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Ben Dunlap, Editor

Editorial Staff: Melissa Carr, Vladimir Boxer, Emily Van Buskirk, David Rekhviashvili, Emily Goodhue

RUSSIA WATCH

A
Graham T. Allison, Director

Strengthening Democratic Institutions Project

John F. Kennedy School of Government

Harvard University
nalysis and Commentary


No. 6, June 2001

RUSSIA’S EMBATTLED MEDIA





In January President Putin invited two dozen of his country’s top journalists to the Kremlin. Paraphrasing Mark Twain, he assured them: “rumors of the death of free press in Russia are greatly exaggerated.”

President Putin has a point. Chechnya aside, cases of outright censorship are few, and the state tolerates criticism that would have been unthinkable ten years ago. Compared to the Soviet Union even at its most liberal during Mikhail Gorbachev’s glasnost policy, the number and variety of publications, radio stations, and television channels available today in Moscow and in the regions is startling. Opinions, allegations, and indeed what in the U.S. would constitute libel, proliferate in Russia—offering an array of information as diverse as that available in any Western European country.

But since Putin took office, the country’s biggest and most influential media outlets have been under pressure. As the Putin government has defined its priorities (which do not include support for bases of power independent of the government), the prospects for true media independence have diminished.

The most dramatic example of this trend can be seen in Russian television. At the beginning of President Putin’s term there were four TV stations with a broadcasting range of over half the Russian viewing population: ORT, RTR, NTV, and TV-6. Though majority-owned by the state, ORT (which reaches 99 percent of viewers) was controlled by the now exiled oligarch Boris Berezovsky, who was close to

Rumors of the death of free press in Russia are greatly

exaggerated.”—President Putin

Yeltsin’s administration and backed pro-Kremlin candidates in the 1999 parliamentary and 2000 presidential elections. RTR (which reaches 95 percent of Russian viewers) is owned by the state and controlled by the Ministry of Press. Though generally a mouthpiece for government policy, it has offered occasional glimpses of professionalism, as in its coverage of the 1994-1996 war in Chechnya. NTV (which reaches 72 percent of viewers) reflected the views of its owner, media magnate and banker Vladimir Gusinsky, who used the channel to campaign against Putin in the parliamentary and presidential elections. Nonetheless, NTV earned a reputation as the highest quality television news network with critical reporting and professional programming. TV-6 (which reaches 58 percent of viewers) was also owned by Berezovsky, but never attracted a large audience.

Of the four networks, only TV-6 remains independent from state control today. In the past year, Berezovsky has sold his stake in ORT to Kremlin-friendly shareholders, claiming the government forced him to do so or risk prosecution. Natural gas behemoth Gazprom (in which the government owns 38 percent of shares) has wrestled control of NTV away from Gusinsky. The new General Director of NTV, Boris Jordan, insists he will maintain editorial independence from government minders. (Continued on p. 4.)

IN THIS ISSUE:

