The press is free, if you happen to own the presses.

Shutdown: Government officials silence a television broadcast

By Kathy Lally

MOSCOW -- It was the middle of another tumultuous day. One Russian region threatened to secede, three secret police officers gave a press conference to declare they were not terrorists and killers, a pensioner set himself on fire on Red Square and the first stage of a new international space station blasted off into orbit.

And the nation's main television news program fell silent.

Court officers serving a debt collection order yesterday had impounded the cars and trucks belonging to ORT, the main TV channel and voice of the establishment, and its cameramen were unable to cover the news. The noontime anchor reported the seizure, read several wire service reports and ended the program after three minutes. The screen went still, except for a silent message. "You are watching ORT news," a notice informed viewers for the last 12 minutes of the newscast.

This was startling, even here, where each day reveals a new and unexpected turn in the national drama. Players and audience alike immediately began trying to figure out the plot. And it had many twists.

For while court deputies were ranging through ORT, crouching under the director's desk to count his telephones as he talked on one of them, fire officials were delivering some bad news to radio station Ekho Moskvy, informing the feisty station it could be shut down for safety violations. "It can't be anything but political," said Sergei Dorenko, ORT's news director and evening anchor, who has a rich, mellifluous voice, impassive expression, and every hair in place.

"At first I thought it was just one of the usual problems, only more so," said Aleksei Venediktov, Ekho Moskvy's chief editor, whose emotions flit across his face, and every hair stands out of place. "But compare it to what's happening to ORT, and it looks like an attempt to settle accounts with the mass media."

The Communists have been the most outspoken against the press. Just over a week ago, Gennady Zyuganov, the Communist leader, and other political sympathizers asked the government to set up a public committee to establish controls over Russia's television stations. But their unhappiness is shared by politicians across the spectrum yearning for a more malleable press.

This week, court deputies arrived at ORT with orders to draw up an inventory of all of the station's equipment, in case it had to be sold to pay its debts. A $4 million judgment against ORT had been won by the Television Technical Center, which transmits the station's broadcasts. What annoys ORT, Dorenko said in an interview, is that the government owns 51 percent of the station -- and it also controls the Television Technical Center. The other 49 percent is controlled by Boris A. Berezovsky, one of Russia's powerful financiers, who has numerous enemies. In effect, Dorenko said, the government is suing itself for not paying its debts to itself.

"I think we will soon learn about the political reasons," he said. "In Russia, when somebody hurts you, they later come to your rescue. Usually, when it comes time to give you help, you have to pay."

Its opponents, he suggested, want to drive ORT into bankruptcy. Rescue would come in the form of new investors, who would control the station.

The Communists have already offered to find investors, he said. Yuri Luzhkov, the mayor of Moscow, who already controls a small television station in the city and wants to run for president, might also like to help, Dorenko said. Venediktov speculates that the warnings from the fire inspector represent a long-term threat to the radio station, and the beginning of a campaign to find out how far the authorities can go in controlling the media. "I think the Russian authorities do not like the press in general," he said. "The whole political elite is getting ready for elections and looking for levers of power they can control."

His station is still admired and cherished for broadcasting uncontrolled, from a secret location, throughout the failed coup of August 1991. "We're looking for other places now," he said. "Perhaps we can satisfy the fire inspectors. But there's no guarantee we won't be visited by the sanitary inspectors, and that they won't find cockroaches and seal the building up."

ORT was broadcasting normally when its 9 p.m. newscast came on the air yesterday. Dorenko reported that LogoVaz (the auto company controlled by Berezovsky) had offered the station cars. Viewers had also called in, offering to drive reporters and cameramen wherever they wanted to go, for free. Duma deputies raged at the government for embarrassing the nation. The court returned the car keys to ORT.

And Russians heard the news.

A despondent 66-year-old man had doused himself with gasoline and set himself afire at Red Square, perhaps emulating two Kurdish protesters who set themselves on fire near Red Square earlier this week.

