Publication: Monitor Volume: 7 Issue: 32

Some critics have accused the Russian authorities of bias and selectivity in their vigorous prosecution of Vladimir Gusinsky and Media-Most, and the results of a probe undertaken last March by a state agency would seem to bear that charge out. The investigation was conducted by the Audit Chamber, the state watchdog headed by Sergei Stepashin which oversees the use of federal funds. Its object was the All-Russian State Television and Radio Company (VGTRK), the state media holding which includes RTR television and is currently headed by Oleg Dobrodeyev, former president of Media-Most’s NTV. According to a newspaper account of the Audit Chamber’s findings, VGTRK–which, despite being a state media company, is supposed to make a profit–has been given a host of preferences over other media. These even include financial support from its competitors: Since 1998, VGTRK has received payments from private broadcasting companies for the use of the airwaves. Yet despite the fact that these broadcasting fees were doubled last year, bringing VGTRK 259.2 million rubles (around $9.25 million), VGTRK’s main media (not including its affiliates) have been operating in the red. The holding lost 922 million rubles (US$32.9 million) in 1999 and 585.4 million rubles (US$20.90 million) in the first six months of last year, even though it also received 1403.6 million rubles (US$50.12 million) in federal budget funds in 1999 and another 2565.6 million rubles (over US$90 million) during just the first half of last year. According to the state auditors, the main reason the money disappeared was because it went toward paying off loans taken from commercial banks (including Alfa Bank and, ironically Vladimir Gusinsky’s Most Bank). The totals for these loans rose from 1853.4 million rubles (US$66.1 million) in 1999 to 3422.6 million rubles (US$122.2 million) during the first six months of 2000. Meanwhile, the investigators found that in 1999 the company spent more than 900 million rubles (more than US$32 million) on securities issued by various banks.

On top of all this, the auditors found an agreement dated August 24, 1998–a week after Russia’s financial crisis–by which the author of the weekly news program Zerkalo (presumably its host, Nikolai Svanidze) was guaranteed a US$25,000 fee for each program over five years. Finally, and most significant, the state auditors found that while Russia’s television advertising market in 1999 totaled US$190 million, and RTR state television had a 20 percent share of that total (around US$38 million), the channel only received US$18 million from its sole advertising agent–Video International, the company founded by Mikhail Lesin, who is today Russia’s press minister. Last year, Russia’s total TV ad market was worth US$270 million, and RTR should have received around US$22 million during the first six months of the year. Instead, it received only US$14 million. It was not clear what happened to the difference. By way of comparison, Media-Most’s NTV received US$60 million for advertising in 2000. Finally, the Audit Chamber found that VGTRK regularly underpaid its taxes.

The Audit Chamber’s findings, it should be noted, were apparently not meant to be made public: in fact, they were marked “secret.” The chamber’s bottom line, according to the newspaper that published the results of its probe: “If the law enforcement organs approached the VGTRK company with the same standards they are applying today to Media-Most and NTV, the company, judging by the facts discovered by the auditors, would long ago have been smashed; its current chairman would be under investigation, as would its previous ones; and Press Minister Lesin, the person who singlehandedly determined VGTRK’s financial activity under all of its chairmen, would unquestionably be sitting in prison” (Obshchaya Gazeta, January 25, February 14).