Alfred Kokh

General Director, Gazprom-Media



Gusinsky Made Freedom a Bad Word, p. 19

*

Masha Lipman

Former Deputy Editor, Itogi magazine

The Demise of Gusinsky’s Media Empire, p. 20

*

Sergei Markov

Director, Institute for Political Studies, Moscow

Russian Media in a Revolutionary Period, p. 22

*

Manana Aslamazyan

Director, Internews Russia

Systemic Crisis in the Russian Media, p. 15

*

Emil Pain

Former Adviser to President Yeltsin

How Russia Reported the NTV Affair, p. 25

*

Chrystia Freeland

Deputy Editor, The Globe & Mail

The Origin of Gusinsky’s Media Empire, p. 16

*

Ivan Zassoursky

Department of Journalism, Moscow State University

Great Russia’ and the Internet, p. 28



Russia Watch No. 6, June 2001

Table of Contents

Russia’s Embattled Media, p. 1

Top News, p. 2

What the Polls say, p. 3

The Siege of NTV, p. 5

Media and Business, p. 7

Free Press and Democracy, p. 9

Media and Public Opinion, p. 10

Media and the Law, p. 11

Journalistic Professionalism and Ethics, p. 12

Media Independence in Comparison, p. 13

Assisting Russia’s Media, p. 13

Manana Aslamazyan: Systemic Crisis in the Russian Media, p. 15

Chrystia Freeland: The Origin of Gusinsky’s Media Empire, p. 16

Alfred Kokh: Gusinsky Made Freedom a Bad Word, p. 19

Masha Lipman: The Demise of Gusinsky’s Media Empire, p. 20

Sergei Markov: Russian Media in a Revolutionary Period, p. 22

Emil Pain: How Russia Reported the NTV Affair, p. 25

Ivan Zassoursky: ‘Great Russia’ and the Internet, p. 28
TOP NEWS

by David Rekhviashvili


Gazprom Chief Replaced

The board of directors of Gazprom, Russia’s gas monopoly, replaced Rem Vyakhirev, the company's old Soviet style executive who allegedly has been engaged in insider deals, with Deputy Energy Minister Alexei Miller, a close ally of Vladimir Putin. Mr. Vyakhirev was named chairman of Gazprom, a much-reduced role. Immediately after this reshuffle, the value of Gazprom’s shares on Russian capital market rose by 7 percent.


Electricity Monopoly Reform Plan Adopted

The Russian government has adopted the main provisions of a plan to restructure the country's electric power industry. The plan splits the electricity monopoly, Unified Energy Systems (UES), into competing generation and supply companies while creating a state-owned network company to operate the national power grid. The whole reform is expected to take from eight to ten years. The goal of the program is to gradually create a market for electric power and to increase opportunities for large-scale investments in the electricity industry.

T
2
he plan to reform UES has become an object of discord between powerful political and business interest groups. The restructuring plan approved after months of haggling and lobbying marked a victory of UES chief executive Anatoly Chubais and the team of young reformers headed by Economic Minister German Gref, but angered the coalition of regional governors, oil barons, and influential politicians within the Presidential Administration, including the President’s economic adviser, Andrei Illarionov. President Putin has defined the restructuring of Russia’s big monopolies—electricity, gas and railways—as a top priority of his economic reform program.
Judicial Reform Package Introduced

President Putin gave a go-ahead to a radical reform of the judiciary by introducing into the Duma the first four of a package of eleven reform bills. The bills transfer the right to issue arrest and search warrants from the prosecutor’s office to the courts, introduce a jury system to all regions of Russia (today only a handful of regions conduct jury trials), and expand the list of criminal cases to be considered by juries.

The Kremlin had introduced the same set of bills into the Duma in January 2001, but later recalled them unexpectedly, providing no official explanation. According to most commentators, the recall was due to strong opposition of the police and security structures, with the General Prosecutor’s office leading the charge. This time, President Putin has invested more effort in supporting the judicial reform package and it is expected that it will encounter no major difficulties in the Duma.
Putin Makes First Cabinet Reshuffle

A year almost to the day after his election as President of Russia, Vladimir Putin made his first big ministerial reshuffle. President Putin replaced Defense Minister Igor Sergeev, Interior Minister Vladimir Rushailo and the head of the Federal Tax Police Service Vyacheslav Soltaganov with his loyalists Secretary of the Security Council Sergei Ivanov, the head of the Unity faction in the Duma Boris Gryzlov and the First Deputy Secretary of the Security Council Mikhail Fradkov, respectively.

In making these changes in the government Putin established full control over the power-wielding ministries: the main power ministries are now headed by members of the so-called “St. Petersburg team,” who are personally faithful to Putin. Putin appears to have come up with a new system for appointing key cabinet ministers: instead of appointing lobbyist-minister, so-called “professionals” (officials with an extensive background working for these ministries), for the first time in recent Russian practice “political” ministers have been appointed. Some observers note that political appointees from the outside are not enmeshed in intra-departmental lobbying and thus are potentially capable of implementing intended reforms in the security agencies.
Liberal Economic Reform Plan Launched

The government introduced to the Duma a package of 26 priority bills aimed at launching a radical reform of the Russian economy; 15 of them are due to be considered by the Duma during the spring session—now extended through the middle of July; the remaining eleven will be considered in the fall.