The Duma approved a statement censuring the Russian republic of Kalmykia for threatening to leave the federation because it isn't getting money from Moscow.

And Dorenko broadcast another chapter of the KGB Files, a special segment of his news program. The drama began this week when five members of the FSB -- the current name of the domestic KGB -- called a press conference to accuse the security police of taking part in kidnapping, murder and extortion. One of them also said he had been ordered to kill Berezovsky last December. Yesterday, another group of FSB officers gave a press conference to deny all the accusations and insist that the FSB had never broken the law.

"In the 20 years of my service in the FSB, I simply cannot imagine an unlawful order being given," said Col. Shankor Ishankulov. A reporter suggested that human rights organizations had documented numerous abuses against Soviet citizens 15 and 20 years ago. "I will have to repeat once again that this is nonsense," Ishankulov said. "This is something that cannot be." Dorenko promised another segment in the KGB saga on Monday -- if the station is still on the air.

November 27, 1998, Moscow Times

Media Watch: No Sobs as ORT Bellyflops

By Leonid Bershidsky

I felt no symathy for the ORT televipsion station when bailiffs recently descended on its offices, inventoried the furniture in the office of General Director lgor Shabdurasuloy and took away the keys to company cars and vans.

Idid not even feel a sense of solidarity with my colleagues at the television station, who, deprived of car keys, could not go out to film news events that evening. That's what comes from working for an anomalous company like ORT. Television officials may whine all they want about advertising revenues dropping 80 percent since the financial crisis broke out in August. I say they had it coining. The current television bosses may not want to remember how it all started, but in that case they should be reminded of a few things.

Above all, I mean the murder on March I, I995 of Viadislay Listyev who had been appointed ORT chief and who actually conceived the original ORT plan. Listyev envisioned a company that would he mostly governmentcontrolled but run like an efficient private corporation. It would therefore have enough money to produce and buy quality programs and to pay dividends to its shareholders, both stateowned and private. The private shareholders would be banks, energy firms and trading companies with diverse political interests. The diversity would guarantee the channei's editorial independence.

Like Gatina Starovoitova, Listyev was gunned down just a few steps from his apartment door in a clear contract murder case. The murderers have not been caught. After the murder, everything went according to the original plan, but only on paper. In those days, each show would sell airtime to advertisers independently. Listyey aimed to end that chaos and set up a centralized ad sales department within ORT. While he was setting up the department, ORT was to have no ads at all for three months.

With Listyev dead, it would not have been smart for his successors to cancel the ad rnoratorium. They even let it go on for four months before announcing the creation of ORT Reklama agency purportedly the ad sales department Listyev had envisioned. The agency was headed by Sergei Lisovsky, owner and chief executive of the Premier SV advertising agency.

Officially, Lisovsky quit Premier to work for ORT, In fact, Premier quickly obtained a monopoly on selling ORT Reklama's airtime to advertising agencies. Somewhere along the line a number of shareholders sold out to companies controlled by financler-turned-politician Boris Berezovsky, and Listyevs ideas of diversity and political independence were forgotten like a bad dream.

Now, ORT Reklama is also gone and forgotten. Lisovsky is chief of Premier SV. And Premier SV still has a monopoly right to sell ads on ORT, except the deal has gone bad for both sides. ORT sells the airtime to ad agencies for a fixed price that is too high in post-crisis Moscow. The price, of course, is too high because Premier SV and the other big television advertising monopoly, Video Intemational, drove it up in recent years as monopolies tend to do.

Premier SV and VI kept Western media sales houses out of Russia because they had good connections with the management of television stations. The television station managers were too lazy - and their personal friendships with the two airtime sellers were too close - to run their own sales departments. Now ORT is in the hole because it has no ad revenues. Premier SV reportedly owes it $50 rnillion, but unless the crisis ends abruptly and people are again willing to pay inflated prices for airtime, that debt cannot be repaid in cash.

