Publication: Monitor Volume: 5 Issue: 187

The mud flew fast and thick in the Russian media over the weekend, with NTV television, founded by Vladimir Gusinsky, listing new corruption allegations against the Kremlin inner circle, and Russian Public Television (ORT), which is said to be controlled by Boris Berezovsky, taking aim at Gusinsky’s business empire.

Yesterday evening, during its weekly news program Itogi, NTV charged that the presidential administration was the “krysha” (roof, meaning protection) for a scheme to launder money illegally abroad. The channel alleged that one vehicle for such money laundering was Sedmoi Kontinent, a chain of upscale grocery stores in Moscow, whose security service was once headed by Vladimir Makarov, a former KGB general, who today is a deputy to Kremlin administration chief Aleksandr Voloshin–and whose father-in-law, reportedly, is Sedmoi Kontinent’s managing director. According to NTV, Makarov is yet another major behind-the-scenes power broker: The channel claimed that all nominations to high posts in Russia’s Special Services and Military and Prosecutor General’s Offices must be cleared first by him. NTV also alleged that in December 1998, several days after Makarov was made a deputy head of the presidential administration, some US$75 thousand was transferred to a bank account belonging to him in Andorra. NTV asked Aleksandr Pochinok, Russia’s tax chief, whether it was legal for a high official such as Makarov to have foreign bank accounts and whether Pochinok had information about Makarov specifically. Pochinok looked stunned–or frightened–first answering, “There are many Makarovs,” and then saying he thought Makarov had completed all of his required income declarations.

NTV alleged that Sedmoi Kontinent’s partner in the money laundering scheme was MDM Bank, and noted that Aleksandr Mamut, another recently discovered shadow member of the Kremlin “family,” as the Russian press calls President Boris Yeltsin’s inner circle, is both chairman of MDM Bank’s observational council and an adviser to Voloshin. Mamut also sits on the board of directors of Sobinbank, which was recently raided by police (see the Monitor, October 5). NTV also charged that MDM Bank’s money exchange points were used for illegal money laundering.

Last week, Pochinok told an American newspaper that one specific bank, whom he did not name, was the author of the scheme to launder money through the Bank of New York (New York Times, October 8).

Meanwhile, last night Sergei Dorenko, the host of ORT’s weekly news analysis program, featured a segment from his trip to Spain, where he filmed luxury homes allegedly part of a compound housing executives from Vladimir Gusinsky’s business empire, including Most-Bank and Media Most (NTV belongs to the latter), along with other businessmen closely connected to Moscow Mayor Yuri Luzhkov. Dorenko was waylaid by a British couple who allegedly work for Gusinsky, who called in members of Most’s private security service. Dorenko was subsequently detained by Spanish police (ORT, October 10).

Last week, Moscow law enforcement authorities began a criminal case against Dorenko for slander, after his show accused Luzhkov and his wife of involvement in high-level corruption, including the case of Mabetex, the Swiss construction firm suspected of giving kickbacks to high Russian government officials in exchange for lucrative Russian government construction and refurbishment contracts. Over the weekend, Luzhkov called on the Moscow Prosecutor’s Office to stop criminal proceedings against Dorenko. Luzhkov said that he viewed freedom of speech as one of Russia’s hard-won democratic values, but also emphasized that he would sue Dorenko for slander (Russian agencies, October 9). Today Luzhkov referred to Dorenko’s de facto boss, Berezovsky, as “Satan” (Russian agencies, October 11).

Some observers believe the presidential administration–and, more broadly, the “family”–is carrying out a strategy of trying to show that Luzhkov is just as dirty as they are. That strategy would appear to be working, given that Luzhkov’s approval rating in polls has been steadily dropping. Others believe that the Kremlin has the goal of driving a wedge between Luzhkov and the other leader of the Fatherland-All Russia political coalition–former Prime Minister Yevgeny Primakov (Profil, October 11).

Igor Shabdurasulov, first deputy head of the presidential administration, said today that the presidential administration does not plan to play the role of “arbiter” in the intensifying media wars (Russian agencies, October 11). This would make sense, given that the presidential administration appears to be one of the participants in that war.