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6/23/00 6:45 p.m.
Dogs Fighting under a Carpet
Questions about Russia's new regime.

By Paul Saunders, director of the Nixon Center

he detention and release of Russian media tycoon Vladimir Gusinsky for questioning in an embezzlement case raises important questions about domestic developments in Russia. This is true whether or not Russian President Vladimir Putin had advance knowledge of the arrest.

Gusinsky has been under pressure from the Russian government for a number of months, since his media empire supported former Prime Minister Yevgeny Primakov and Moscow Mayor Yuri Luzhkov against Putin last fall. The Moscow headquarters of Media-MOST, his media holding company, were raided by heavily armed tax police just a month ago. The raid was purportedly related to illegal surveillance activities by the Media-MOST security force; given Russia's ruthless business environment, the earlier charges are not easy to dismiss.

In the weeks since the May 11 raid, Gusinsky has sought to position himself and Media-MOST as persecuted defenders of Russia's free press, because his television station and newspapers have opposed the Putin government and its war in Chechnya. Nevertheless, while Gusinsky is right to question the government's motives, pressure on independent media is only a part of the campaign against him.

Yuri Shchekochikhin, a leading democratically oriented member of the Russian State Duma who serves as deputy chairman of the parliament's Security Committee, argued that the arrest reflected "a struggle underway between two oligarchs using the presidential administration and its subservient prosecutor's office." He suggests that Gusinsky's detention was orchestrated by a group of powerful business and government leaders clustered around Alexander Voloshin, President Putin's chief of staff.

Shchekochikhin's perspective is particularly significant, given that he also serves as deputy editor of Novaya Gazeta, a muckraking Moscow newspaper known for controversial exposes of official corruption and other scandals. Novaya Gazeta has itself been a target of government pressure, most recently after publishing an interview with Chechen President Aslan Maskhadov that the government's press ministry construed as supporting the Chechen "terrorists." Thus Shchekochikhin's emphasis on Kremlin intrigue (rather than an anti-media campaign) has a certain credibility.

The fact that Gusinsky was in fact charged in the case was a major political development in Russia; nevertheless, whether he will in fact be prosecuted remains an open question. Despite years of blatant high-level corruption in Russia, no prominent public figures have been tried for such activities. Gusinsky's case could thus create new rules in Russia's ugly internal squabbles, possibly encouraging greater caution — or greater ruthlessness — by his remaining rivals.

As the process moves forward, three questions loom large. First, regardless of the outcome of the criminal case against Gusinsky (which is impossible to evaluate without more detail), will the media magnate receive due process? Deviation from appropriate legal procedures would be a discouraging development, particularly given the multiple politically related motives for targeting the media tycoon.

Second, will Gusinsky be the first — or the last — of Russia's oligarchs to suffer whatever fate awaits him? If he is the last, political explanations for Gusinsky's removal will become even more compelling. The case against him would then be at best a very selective application of justice.

On the other hand, if Mr. Gusinsky is but the first victim of a broader move against Russia's oligarchs, including those close to the regime, the consequences for Russia's political and economic future could be profound. Destroying the oligarchs' hold on the country is a must in creating a level playing field for investors — Russian and foreign alike — and in reducing Russia's pervasive corruption. The swift and vocal reaction of Gusinsky's colleagues to his arrest (through a highly publicized and sharply critical open letter to President Putin signed even by key rivals of Gusinsky) illustrates the extent to which Russia's business elite perceives its interests to be threatened by the case.

Yet, while cutting the oligarchs down to size could facilitate Russia's further development, it also presents a danger. In combination with President Putin's moves against regional elites, elimination of the oligarchs as a source of independent power could signal the emergence of an authoritarian regime in Russia. As in the case against Gusinsky, due process will be a key issue.

Third, what did President Putin really know? He claimed that Russia's prosecutor general moved against Gusinsky independently, without his knowledge. Putin made the same claim last month after the raid on the Media-MOST offices … and earlier this year after the detention of Radio Liberty journalist Andrei Babitsky … and last fall about the media campaign against Moscow Mayor Yuri Luzhkov and former Prime Minister Yevgeny Primakov, who led a key party competing with the pro-Putin Unity party in December's elections. If Putin did not in fact know about these developments, his lack of control over his own government and political allies is disturbing.

If, however, the Russian president was aware of what was happening, his continuous attempts to create "plausible deniability" give credence to concerns about the political consequences of Putin's seventeen-year KGB career. Interestingly, the affair seems to have had precisely this effect in Moscow. In a recent poll on the Gusinsky affair, some 71% of respondents believed that Putin knew beforehand that Gusinsky was to be arrested; 49% said that Putin demonstrated "hypocrisy" in his handling of the matter.

If Russians themselves view the Gusinsky scandal with skepticism, outsiders would do well to treat the claims and counterclaims of both the Russian government and Media-MOST with similar caution.

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