The reform legislation is divided into three blocks: taxation, structural reforms and social policy. As for taxation changes, the Duma will consider bills on corporate profit tax law, tax payments for the use of natural resources, excise payments, and further reduction of the social tax rate. Among the bills aimed at economic restructuring, there is a package on debureaucratization and deregulation of the economy, bills on the privatization of state and municipal property, the Customs Code, and bills aimed at adjusting Russian legislation to World Trade Organization (WTO) standards. Changes in social policy will include reform of the pension system and a new Labor Code. The Duma has already adopted legislation reforming the banking sector and liberalizing currency transactions, passed a law on production-sharing agreements (PSAs), and ratified an international convention on combating money laundering.

Also, despite strong resistance from communist factions, the Duma passed a liberal Land Code in the first reading. For the first time in contemporary Russian history, this Code permits sales of land, with some significant restrictions regarding agricultural land. The law removes one of the most serious barriers to foreign investments: now investors can buy not only real estate, but also the land under it.


New Law on Political Parties Passed

The State Duma has passed a presidential bill on political parties in the second reading. It now awaits a third reading and approval by the upper house of parliament. The law exposes political parties to bureaucratic control and sets legal requirements that will lead to a considerable reduction in the number of parties able to participate in federal elections.

According to the bill, only political groups with a minimum of 10,000 registered members and with 45 regional organizations—each having at least 100 employees—can be qualified as federal political parties with the right to participate in Russian parliamentary elections. Only a handful of organizations currently meets these requirements.

The law also entitles political parties to state funding if they get no less than 3 percent of the vote in parliamentary elections and legalizes private donations to party budgets.


Union of Right Forces Holds Congress

The Union of Right Forces held a Congress, at which all nine founding member organizations of the Union merged into a unified liberal party based on individual membership. Boris Nemtsov was elected Chairman of the Political Council of the new party. Anatoly Chubais, Yegor Gaidar, Sergei Kirienko, Irina Khakamada and Boris Nemtsov were elected Co-Chairmen of the party.

The creation of a Union of Right Forces political party consolidated liberal reformers who are oriented toward maintaining dialogue with the President and his cabinet on issues related to economic reform, while remaining critical of the authorities’ policies on democracy and human rights.



What the Polls Say



Approval Ratings of Russian President, Prime Minister, Government, and Regional Leaders, June 2000-May 2001 (percent)

Approve:




June 2000

July

Aug.

Sept.

Nov.

Dec.

Jan. 2001

Feb. 2001

Mar. 2001

Apr. 2001

May 2001

President Putin

61

73

60

65

70

68

76

69

75

70

71

Prime Minister Kasyanov

45

49

42

45

47

43

47

45

49

41

45

Russian Gov’t

34

38

38

39

38

38

43

34

40

37

38

Governor of your region

47

53

53

49

52

50

57

55

59

53

46


Disapprove:




June 2000

July

Aug.

Sept.

Nov.

Dec.

Jan. 2001

Feb. 2001

Mar. 2001

Apr. 2001

May 2001

President Putin

26

17

30

27

22

23

18

21

19

24

22

Prime Minister Kasyanov

30

25

37

37

32

34

31

35

35

40

34

Russian Gov’t

47

42

49

50

46

48

44

50

47

49

46

Governor of your region

39

36

38

37

37

37

31

33

32

38

40

All-Russian Center for the Study of Public Opinion (VTsIOM) polls of 1600 respondents in 33 regions of Russia

3


RUSSIA’S EMBATTLED MEDIA (Continued from p. 1.) Critics charge that Gazprom control of NTV amounts to government control, no matter who heads the network.

If the Russian government ultimately succeeds in silencing NTV’s independent voice (as seems likely absent a private investor buying a controlling stake in the company), the media landscape in Russia will have changed significantly. The most popular networks whose programs reach the greatest percentage of Russian households will have fallen under government or pro-government control. For alternative views, Russian citizens will have to rely on regional channels, cable, less popular stations like TV-6 (see the broadcasting range of other TV stations in Table 2), and print media.

