MURKY PRIVATIZATION IN RUSSIA’S SECOND CITY.

The St. Petersburg Times has launched a series of articles exploring the shadowy history of privatization in Russia’s northern capital — a process which culminated in the assassination of Mikhail Manevich, deputy governor and head of the City Property Committee, in August of this year. (St. Petersburg Times, 20-26 October)

The first article explores the history of the Non-Residential Fund, a state-run real estate agency that was privatized as the PREO company in 1995. Back in 1990, as "spontaneous privatization" blossomed in the chaos of the late perestroika era, the agency was granted a sweetheart deal allowing it to acquire ownership of 262 choice buildings in downtown St. Petersburg for the ruble equivalent of $17,000 (that is, $65 per building). In 1994 the firm joined with a giant privatized trading company, Soyuzkontrakt, to move forward on the deal. Manevich, who took office in 1993, cut the number of buildings involved from 262 to 51 and raised the price. So far PREO and Soyuzkontrakt have bought only 11 of the buildings, for a total $4.2 million — which is still only a small fraction of their true market value.

Why Manevich was killed is still an open question — despite an angry promise by First Deputy Prime Minister Anatoly Chubais, a former Leningrader and friend of Manevich, to bring his killers to justice. Is he a martyr, slain because he was obstructing the PREO deal, or did his death have nothing to do with that project? In this case, as in many other similar stories, both high and low profile, it seems unlikely that the truth will ever be known. It is increasingly common for sensitive stories, with connections to senior officials, to appear in the English-language St. Petersburg Times and not in other Russian papers, which are wary of stepping on the toes of their political and financial backers.

Primakov in Middle East.