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. Last Updated: 07/27/2016

Charges Dropped Against Gusinsky




The much-hyped criminal case against media tycoon Vladimir Gusinsky has ended in bewildering silence. The charges against him have been dropped, his property is no longer impounded and he is free to travel, his Media-MOST holding company announced Thursday.


After being notified Wednesday evening, Gusinsky immediately flew to Spain, where his family has been staying since his sensational arrest June 13.


Neither Media-MOST nor the Prosecutor General's Office was eager to discuss the sudden turn in the case, which had grabbed headlines around the world and been played up as a Kremlin attack on freedom of the press in Russia.


The lack of information left observers to speculate that Gusinsky may have yielded to pressure from the Kremlin and relinquished some of his control over Media-MOST or that some kind of agreement was reached under which Gusinsky's media would soften their criticism of the Kremlin.


The Moscow media community was filled with rumors that Gusinsky has sold his stock in NTV television, the flagship of his media empire and the only independent station with a national audience.


Gusinsky, who was held for three days in the notorious Butyrskaya Prison, was charged with gross embezzlement in connection with the privatization of St. Petersburg television company Russkoye Video. Investigators accused him of cheating the government to the tune of $10 million. His repeated requests to leave the country were denied.


Click here to read our special report on the Struggle for Media-MOST.Only last week, the investigation was in full swing. On July 19, prosecutors began impounding Gusinsky's property f a house outside of Moscow and the household items inside f that could have been eventually confiscated if the court had ruled against Gusinsky. It was not clear if Gusinsky's stocks were to be arrested as well.


In the course of the investigation, prosecutors also took a keen interest in Media-MOST's relationship with its largest shareholder and creditor, Gazprom. They seized documents at both companies, which are negotiating a potential debt-for-equity swap.


The investigation ended suddenly Wednesday with little explanation from either the prosecutor's office or Media-MOST. NTV f which has run a virulent public relations campaign defending Gusinsky, reporting his every arrival for questioning at the prosecutor's office, accusing Prosecutor General Vladimir Ustinov of corruption and President Vladimir Putin of conspiring to clamp down on free speech f did not report that the charges had been dropped until late Wednesday, after Gusinsky had safely landed in Spain. On Thursday, the company's newscasts barely mentioned the news.


The press service of the Prosecutor General's Office could not even confirm Thursday afternoon that the charges against Gusinsky had been dropped, even though hours earlier Media-MOST had posted on its web sites a copy of the prosecutor's official letter to Gusinsky stating that the criminal case had been closed for lack of evidence that a crime had been committed.


"We have nothing to add to what has been reported before: that travel restrictions are lifted but the investigation of the Russkoye Video case continues," Irina Reshchikova of the prosecutor's office press service said Thursday afternoon in a telephone interview. Only later in the day, through Interfax, did her office confirm that the charges against Gusinsky had been dropped.


Neither Gusinsky nor his deputy Igor Malashenko were heard from Thursday. Media-MOST spokesman Dmitry Ostalsky said he could not comment on whether any deal was made with the authorities. He said the negotiations with Gazprom were still underway and denied that NTV or any other Media-MOST companies would change their news coverage.


"All Media-MOST media will work as they have worked: according to their principles of free journalism," Ostalsky said.


Kommersant newspaper, which is owned by Gusinsky rival Boris Berezovsky, suggested Thursday that loyalty to the government was the price of Gusinsky's freedom.


The editor of the Itogi weekly magazine, one of Gusinsky's media outlets, angrily brushed aside the Kommersant report. "I don't know anything about such deals," Sergei Parkhomenko said by telephone. "Our editorial policy has not changed and I have not received any suggestions, let alone orders to do it.


"We have our opinion on everything that's happening in Russia f on the war in Chechnya, on the president's policies, you name it. And our opinion hasn't changed. That's also why I don't really expect our conflict with the state structures to end overnight."


Press Minister Mikhail Lesin said he approved of Gusinsky's release from prosecution. "If you assess it in the perspective of what is good and bad for the society, it is good," Lesin said in a telephone interview. "I am satisfied that it happened so."


He also said negotiations between Media-MOST and Gazprom were not completed yet.


Gazprom officials could not be reached for comment Thursday. The natural gas giant controls at least 48.3 percent of Media-MOST, most of it as a collateral for two huge loans that Gazprom guaranteed: $211 million that matured in March and $170 million that matures next year. The two companies are currently negotiating to close the deal, which had been conceived as a debt-equity swap.


Alfred Kokh, director of the recently revived Gazprom-Media company, said Wednesday that negotiations were still underway to take a package of Media-MOST stock in exchange for the debt, Interfax reported. "At the moment, the parties have not come to an agreement on the amount of stock necessary," Kokh was quoted as saying.


Anna Kachkayeva, a television analyst who works at Radio Liberty and Moscow State University, said Thursday that some kind of deal between Media-MOST and the Kremlin must have been made, and it is only a matter of time before it becomes evident.


In last Sunday's "Itogi" political program, NTV general director Yevgeny Kiselyov had already toned down the virulent attacks on Putin that had become characteristic of his programs, Kachkayeva said. But she said it was unlikely that a word of honor from someone seen by the Kremlin as a sworn enemy would be sufficient.


"I think we will see some sort of development in the near future," Kachkayeva said. "If Gusinsky indeed sold something, imagine what an awful situation would emerge if it was directly tied with his acquittal f the state would look like a racketeer."


One possibility, Kachkayeva said, is that the prosecutor's office found it unable to take a controlling share of NTV. The ownership structure of the television station has never been clear.


The closure of the case against Gusinsky must have been embarrassing for the investigators, who had repeatedly pledged that they had sufficient grounds to charge him.


"No matter how much they had tried to prove that they were investigating Gusinsky's thievery, the sudden acquittal proves that it was a political case," Kachkayeva said. NTV's refusal to elaborate on its legal victory Thursday also is proof of an agreement, she said.


Yevgeny Volk, political analyst and director of the Heritage Foundation's Moscow office, said the closure of Gusinsky's case was aimed at relieving tension in the business community ahead of Friday's meeting between Putin and the oligarchs.


"It has emerged as a trademark method of Putin and the special services: to attack, test the reaction in society and in the West and then either push further or back out," Volk said in a telephone interview. "They appear to have found a compromise: They let Gusinsky go and his media will become more loyal."