Who is to blame? I am afraid the government with its treasury bill pyramid is not, and neither are the hapless advertisers. ORT has always been abominably managed. It was set up in a way much criticized as corrupt by the State Duma and state auditors. And Premier SY monopolized ORT's ad sales in a deal that was badly structured and hurt both companies at the first signs of financial trouble in Russia.

And that is why I feel no sympathy for ORT. Until recently, it was a rich channel with rich managers and stars who drove expensive cars and gave interviews to fashion magazines. It was also a soapbox for Berezovsky, who would never have been able to push his unappealing political agenda as far if he didnl control his own television station.

Now ORT and those who run it are quickly learning that wealth and political clout are transitory when they are unearned. Tough luck.

Sovetskaya Rossiya 8 December 1998

"The Distorting Mirror of the Oligarchy" Have the "Gods" Perished?

Article by Vasiliy Safronchuk under the rubric "Overview"

In recent weeks, especially after the collapse of the ruble and exacerbation of the financial crisis, certain "democratic" publications have begun to lament the fate of Russia's leading oligarchs. Issue No 9 of the monthly journal Sovershenno Sekretno published by the Borovik clan of abusers of our Soviet past contains an article entitled "The Death of the Gods."

It is a kind of obituary of the Russian oligarchs Potanin, Berezovskiy, Gusinskiy, Khodorkovskiy, Smolenskiy, and Aven. They are portrayed as innocent victims of the Russian and world financial crises. I am not offended by the Boroviks for taking the idea and diagram of the oligarchy from my essays in Sovetskaya Rossiya published in 1996-1998. The weekly Argumenty i Fakty does the same thing as the Boroviks and in issues 46 and 47 publishes Olga Kryshtanovskaya's essay "The Death of the Oligarchy." "The oligarchs, who only yesterday were all-powerful, now seem to have vanished in Russia's social space. Where are they? What is wrong with them?" she asks. The author says: "The systemic crisis in Russia means the death of the financial oligarchy. Their banks have been ruined. The mass information media are unprofitable, and oil is getting cheaper on the world market.

All the foundations of economic prosperity have been undermined.

To paraphrase Mark Twain's well-known saying, one can say that the rumors of the death of the Russian oligarchy are clearly exaggerated. Yes, to some degree their positions have been weakened. The oligarchy's banks—ONEKSIMbank (Potanin), MOST-bank (Gusinskiy), Menatep (Khodorkovskiy), and SBS-Agro (Smolenskiy)—proved to be insolvent.

TASS will alwys be there...

But Gerashchenko rushed to help them, and after regrouping they held on. During the rescue operation, the oligarchy's banks sent some of their depositors off to the state's Sberbank (SB), and now they will get their deposits back through the Central Bank, which is the SB's main shareholder.

Meanwhile, these banks, as we know, were active players on the GKO [treasury bill] and OFZ [federal loan bond] market and skimmed off tens of billions of dollars on operations involving them; the bulk of that money has settled in the oligarchs' anonymous accounts abroad. The oligarchs' banks were the ones that exhausted the Central Bank's hard currency reserves this past summer and caused the ruble to collapse. During the recent negotiations between deputy minister of finance M. Kasyanov and a delegation of creditor banks headed by Deutsche Bank, the latter announced that large Russian banks could easily have settled with them by using their foreign accounts. But the Potanins, Gusinskiys, Khodorkovskiys, and their ilk prefer that the Russian state settles accounts for them.

Yes, while stock prices were crashing on Russian exchanges, the quoted price of large oil extracting and mining and metallurgy companies controlled by the oligarchy fell several-fold. But as we have repeatedly noted, a drop in the paper value, that is to say the fictitious value, of these companies certainly does not mean that their real value dropped. It is naive to think that Gazprom, Norilsk Nickel, Sidanko, Sibneft, LUKoil, the Tyumen Oil Company, Svyazyinvest, and other giants of Russian industry all together are worth $8-10 billion today. But yet, that is the amount at which the exchange now assesses them! The Oligarchs and the Mass Information Media

But the place where the oligarchy's positions did not waver one iota was on the information market.

