Noviye Izvestia Dead -- Who's Next?

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Sergei Markov and Gleb Pavlovsky, the ideologues of "managed democracy," assure us that the current regime has no intention of eradicating free speech in Russia. According to their reasoning, the country's ruling elite cannot tolerate the existence of opposition television networks, but opposition newspapers are another matter. Newspapers exert no serious influence on the voters, and therefore pose no threat. In addition, they provide a harmless way for the intelligentsia to let off steam.

The facts do not support this theory, however. Markov and Pavlovsky clearly overestimate the rationality of the politicians who watch over them. Either that or those politicians possess a home-spun wisdom that their ideologues and political consultants cannot fathom.

The campaign to cut the print press down to size began with the closing of the Segodnya newspaper two years ago. Shutting down Vladimir Gusinsky's paper was a byproduct of the Kremlin's victory over Media-MOST and the confiscation of Gusinsky's television network, NTV. The newspaper was published by Sem Dnei, in which Dmitry Biryukov, formerly a loyal Gusinsky man, owned the controlling stake. But when the tide turned against Gusinsky, Biryukov sought the patronage of someone a little more powerful -- President Vladimir Putin. Sem Dnei closed Segodnya to curry favor with the Kremlin. The firing of Sergei Parkhomenko, editor of Gusinsky's Itogi magazine, was the icing on the cake.

Exactly one year later another opposition newspaper, Novaya Gazeta, found itself under threat. In April 2002, Mezhprombank won a libel suit it had brought against the newspaper in a Moscow court. The bank was awarded 15 million rubles (about $500,000) in "lost revenue." The award placed the paper's continued existence in doubt. Mezhprombank filed the lawsuit in response to a Novaya Gazeta article implicating the bank's top executives, including founder Sergei Pugachyov (a businessman close to Putin and the St. Petersburg chekists), in the Bank of New York money-laundering scandal.

Pugachyov chose not to sue for defamation. Instead, Mezhprombank sued for damage to its reputation and financial losses resulting from the publication. According to Mezhprombank, a number of its clients -- Veststroiservis Ltd., Biznes Master 2000 Ltd. and Utek -- were spooked by the article, fearing that it could undermine the bank's stability. That very day, the bank contended, these clients changed the terms of their accounts, forcing the bank to pay a 15 million ruble penalty under its contract with Utek, and costing it another 15 million in lost revenue (a total of some $1 million).

The unprecedented size of Mezhprombank's damage claim made clear that its real intention was to force Novaya Gazeta into bankruptcy and shut it down. Alexei Simonov, president of the Glasnost Defense Foundation, made this point explicitly in an article he contributed to Nezavisimaya Gazeta in June 2002. "A contract was put out on Novaya Gazeta," he wrote. "When a court awards such astronomical damages -- $1 million, then $500,000 ... it becomes clear that the lawsuit is just the means to an end."

Among the organizations that might have ordered the hit, Simonov named the Defense Ministry (for articles written by Anna Politkovskaya and Vyacheslav Izmailov), the Federal Security Service (for articles by Georgy Rozhnov), the Security Council and the Moscow City Court.

Novaya Gazeta was saved by its own ingenuity, specifically by the investigative reporting of Yulia Latynina. In an article that ran in May 2002, she showed that the three Mezhprombank "clients" named in its lawsuit were in fact direct subsidiaries of Mezhprombank or were owned by members of the bank's board of directors. Among the owners Latynina discovered not only Pugachyov, but his wife Galina Pugachyova and other top bank executives. (Latynina's column on the scandal ran in The Moscow Times on May 29, 2002.)

In late May, Latynina and the Novaya Gazeta editorial board requested that the Moscow prosecutor's office open a criminal fraud investigation into the activities of Mezhprombank and its affiliates. In this instance, the journalists prevailed. The bank's fraudulent practices, outlined in documents it filed with the court, were so obvious that in June 2002 it renounced its claim to the court-ordered award.

Just as Novaya Gazeta was narrowly avoiding bankruptcy, another independent newspaper, Obshchaya Gazeta, the last mouthpiece of the 1960s-era liberal intelligentsia, closed its doors. Facing an uncertain financial future, founder and editor Yegor Yakovlev sold Obshchaya Gazeta to St. Petersburg businessman Vyacheslav Leibman, who turned around and closed the paper, launching a new paper called Konservator, or The Conservative, in its place. To no one's surprise, Konservator hewed a consistently pro-Putin line, unlike its predecessor.

Yakovlev seemed sure to the end that Obshchaya Gazeta would continue to operate after the sale, and that the editorial staff would remain intact, at least for a while. It remains unclear why Leibman spent a considerable sum buying and closing one newspaper before launching his own. It seems reasonable to assume that the purchase of Obshchaya Gazeta was in fact funded by a third party in order to ensure that someone else (Gusinsky and Berezovsky come to mind) didn't get there first.

Noviye Izvestia's Oleg Mitvol was every inch a loyal Berezovsky man. He owns 76 percent of the stock in Noviye Izvestia; the newspaper's staff owns the rest. Mitvol's controlling stake once belonged to Berezovsky, who signed it over to Mitvol before he fled the country. In his haste to clear out of Russia, Berezovsky put nothing in the transfer documents to prevent Mitvol from acting unilaterally. The risk, of course, was that Mitvol would stab him in the back. But at the beginning, Mitvol betrayed no inclination of twisting the knife.

Mitvol did not interfere in Noviye Izvestia's editorial policy. He was far more concerned with his own business interests -- chemical companies -- which he bought up one after the next, very much in the manner of his namesake, Oleg Deripaska. Deripaska gets away with expanding his business empire because he doesn't finance opposition newspapers. On the contrary, he has taken an active part in "re-educating" Yevgeny Kiselyov's team at TVS.

It should be noted that Berezovsky, not Mitvol, continued to bankroll Noviye Izvestia. Officially, it seems, the money flowed through Mitvol's companies, bringing him a tidy profit in exchange for accepting a considerable risk. It therefore came as a surprise last week when Mitvol accused the newspaper's management of misusing "his" money. He sacked Igor Golembiovsky from his post as general director, and shut the paper down "until Tuesday."

"Oleg Mitvol's charges of financial mismanagement are absurd," Valery Yakov, deputy editor of Noviye Izvestia, told Kommersant. "Mitvol himself was responsible for our finances. We believe that these events are linked to recent articles critical of Putin."

Assuming that the version about the Kremlin being behind the closure of Noviye Izvestia is indeed close to the truth, then it should come as no surprise if, in the near future, the remaining oppositional and semi-oppositional papers -- such as Novaya Gazeta, Nezavisimaya Gazeta and Moskovskiye Novosti -- start to experience serious problems.

Vladimir Pribylovsky, director of the Panorama think tank, contributed this comment to The Moscow Times. His article "Plus Putinization of the Entire Country. A Chronicle of Glorification" ran in Noviye Izvestia's last issue.