Publication: Monitor Volume: 6 Issue: 117

With criticism over the June 13 arrest of Media-Most chief Vladimir Gusinsky mounting at home and abroad, President Vladimir Putin yesterday denied that the action was politically motivated. During a press conference at the end of his official visit to Spain, the Russian head of state said he saw no “political aspect” to Gusinsky’s arrest, and that he had not yet been able to discuss the case with Prosecutor General Vladimir Ustinov, whose office arrested Gusinsky while the tycoon was being questioned in connection with the May 11 raid by police and prosecutor’s on Media-Most’s headquarters. “I don’t run the public prosecution service,” Putin said, noting that it is a “separate branch of power” (Russian agencies, Agence France Presse, June 14). Putin previously said that he had no prior knowledge of Gusinsky’s arrest, which was “a dubious present” to him (see the Monitor, June 13). The fact that Ustinov’s office was in charge of the arrest is bound to increase doubts that Putin is really running the show in the Kremlin. This is particularly so given the rumors last month that Ustinov, who was then acting prosecutor general, was made the country’s permanent chief prosecutor at the insistence of presidential administration chief Aleksandr Voloshin, a reputed member of the “Family,” the group of Kremlin insiders which includes, among others, the well-known “oligarchs” Boris Berezovsky and Roman Abramovich. According to these rumors, Voloshin forced Putin to withdraw the candidacy of his long-time associate Dmitri Kozak for the prosecutor general’s post and sign off on Ustinov’s appointment (see the Monitor, May 18-19).

Meanwhile, some sources say that the real reason for Gusinsky’s arrest was not, as stated officially, his alleged embezzlement of at least US$10 million in government funds connected with Media-Most’s privatization of Russkoye Video, a St. Petersburg-based company. Dmitry Rozhdestvensky, Russkoye Video’s general director has been in Moscow’s Lefortovo prison since 1998 on charges of stealing state funds and tax evasion (Moscow Times, June 15). The newspaper Nezavisimaya gazeta reported today that Gusinsky’s arrest was in fact the result of Media-Most’s worsening relations with Gazprom, Russia’s natural gas monopoly, which owns a 30 percent stake in Media-Most’s NTV and has guaranteed loans to the media holding worth at least several hundred million dollars (Nezavisimaya gazeta, May 15).

Indeed, Putin himself claimed yesterday in his Madrid press conference that Gusinsky had borrowed “a great deal of money” under a guarantee from Gazprom, and had recently failed to make a US$200 million payment on the loan. Putin claimed that Gusinsky had borrowed a total of more than US$1.3 billion for Media-Most from various sources but “has paid none of this back” (RTR, June 14). Gazprom, however, said yesterday that it had nothing to do with Gusinsky’s arrest (Russian agencies, June 14). What is more, it is unclear on what grounds Gusinsky could be jailed for failure to repay debts without a corresponding legal procedure and court verdict. It should also be noted that Boris Berezovsky, who many believe has been trying for a very long time to gain control of Gazprom, controls Nezavisimaya gazeta. Thus the paper’s reports about Gazprom’s alleged involvement in Gusinsky’s arrest could well be part of a Berezovsky-inspired intrigue. It is also worth recalling the theory reported last week in Novaya gazeta–that the May 11 raid on Media-Most’s headquarters by police commandos and prosecutors was aimed at seizing materials concerning the holding’s relations with Gazprom, particularly concerning a Gazprom-guaranteed credit from Credit Suisse First Boston, for which Media-Most reportedly gave a 40 percent stake in the holding itself as collateral. The paper implied that the raid was aimed at getting control of those Media-Most shares (see the Monitor, June 8). Earlier this year, Berezovsky predicted that there would be “some redistribution” of Media-Most’s property following Vladimir Putin’s inauguration as president (Moscow Times, March 25).

In the meantime, Gusinsky continues to be held in the Butyrka remand prison in Moscow on suspicion that he violated Article 159 of the Russian criminal code, involving “massive theft by a group of people through abuse of confidence and abuse of office.” Gusinsky could face ten years in prison if found guilty. He has not, however, yet been charged with any crime. He must be charged within ten days of his arrest or be released (Russian agencies, Agence France Press, June 15). Gusinsky’s lawyers today filed a complaint with the Tverskaya intermunicipal court in Moscow claiming that his arrest was “without basis” (Russian agencies, May 15).