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. Last Updated: 07/27/2016

Tax Police Raid Fading Star Lisovsky

Federal tax police have cracked down on the publishing and advertising empire controlled by controversial businessman Sergei Lisovsky.

In unusual and highly publicized actions Friday, tax police raided Lisovsky's apartment, dacha and offices and held him for questioning. The apartment of Lisovsky associate Vladimir Grigoryev, head of the Vagrius publishing house, was also ransacked, and Vladimir Zhechkov, who runs the advertising arm of the Lisovsky conglomerate, was interrogated.

Apart from Vagrius, a leading Moscow book publisher, Lisovsky's empire includes the advertising agency Premier SV, which has a monopoly on advertising on Russia's biggest TV station, ORT, and the pop music promotion agency Rise Lis's, a top organizer of concert tours.

The empire has been hard hit by the financial crisis, and Premier SV is reportedly unable to repay a $50 million debt to ORT.

Analysts said the showy tax raids, which produced television footage of overturned bookcases and wads of confiscated cash, became possible only because President Boris Yeltsin is no longer protecting the businessmen who helped him win re-election in 1996. The tax police can now use these largely unpopular businessmen to start an intimidation campaign aimed at making Russians pay their taxes.

"The [tax] agencies are now allowed to go as far as they want when acting against people who used to be close to Yeltsin," said Andrei Piontkovsky, director of the Center for Strategic Studies, a Moscow research organization. "These people's past services no longer count."

In 1996, Lisovsky organized the "Vote or Lose" campaign for Yeltsin, aimed at getting out the youth vote. It included concerts throughout Russia, which were organized by Rise Lis's. Right before the election, Lisovsky was caught leaving the Russian government building with a cardboard box containing $500,000 in cash, which media have speculated was meant for paying pop stars participating in the campaign.

Later, charges against Lisovsky were quietly dropped.

But Lisovsky remained a suspect in the 1995 murder of ORT founder Vladislav Listyev, who had tried to root out shady advertising deals at the channel.

The advertising mogul was questioned shortly after the murder, but he was never charged.

Lisovsky hinted that Friday's tax raids could have had something to do with the Listyev case, which the Prosecutor General's Office is under pressure to solve.

The tax raid "was ordered by the Prosecutor General's Office, which is trying to use the tax police to solve some cases it hasn't been able to solve," Lisovsky said.

But there is another, more obvious reason for the tax police to bother Lisovsky. He is currently battling against them in an arbitration court over an alleged 240,000 ruble tax shortfall.

Lisovsky's lawyer Anatoly Kucherena said Sunday that by their harsh actions the tax authorities were trying to pressure the court.

Sergei Parkhomenko, a spokesman for the Taxpayers' Society, a taxpayer rights organization, said Lisovsky's complaints may be justified but that the tax police had not broken any rules.

The tax police, he said, had the right to search Lisovsky's offices and apartment on the grounds that Lisovsky might be trying to destroy documents related to the case or preparing to escape in violation of his written promise to stay in Moscow pending a court decision.

According to Parkhomenko, however, the raids may have been prompted by desperation on the part of the tax authorities.

They may have realized that they would lose the court case and decided to "go for broke," Parkhomenko said. "This is a typical situation," he added.

Nikolai Medvedev, the tax police investigator who questioned Lisovsky, told NTV that at the moment, Lisovsky, Zhechkov and Grigoryev were suspected of tax evasion as individuals, but that the tax police also had proof of large-scale tax violations by Lisovsky's companies.

Be that as it may, Lisovsky still has powerful supporters in the Moscow political world. Moscow Mayor Yury Luzhkov on Monday condemned the raids, calling them "unacceptable and very dangerous."

"Why stage these demonstrations, these show-off acts of intimidation?" Luzhkov questioned in remarks reported by Interfax.

Luzhkov seems an unlikely ally for Lisovsky, who has never publicly supported the Moscow mayor the way he backed Yeltsin in 1996. But Luzhkov is at odds with Boris Berezovsky, the well-connected tycoon who controls ORT and who is reportedly trying to take over Premier SV in a debt-equity swap.

Some analysts have theorized that Berezovsky could be behind the tax police raids.

But the crackdown could have been prompted by Lisovsky's other numerous competitors and personal enemies.

"It is impossible to overestimate the number of those interested in forcing [Lisovsky] off the market," said Yelena Koneva, director general of the COMCON media market research agency.