True, even here there were difficulties: paper, other processed and raw materials, and printing equipment got more expensive, income from advertising dropped, and so forth. The oligarchs' control over the electronic and printed mass information media, however, was not only preserved but even increased. Let us take television. The ORT [Public Russian Television] channel is controlled by Berezovskiy's co-comrades, just as it used to be. Forty-six percent of ORT stock belongs to his LogoVAZ and ORT-Consortium of Banks, which includes Alfa-bank, Menatep, United Bank, SBS-Agro, and Capital Savings Bank. As practice shows, that is certainly enough for control, since the state, which has a 51 percent stake, acts the part of "Sleeping Beauty." The point is that, according to the ORT charter, to adopt important decisions they must have a two-thirds majority and even a three-quarters majority of votes, and Berezovskiy together with the consortium can block any decision they do not like and impose the one they need. Since the oligarchy's banks have been experiencing financial difficulties recently, ORT has also found itself bankrupt.

The NTV [National Television] channel continues to be firmly in Gusinskiy's hands, although he in fact surrendered 30 percent of the channel's stock to Vyakhirev's Gazprom this year. He also owns the radio station Echo of Moscow. Despite the fact that Russia is sitting in a deep hole of hard currency debt, Gusinskiy "found" $150 million to launch his Bonum-1 communications satellite with an American Delta-2 rocket from the space port in Florida. The satellite was built by the American Hughes Space and Communications Company and will provide 30 channels for NTV-Plus.

Gusinskiy proudly disclosed that he had "broken" the state monopoly on satellite broadcasting. He also claims that he did not borrow any money from anybody to do so. But he is deceiving the people. The satellite was launched with a hard currency loan of $132 million borrowed from the American Export-Import Bank and Vneshekonombank. The loan was received for 10 years at a high interest rate. Meanwhile, the Russian Space Agency is expiring from lack of orders. The Russian Space Agency management has a right to file suit against Gusinskiy for having American companies manufacture and launch the satellite.

The third television channel, TV-Tsentr, is part of the Sistema financial-industrial group that belongs to Moscow mayor Yu. Luzhkov. V. Yevtushenkov, the chairman of the Sistema board of directors, is the mayor's advisor and a member of the Moscow government. He also heads the board of directors of TV-Tsentr. Novaya Gazeta, which on 12 October published a detailed essay on Sistema, disclosed that Yevtushenkov and Luzhkov are related by marriage--they are married to sisters.

Incidentally, the disagreements between Luzhkov and Chubays over privatization, which are being fanned by the mayor himself, are more tactical in nature. The Chubays voucher program was simply an obstacle on the path to converting real estate and Moscow enterprises into joint stock companies and selling them off Luzhkov-style. The newspapers reported that Luzhkov's Sistema intended to order a satellite from the American Lockheed Company for broadcasting on the TV-Tsentr channel throughout Russia. Berezovskiy's LogoVAZ and Alekperov's LUKoil are the largest shareholders of TV-6 channel. The RTR [Russian Television and Radio Company] television channel is formally a government channel. But in fact it is the channel of the president and his administration.

Things are no better with the printed mass information media either.

The controlling block of "black" Izvestiya belongs to that same Alekperov; while 40 percent of Komsomolskaya Pravda belongs to ONEKSIMbank (Potanin) and Gazprom (Vyakhirev); Gusinskiy owns the newspaper Segodnya; the controlling block of stock of Nezavisimaya Gazeta is in Berezovskiy's hands; SBS-Agro controls Kommersant Daily; Vechernyaya Moskva is part of the Moscow bank group, which in turn is part of the Luzhkov system; 70 percent of Literaturnaya Gazeta's stock is in the hands of the Menatep bank, and so forth. Berezovskiy is the largest shareholder in the weekly Ogonek, Gusinskiy owns the weeklies Sem Dney and Itogi (the latter in shares with the Washington Post and Newsweek), and so on. This list of the oligarchy's printed publications could go on forever. Must the One Who Pays the Piper Name the Tune?

