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. Last Updated: 07/27/2016

U. S. Privatization Funds Misused, Official Says

Russian officials turned a television commercial on the privatization program paid for by the U. S. government into an ad supporting candidates favoring President Boris Yeltsin, a U. S. official said Wednesday.

The commercial, aired on Russian television last week, had been designed to promote privatization but was changed to include the name of the pro-Yeltsin Russia's Choice party, according to Jim Norris, Moscow director of the U. S. Agency for International Development, or AID.

A spokesman for the Russian State Property Committee, which ordered the commercial, acknowledged that the committee had changed the wording but insisted that it had not tried to promote any political party, the Los Angeles Times reported Wednesday.

AID bans the use of its funds for political purposes.

Russia's Choice, leading in election polls, is headed by First Deputy Prime Minister Yegor Gaidar and Deputy Prime Minister Anatoly Chubais, who heads the State Property Committee that oversees the privatization campaign.

"Your Voucher, Your Choice", said the ad when it was produced by Sawyer Miller, an American public relations firm hired by the State Property Committee with AID funding.

The ad was part of an $80 million AID program designed to assist the privatization campaign, according to Norris.

The wording was changed to "Your Choice, Russia's Choice".

According to Norris, the State Property Committee convinced the Russian advertising firm that had produced the ad for Sawyer Miller to change the wording.

He said the change was not approved by officials of the U. S. assistance program in Moscow but it may have received the go-ahead in Washington.

The commercial was paid for by Sawyer Miller but aired under supervision of Burson-Marsteller, another agency which had taken over the project from Sawyer Miller by that time, Norris said.

Burson-Marsteller approved the new ad, Norris said, adding "They didn't immediately recognize that the message could have a political interpretation".

When the company found out it had aired an election ad, he said, it convinced the State Property Committee to change the text.

The committee pulled the ad altogether earlier this week, he said.

"We have nothing to do with the ad", said Timothy Brosnahan, managing director of Burson-Maisteller. Brosnahan added that his company had taken over the advertising contract this month after the ad was contracted and paid for by Sawyer Miller.

State Property Committee officials were not available Wednesday.

But the Los Angeles Times article quoted spokesman Igor Plotnikov saying. "In my view it's just a good play on words".

Norris said that no U. S. government money had been used to pay for the airtime.

When Norris told Sawyer Miller that it would not reimburse the $7, 000 spent on airtime, the State Property Committee agreed to pay, he said.