Despite the discouraging trend in television, announcement of the death of Russian free press would indeed be premature. Unlike Soviet times—or in China today—Russian citizens are not barred from publishing, distributing, or reading whatever they choose. Those who can afford it have ready access to an array of independent Russian, joint Russian-Western, and international newspapers and an increasing assortment of news and analysis web sites available on the Internet.
Freedom to Print, Freedom to Read
On the whole, print media are much freer than TV and radio—a fact that primarily reflects the underlying, inescapable, and most-often neglected economics of the press. Amid the furor over Gazprom’s seizure of NTV, two publications owned by Gusinsky—the daily Segodnya (circulation 50,000) and the weekly magazine Itogi (circulation 100,000)—were effectively shut down. Neither was financially viable without continuing subsidies. Segodnya was closed altogether; the entire editorial staff of Itogi was dismissed.

Times are tough for publications striving for independence, especially in the regions. The cost of production and distribution soared after prices were liberalized in the early 1990s. Many newspapers have by necessity elected to maintain their close relationships with local governments to benefit from subsidized paper, access to printing presses, and protection from rivals. Others have sought sponsorship from business tycoons, who have poured millions of dollars into loss-making newspapers to ensure a steady stream of favorable coverage.

The advertising market for the quality press has shrunk, since fewer and fewer Russians are buying daily newspapers. (Eighty-five percent of Russians get their news primarily from TV.) The weekly Argumenty i Fakty is able to subsist on a mix of advertising revenue, subscriptions, and newsstand sales, but, as the single most popular periodical in Russia, with a circulation of about three million, it has so far proved the exception to the rule.

G
4


iven such circumstances, why is the press freer than TV? There are at least three reasons. First, print is much cheaper than television. Second, compared to TV or even radio, which require certain minimum technological parameters to function, print media are relatively low-tech and therefore harder to suppress. Even during the height of Soviet repression, when the state enjoyed a monopoly on printing presses and commanded an army of censors, the authorities were unable to stamp out underground samizdat publishing. Third, in Russia, as in other mass consumer societies, the printed word has been devalued as electronic images have come to rule politics. Newspapers are freer to print what they choose because they are thought to have less impact on public opinion. Political battles are no longer waged in the pages of Izvestia and Pravda (which command two percent and one percent of Russian periodical readers, respectively); instead they are waged on the news programs and talk shows that are broadcast over the airwaves. The elite continue to rely on the daily press to track political intrigues, but elections are won and lost on television.
Rise of the Internet
“NTV has been seized. NTV.ru is free.” Those words appeared on NTV’s web site, NTV.ru, on the day the TV network was taken over by Gazprom-installed managers. Soon after Itogi’s publisher fired the magazine’s editorial board, the Lenta.ru news web site agreed to host an electronic version of the magazine entitled “We Are the Real Itogi.” Lenta.ru offered to host a Segodnya site as well, and the newspaper resumed publishing on the web. Such cases illustrate both the power of the Russian Internet and its loosely regulated state.

Despite several attempts by the Press Ministry, web sites have not been classified as means of communication, meaning they fall outside the Mass Media Law and state licensing requirements. Many observers look to the increase in Internet usage and proliferation of Russian-language news and commentary web sites as a democratizing force in Russia. Indeed, news and analysis web sites are gaining influence, especially as conduits of information among the political elite.

But freedom of the Internet cannot be taken for granted. Although start-up costs are low and the authorities do not have the means to control every new web site that appears, web publishing is nonetheless subject to many of the same economic and political constraints that more traditional print media face. Some of the most popular news sites have backing from powerful financial-industrial groups, such as Lukoil or Yukos, while others are controlled by influential ‘political technologists’ close to Putin. For instance, Kremlin spin doctor Gleb Pavlovsky’s Fund for Effective Politics (FEP) controls a growing Internet empire including SMI.ru, Vesti.ru, and the government-oriented Strana.ru, which is the only news site with regional affiliates in each of the seven federal macroregions. FEP’s web page boasts 50,000 daily visitors to its network of sites, and its Strana.ru has become standard reading in government offices.