But that is already sufficient to picture the oligarchy's degree of influence on the mass information media. Its domination in the electronic mass information media, on radio and television, is especially pernicious. The Kiselevs and Dorenkis and others of their ilk have really screamed about the State Duma's attempts to establish public control over television broadcasting.

They are howling about the assault on "freedom of the press," "introduction of censorship," "suppression of criticism," and so on and so forth. But there is not one country in the world that does not have public control over television broadcasting. In the United States, for example, at the very dawn of television, a system of strict control by the Congress and the government was developed. Beginning in the 1950s, U.S. Senate committees have conducted regular hearings on limiting monopoly trends in television.

The leaders of the main companies, CBS, NBC, and ABC, are invited to them and subjected to the toughest questioning. The American commission on limiting monopolies is involved in this too. Back in the 1950s, it stopped the attempts of television companies to monopolize the rights to film production. In the late 1950s, the U.S. Federal Trade Commission and the Department of Communications took a number of steps to limit unscrupulous advertising and programs promoting crime, violence, sex, and so forth. In April 1974, on the recommendation of the Senate Communications Committee, the main U.S. TV channels took off several programs that promoted violence and sex and replaced them with so-called "family programs." Every year the U.S. Congress allocates tens of millions of dollars in the federal budget to finance educational programs. This money is distributed among the States and educational institutions for free access to the air.

In England control over commercial television is charged to the Administration for Affairs of Independent Television (AIT), which was created back in 1954. A parliamentary act charges AIT with the duty of "providing, in addition to the state BBC, television services of equally high quality in terms of both the technical aspect of programs and their content, and watching to make sure that programs do not include anything that offends good taste or the demands of morality or even could serve as inducement or incitement to crime." In the early 1960s, there was a special commission on affairs of private television operating in England.

Its report relentlessly criticized commercial television for vulgarity and baseness and recommended, among other steps, that the work of compiling programs be transferred to AIT. The 1964 law on television established a special tax on television advertising. Do We Need the Opinions of the Kiselevs, Svanidzes, and Others Like Them?

The behavior of our announcers and moderators is altogether disgraceful. "Earning" tens of thousands of dollars a month, they allow themselves to shamelessly impose views that suit the oligarchy on millions of television viewers and essentially "zombify" the citizens. But the duty of announcers is just to lay out the facts in a well-modulated voice and allow viewers to evaluate them. We certainly do not need their illiterate comments. In the same way, moderators are only supposed to bring members of the government, politicians, and other prominent public figures and experts onto the air, organize debates among them, and give television viewers a chance to decide with whom they agree or do not agree. There is good reason that a television moderator in the West is called an anchor man.

When I was working at the USSR representative office at the United Nations during the Cold War years, I was sometimes, especially in the period when relations between the Soviet Union and the United States had deteriorated, invited to ABC and other channels to argue with American Sovietologists. Even when the discussion became heated, the moderators demonstrated the utmost tact to ensure that the disputes stayed within the limits of propriety and themselves allowed no hostile comments.

But our Kiselevs and Svanidzes do everything the opposite way: hard-line anticommunists and abusers of the Soviet past are invited onto the air and allowed to throw mud at the State Duma and the people's patriotic opposition for hours; they fawn and cringe before the powers that be. But when the leaders of the opposition are invited, they are not allowed to open their mouths without a sarcastic retort, they are constantly interrupted, and crude and tactless behavior is permitted. The Kiselevs and Svanidzes outwardly try to copy the elements of American television: they puff out their cheeks gravely, pause meaningfully, and so forth. But the distance between the Americans and them is like the distance from here to China.

