiia” does not maintain that Shamanov is the final choice of the oligarchs; it only notes that “irrespective of any particular details, the oligarchs are not abandoning their efforts to influence Russian politics”.

The “Vek” weekly also notes that Governor Shamanov of the Ulianov region has been getting an unusual amount of media coverage recently.

“It is said that Shamanov has changed. He has acquired a taste for power… It is said that even such well-known Russian patriots as Gusinsky and Berezovsky have plans for Shamanov. It is said that even Alekperov and Voloshin wouldn’t mind playing the ‘charismatic general’ card.” Of course, “Vek” immediately qualifies this by saying that it’s all very reminiscent of an arranged marriage, without the knowledge or consent of those involved.

Besides, Vladimir Shamanov himself loses no opportunity to declare his support for Vladimir Putin: “I support him totally. Not by words alone, but through real action in the Ulianov region. There are rumors that I’m thinking of the presidency. No, I have no such plans. I can say with confidence that in four years’ time I will run for re-election as governor of the Ulianov region.”

The “Vek” article is entitled “Playing With Shamanov”. It must be admitted that its references not only to Berezovsky and Gusinsky, but also to Alexander Voloshin, head of the Presidential Administration, and Vagit Alekperov, with LUKoil behind him, are very significant.

Alekperov heads the list of the most influential people in Russian business, as published recently by “Kommersant-Dengi” magazine.

According to the magazine’s analysts, Alekperov controls $7.5 billion in capital. Next on the list is Vladimir Bogdanov ($5.75 billion), Rem Vyakhirev ($5.556 billion), Viktor Chernomyrdin ($5.556 billion), and Vladimir Potanin ($4.886 billion). The final member of the top ten is Roman Abramovich, controlling $1.884 billion.

At present, the financial decision-makers on this list – with a few exceptions like Roman Abramovich and Alexander Khloponin – don’t have any personal political ambitions, says “Kommersant-Dengi”. They prefer to invest in “charismatic figures” and political movements. “But already we can make a prediction: over the next ten to fifteen years, many of those on the list will aspire to high government office. Sooner or later, the power of big money will be transformed into power as such.”

The “Vremya MN” newspaper reports the results of a poll done by the Public Opinion Foundation, which indicates that President Putin’s approval rating fell from 45-46% to 42% in April, while his trust rating fell to 37%. The drop is even more dramatic in Moscow: only a third of Muscovite respondents would be prepared to vote for Putin, and only 25% trust him.

The Public Opinion Foundation considers that the main reasons for the drop are the NTV scandal and the lack of any noticeable progress in Chechnya. Thus, a strong PR campaign would suffice to lift the president’s rating once again, according to the Public Opinion Foundation’s analysts.

However, Dmitrii Shusharin, author of the “Vremya MN” article, disagrees. Shusharin points out that April events included the president’s annual address to the Federal Assembly, which set out what are considered to be the government’s long-term economic and social policies. Besides, the two pro-government parties, Unity and Fatherland, announced a merger – as a result of which a strong pro-government bloc formed in the Duma.

If the president’s rating is still dropping against the background of all these events, we should be talking of long-term erroneous strategies rather than one-off setbacks for the Kremlin. Of course, says Shusharin, the president’s rating will probably be pulled up again this time. “But what next – will this continue until the next election, at which Putin can’t as yet be guaranteed a victory? Or will the regime find new allies, a new way of communicating with the nation? Most importantly, will it gain a clear understanding of its goals and objectives – its mission, so to speak?” “Vremya MN” has no doubts that we will soon get an answer to these questions. There’s still time.

NOTE: The next issue of “Political Forecasts” will be on May 15. Until then!

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