Publication: Monitor Volume: 6 Issue: 165

Press Minister Mikhail Lesin, while attempting yesterday to quell the controversy surrounding secret budget funding for the mass media, revealed that, in next year’s budget, spending on state media–meaning both the nonclassified and secret budget items–will in fact be much less financially transparent than in past years. He said that spending for the state print media and VGTRK, the state television and radio company, will be lumped together in one sum in next year’s budget, rather than detailed item by item, as was the case in past budgets. Even more significantly, Lesin revealed that starting next year, the Finance Ministry will cancel all the state media’s accounts in the state treasury system and switch to using accounts in commercial banks. What this means, a newspaper reported today, is all the funds earmarked for the state media–according to the paper, 5.985 billion rubles, which is likely to be some US$200 million next year–will first go to Lesin’s Press Ministry, after which they will be transferred to the various media’s accounts in commercial banks. Lesin promised that the Press Ministry will regularly present the Finance Ministry with detailed reports on how the money earmarked for the state media is spent, and noted that state media can also be investigated by the Audit Chamber, an independent government agency which monitors the use of budget funds (Vedomosti, September 7).

The use of so-called “authorized” commercial banks to hold state funds, however, was a major source of abuse and corruption throughout the 1990s, and oversight by both the Finance Ministry and Audit Chamber did little to stop such waste, fraud and abuse. Beginning in 1997, then President Boris Yeltsin and top officials in his government, including Anatoly Chubais, then finance minister and economics tsar, promised that all state budget funds would be transferred to a state treasury system. The Putin government has also made that promise–with the same level of sincerity and commitment, apparently.

Given Lesin’s assurances about oversight by the Audit Chamber, it was ironic that he reacted angrily on September 3, when State Duma Deputy Leonid Maevesky, who last week revealed the existence of secret media funding in next year’s budget, announced that the Audit Chamber would soon begin to audit VGTRK, the state radio and television company. In a televised appearance with Lesin, Maevesky said that the Audit Chamber would, among other things, look into the relationship between VGTRK and Video International, the giant advertising firm that has a monopoly on selling advertising airtime on both Russian Public Television (ORT) and RTR state television. In response, Lesin alleged that Maevesky was connected to a private company which had lost a tender for some kind of license, and that following the tender, Maevesky had threatened him (Obshchaya gazeta, September 7).

Be that as it may, Lesin’s anger over the prospects of a government probe into the relationship between VGTRK and Video International is understandable. Lesin founded and headed Video International and, prior to becoming press minister, served as deputy head of VGTRK. Video International, which played a key role in Boris Yeltsin’s 1996 re-election campaign, worked on behalf of the Union of Right-Wing Forces, which includes Anatoly Chubais, Boris Nemtsov and Sergei Kirienko, during last year’s parliamentary election. Lesin has also frequently been identified in the Russian media as a top member of the “Family,” as Yeltsin’s inner circle was–and is still–called. Some observers believe that if the state eventually reasserts control over ORT and takes over Media-Most, Lesin could become the most powerful figure in the Russian media.