Helsinki's Helsingin Sanomat 14 December 1998

"Ruled by Media. Russia's Media Promoting Discordant Owners' Interests"

Article by Kalle Koponen:

When Sergey Dorenko, news anchor of Channel One, ORT, of Russian television, was removed from his job last week, the assumption in the media was that the political influence of billionaire Boris Berezovskiy was decreasing. Dorenko took over the job in early September, and it was assumed at that time that Berezovskiy was behind the appointment, together with Valentin Yumashev, secretary general of the Kremlin. Yumashev was fired by Boris Yeltsin last Monday.

Journalists are thrown around in Russia depending on the politicaltrends. Russia's media today are, to a large extent, private enterprises and formally separate from the government. However, the country's media have exceptionally strong ties to the squabbling among Russia's political elite.

According to experts, the country actually has no newspapers operating as western-style businesses. They are primarily mouthpieces of the political and economic interests of different industrial bank conglomerates. They are mainly economically unprofitable. Berezovskiy alone is presumed to control with direct ownership, with funding and, among other things, by guaranteeing loans, besides ORT, several newspapers, such as the prestigious Nezavisimaya, "Independent."

"Newspapers are not businesses. In Russia the press has been purely a (political) instrument. It is not possible to understand what is going on based on newspapers," says Yassen Zassurski, deacon of the Journalistic Faculty of Moscow University.Recession Put End to Advertising Income While the economic crisis in August put Russia's banks on their knees, also the media that they own have now encountered unpredictable difficulties. According to some estimates, advertising income has collapsed as much as 70 percent since August.

"Newspapers have started to cut editors' salaries and their numbers. The same has happened in television," notes Zassurski. Russkii Telegraf, which was established by Oneximbank as its high-quality newspaper, had to close after one year, and it has been combined with the formerly famous Izvestia, owned by the same group. Today there are several competing versions of Pravda, the crown of the Soviet Union, but hardly any of them are read.Television channels are resorting to reruns and cheap entertainment.

At worst, newspapers have started to sell political advertising, which is masked as ordinary articles. "These articles are generally the prerequisite for the existence of the papers. Many of them publish articles that have already been ordered and come through the advertising departments. They do not have any notation that they are advertisements," reports Ruben Makarov, who observes the press and journalists' legal protection in the Glasnost Foundation."Often even a specialist cannot tell these advertisements from articles."Andrey Uglanov, Deputy Editor-in-Chief of the newspaper Argumenty i Fakty, defends the papers.

"According to law, we can sell one third of the space on a page to advertisements, and that is what we do. We do not differentiate between commercial and political advertising," says Uglanov.Disputes Within Papers Unrestricted freedom of speech after the dissolution of the Soviet Union made Russia's press wild. Later in this decade bankers and industrial groups competed in buying prestigious newspapers to be their own flagships and mouthpieces. The Russian moralistic tradition in journalism suited well to these tycoons, who are called oligarchs and who competed in insulting each other through their papers.

"American journalism emphasizes facts. Investigative journalists are trying to explain in detail where and when Clinton met Lewinski and to prove with facts that the president broke the law. Our journalism is noisier, it uses stronger words. The writers have great moral passions. However, these lose their significance when the papers become political instruments of certain interest groups," notes Zassurski.

In Russia, writers are unrestrained in offering their own opinions in news articles in newspapers and on television. Even television news anchors sometimes blatantly insult their political opponents, most often the Communists. The Communists have responded with censure requirements and, among other things, accusations of a conspiracy by Jews in the world of media.Whom to Support for President?

However, Russian elite papers are in a political crisis. It is considered certain that Boris Yeltsin will not continue long as the country's president. But it is completely unclear who will succeedYeltsin. "At the moment the press does not know whom to support, from which direction they could they expect economic benefit in return," notes Zassurski. In the presidential election of 1996, new industrial magnates decided to force through Yeltsin's re-election. Newspapers and television channels did what they were told.

