Media Man's Dance With Authority

The system that Vladimir Gusinsky helped create has turned against him.

Gusinsky, now 47, emerged in the early 1990s as one of many rising entrepreneurs in the heady early days of the country's switch to capitalism.

Capitalizing on close ties to the Moscow government under Mayor Yury Luzhkov f who parked much of the city's accounts in Gusinsky's MOST Bank f the theater-director-turned-businessman built his fortune in banking and real estate development.

Gusinsky then used his financial empire as a base for the creation of the nation's leading private media empire.

In 1993, he launched Segodnya newspaper and then co-founded NTV independent television.

Despite only broadcasting 6 p.m. through midnight f the channel had to share its frequency with the state university station f NTV emerged as Russia's most professional television news outlet.

In December 1994, Gusinsky's offices were raided by troops from the presidential security service, who beat MOST Bank's security guards and forced them and other bank personnel to lie face down in the snow.

Click here to read our special report on the Struggle for Media-MOST.Alexander Korzhakov, who was then head of the presidential security service, had done nothing to conceal his dislike of Gusinsky. In one newspaper interview, he talked of his love of "hunting geese" f widely taken as a reference to Gusinsky, whose name derives from the Russian word for goose.

Korzhakov later wrote in his memoirs that Gusinsky's business rival Boris Berezovsky had asked him to arrange the murder of Gusinsky.

Gusinsky left Russia for London soon after the raid and did not return for several months. He later said that he had feared for his life at the time.

Despite the pressure on their boss f or perhaps because of it f NTV distinguished itself with the strongest coverage of the first Chechen war, in 1994 and early 1995. While state media offered heavily slanted reports from Russian military headquarters, NTV reporters roamed far afield, evenfiling reports from the Chechen side.

NTV's coverage further enraged Ko rzhakov and other Kremlin officials. At one stage the Kremlin barred NTV from presidential press conferences.

Gusinsky's fortunes changed when he joined Berezovsky and other "oligarchs" in backing Boris Yeltsin's re-election bid in 1996. One of Gusinsky's close associates who headed NTV at the time, Igor Malashenko, became the Kremlin's public relations strategist, and the channel started to beam similarly positive reporting of Yeltsin's campaign as the Kremlin-controlled ORT and RTR.

After Yeltsin was re-elected, Gusinsky received his rewards. In November 1996 NTV received a license to broadcast all day on Channel 4. Later, the government allowed NTV to set up its own satellite network, NTV-Plus, and state-owned Vneshekonombank provided guarantees for millions of dollars in loans.

In late 1997, Media-MOST had no difficulties obtaining a second broadcasting license for its newly founded THT network.

Perhaps most importantly, President Boris Yeltsin signed a decree allowing NTV to pay the same low rates for use of the state-owned national transmission network as those paid by state television channels ORT and RTR.

At a press conference earlier this month, Gusinsky said he regretted his participation in building up the system of "oligarch" rule under Yeltsin.

"Unfortunately, I was part of the team that in 1996 gave birth to this system," Gusinsky said on June 1. "Believe me, today I have to a large extent reassessed this process. If I could step into the same river twice, we would have behaved the same during the 1996 elections as we behaved in 1999 and 2000. But unfortunately, time flows only one way."

Gusinsky has said that the Kremlin again approached him last year asking for his media empire's help during the 1999 State Duma vote and this year's presidential polls.

The Media-MOST tycoon said that Kremlin Chief of Staff Alexander Voloshin f credited with helping Berezovsky mastermind the meteoric rise of President Vladimir Putin and the pro-Kremlin Unity Party f jokingly offered him $100 million not to be "in the way" during elections. Gusinsky said his refusal was seen by the Kremlin as a declaration of war.

Gusinsky's recent time of troubles openly began last June when state-controlled Vneshekonombank called in a $42 million loan.

Not long after, the holding's longtime partner and shareholder, Gazprom f in which the state holds 38.4 percent f demanded Gusinsky's firm repay a $211 million loan that the gas giant had first guaranteed and then taken over from CS First Boston.

The move coincided with a statement from Gazprom boss Rem Vyakhirev criticizing NTV's reporting on Chechnya, which, though it vacillated, was at times aggressively critical.

"As the head of Gazprom and as a citizen, I do not consider the position of NTV leadership on the Chechnya problem entirely correct," Vyakhirev said in an interview he gave to Interfax soon after a meeting with Putin. "Highlighting some negative aspects of [federal forces'] struggle against bandits is simply inappropriate," he added.

But while its news coverage has regularly irritated those in power, it also seems that Media-MOST's most egregious sin in the eyes of many Kremlin officials has been the sharp satire of NTV's popular political puppet show, "Kukly."

NTV director Yevgeny Kiselyov last month said that the channel had received a "shopping list" from a Kremlin official of measures it could take if it wanted authorities to make life easier for Media-MOST. Top of that list was a request to stop using the Putin puppet on the show, Kiselyov said.

While some might have expected matters to quiet down once Putin was firmly in power, they haven't.

Just four days after his inauguration, masked tax police, accompanied by federal prosecutors and Federal Security Service officers, raided several Media-MOST offices in Moscow.

Investigators said they had discovered evidence that Media-MOST security officials had been engaged in eavesdropping on prominent political and business.

Media-MOST officials have denied any wrongdoing. A Moscow district court ruled two weeks ago that the raids were illegally carried out.

One figure who had forecast tough times for Media-MOST was tycoon and arch-rival Berezovsky.

On the eve of the presidential election, he told Vedomosti that Media-MOST had major financial difficulties and that its "ownership structure" was likely to change.

Berezovsky recently called Gusinsky's media empire part of the "nonconstructive opposition" to the Kremlin.