Later on, the magnates started fighting among themselves while grabbing Russia's government property, which was being privatized, and there is no obvious alternative for Yeltsin.

"There will not be a free press in this country for a long time. We have had a simulation of that. The media are not in such a state that they could participate or even want to participate in developing a civil society," Ruben Makarov notes.

Christian Science Monitor December 14, 1998

MENACE TO RUSSIAN MEDIA Staying independent in tough times

Peter Ford, Staff writer of The Christian Science Monitor

MOSCOW - Battered financially by a continuing economic crisis and under political siege by Communists eager to reassert their control, Russia's media are facing some of their darkest days since the fall of the Soviet Union.

Across the board, the future is deeply uncertain for national daily newspapers owned by suddenly less wealthy tycoons; for small regional papers whose advertising revenues have collapsed; and for TV stations facing pressure to accept political oversight boards.

"It is not clear what is going to happen, or how, but I am sure that nothing good is in store for us," says Masha Lipman, deputy editor of the weekly Itogi magazine, published in conjunction with the US magazine Newsweek.

The crisis is "creating conditions that threaten the very existence of a non- state press in Russia over the long term," warns a recent report from the National Press Institute, a Moscow-based group fostering the growth of the independent press.

Meanwhile, with the approach of high-stakes elections next year to the Duma, or lower house of parliament, there are few hopes that newspapers or TV stations will soon be able to break out of their traditional role as mouthpieces for whichever politician or businessman is paying them.

The issue of press freedom has come to a head with a declaration of war by the Communist Party and its allies, who control the Duma, against a group of prominent anti-Communist journalists at independent TV channels.

In a throwback to Soviet days, Communist Duma Deputy Alexander Kuvayev threatened in a speech last month to set up a "public committee" over their "active and deliberate support for the [previous] regime and its criminal activities."

Communist leader Gennady Zyuganov then wrote to Prime Minister Yevgeny Primakov, demanding that "monitoring commissions" be established at TV stations to oversee news coverage because "their leaders and owners are extremely tendentious and absolutely hostile to the new government." Proponents of such committees say they are not opposed to freedom of speech, but want it "to be truthful, to reflect the mood of the masses," in Mr. Kuvayev's words. TV station chiefs, however, fear the committees would merely be censorship boards if Communists push through a plan to staff them according to each party's strength in the Duma.

The Communist Party has been acting with renewed confidence since President Boris Yeltsin last September named Mr. Primakov, a former Soviet apparatchik, to lead a new government in the wake of a major banking crisis. Communist leaders in the Duma are reported to be demanding the monitoring committees in return for their vital support for Primakov's tough budget - up for debate this month.

At the same time, the Communists and their allies recently enacted legislation to end customs privileges that the press has hitherto enjoyed. This will especially hit liberal newsweeklies such as Itogi that print abroad in order to ensure high quality.

"The motivation is political," claims Itogi's Ms. Lipman. "To crack down on freedoms there is no need at all to introduce censorship in the old Soviet way; they can always use economic pressure to make the media business unprofitable."

Laws granting tax breaks and customs privileges were designed to promote a flourishing media scene after seven decades of Soviet repression, but the real boost has come from big businessmen buying and founding papers and TV stations as lobbying weapons. Banking and oil tycoon Boris Berezovsky, for example, has used the ORT television channel and the daily Nezavisimaya Gazeta to promote his business and political interests, while rival Vladimir Guzinsky founded NTV television, Itogi magazine, and Sevodnya newspaper for the same purposes.

Such figures have been doubly hit by the crisis and its political fallout: They suffered financially from the collapse of the banking system, and also find themselves distanced from power under the new government. Less involved in Kremlin intrigue, and less likely to benefit from insider deals, they may now see less value in their media holdings as ways of wielding influence, media analysts here suggest.

This might offer the prospect of newspapers operating as commercial businesses, living on their earnings rather than on handouts. Mikhail Kozhokin, the newly appointed editor of the influential daily Izvestia, insists that "we consider ourselves businessmen, so we should not look for sponsors," and has developed ambitious plans for a national printing and distribution network so as to boost circulation. At the same time, Mr. Kozhokin holds another post at the paper: He represents Uneximbank, the main shareholder. Uneximbank is the financial empire that profited most from close Kremlin ties in recent years.

In Russia's regions, where a few hundred independent newspapers compete with thousands owned and subsidized by local governments, the prospects are slim for a healthy shakeout from the crisis.

"If all the papers were working in a market-oriented society and this was a market crisis that weeded out the weakest, that would be one thing," says Robert Coalson, who runs the National Press Institute's Media Business Development Service. "But this is a crisis that has been heavily politicized, so those weeded out will be those without subsidies, the ones that are commercially oriented toward their readers."

Moscow Times March 6, 1999

MAILBOX: Russia's Free Press Ends at Moscow's Ring Road

Robert Coalson, National Press Institute St. Petersburg

I am always alarmed when analysts claim that the establishment of a free press is one of the great achievements of post-perestroika Russia. Indeed, "vigorous criticism of the government in a multitude of newspapers" is often cited as the only real sign of reform in Russia over the last 12 years.

Most recently, I read this specious argument in your pages ("Time to Watch Liberties," March 3), when Masha Lipman wrote: "No less diverse than [the political scene] is our press, varying from liberal to communist to fascist, with all the major newspapers being still on the democratic side. Mockery of the government abounds in the papers and on television."

Lipman's description might apply to Moscow, but it looks pretty ridiculous once one gets beyond the Ring Road. In the vast majority of Russian cities, a very few private newspapers fight daily an uneven battle against state- controlled and state-subsidized competitors.

In Novgorod, often cited as one of Russia's most progressive regions, the deputy governor sits on the editorial board of the only significant local newspaper, "Novgorodskiye Vedomosti." In the town of Vsevolozhsk in the Leningrad region, faxes signed personally by the mayor recently went to every office in town urging them to subscribe to the newspaper put out by his press office: Incredibly, the good people of Vsevolozhsk can get home delivery of this weekly mouthpiece for six months for only 39 rubles! No wonder that the only private newspaper in town stopped publishing in July and is now going from one Western fund to another looking for grants.

I could go on forever. The situation is far, far worse in the more far-flung regions of Russia, where local officials keep the media under strict, Soviet- style control. In Kalmykia, President Kirsan Ilyumzhinov had the brilliant idea of paying collective farmers in the form of free subscriptions to the local subsidized newspaper. More than 90 percent of the print run of Izvestiya Kalmykii is distributed this way and each issue has from one to three articles singing the praises of Ilyumzhinov. In the Altai region there are practically no nonsubsidized newspapers.

A recent report by the Glasnost Defense Fund stated that no journalist is going to risk offending the authorities because they would never be able to get another job at any other paper in the entire region: "Local journalists say that it is very easy to work there since almost every government department holds a weekly press conference and all a journalist has to do is transcribe what is said word for word."

Even in Moscow, however, the situation that Lipman describes should not be mistaken for anything remotely like a "free press." I think that we should be candid and admit that Russia has no institutionalized, secure free press. If by a "free press," we mean something like "the existence of uncensored newspapers with a wide base of advertising support and the confidence of a diverse readership," there is none in Moscow or in Russia as a whole.

The state still controls the vast majority of Russian printing presses. The state does nothing to stimulate advertising in the nonstate press or to encourage real private investment in the media infrastructure. The state does not guarantee the press access to public information. What the state does do is prop up subsidized propaganda sheets that are killing the market that real newspapers should be operating in. Is it any wonder that corruption is rampant, that local private initiative is virtually nonexistent and that the Russian public is cynical and disillusioned with reform?