In addition to concerns about financial and administrative dependence on powerful lobbyists and big business, media advocates rightly express concern about the FSB’s ability to monitor Internet activity. Based on a 1995 law, the System for Operative-Investigative Measures (SORM) allows Russian security services to intercept private email messages and track the identity of web site visitors. Unlike Western analogues, such as Britain’s Regulation of Investigatory Powers Act or the FBI’s Carnivore Internet surveillance software, SORM requires Russian Internet service providers (ISPs) to integrate surveillance equipment into their own systems, and to do so at their own expense. Those ISPs that refuse can lose their licenses to operate. FSB representatives claim that SORM will actually help develop the Russian Internet, by assisting investigators in cracking down on hackers illegally using other people’s passwords or credit card information on Russian web sites.

Despite fears about state or big business control over Russian Internet development, it is difficult to deny that the web has been a boon to Russian free speech. An estimated 3 million Internet users in Russia have access to web sites, chat rooms, and list-serves in which they can read (and in some cases write) whatever outrageous, incredible, or scandalous ‘news’ they choose. —Ben Dunlap





THE SIEGE OF NTV


O
Gazprom-Media’s Alfred Kokh asserts the case against NTV was economic, not political. See his article on page 19.
bservers trying to make sense of government-controlled Gazprom’s boardroom takeover of NTV must confront two competing explanations for NTV’s demise. One scenario says NTV’s downfall was its financial mismanagement. NTV and its parent company, Media-Most, took loans totaling over $1.5 billion, many guaranteed by Gazprom. NTV’s expenditures far exceeded revenues. The company fell behind in debt payments with no prospects for getting itself out of the hole. Gazprom became impatient and teamed up with a minority American shareholder to install new management at NTV. The second scenario: NTV was assaulted by a government intent on silencing critics and consolidating control over independent political forces. NTV criticized the government’s conduct of the war in Chechnya and ran a determined campaign against Putin and his supporters in the 1999 parliamentary and 2000 presidential elections. Government officials, and President Putin personally, took offense at Vladimir Gusinsky’s use of NTV as a political tool of the opposition. They saw Gusinsky’s actions as betrayal, especially since the government gave NTV to Gusinsky in 1993 and loaned him hundreds of millions of dollars thereafter.

F
5


ederal prosecutors and tax police have raided Media-Most offices more than thirty times in the past year. In May 2000, black-masked tax police stormed Media-Most headquarters in Moscow, holding staff at gunpoint while they searched the premises for evidence of tax evasion and fraud. In the course of their search, they also turned up sophisticated electronic surveillance equipment used by Media-Most’s security detail, headed by Filip Bobkov, the former head of the KGB department that persecuted Soviet refusniks and political dissidents, including Andrei Sakharov and Alexander Solzhenitsyn, and coordinated the vast network of informants who spied on their friends, colleagues, and neighbors. Bobkov and his team were allegedly using the equipment to spy on rival political and business groups.

NTV’s owner, Vladimir Gusinsky, was imprisoned on fraud charges in June 2000 but subsequently released after signing a secret (and illegal) agreement with the Minister of Press, Mikhail Lesin. In December 2000, Gusinsky was arrested in Spain on an international warrant issued by Russian prosecutors. He has since been released following an unsuccessful bid to extradite him to Russia.

In January 2001, CNN founder Ted Turner and financier George Soros (pictured) announced their interest in purchasing a majority stake in NTV. Gazprom-Media CEO Alfred Kokh said his company welcomes foreign ownership of NTV shares, while President Putin announced he was “not opposed” to the Turner-Soros deal. Secretary of State Colin Powell and U.S. Ambassador to Russia James Collins privately discussed the deal with Russian government officials on behalf of Turner and Soros. Following one meeting, a State Department official said, “We have always supported freedom of the press and seen it as a vital core of Russia’s new democracy.”

On April 3, Gazprom, joined by the Capital Group, used their combined 50.4 percent of shares to call an extraordinary meeting of NTV shareholders. Gazprom owned 46 percent of NTV, Gusinsky owned 49.6 percent, and the Capital Group, a California-based investment firm, owned the remaining 4.4 percent. (The ownership structure remains the same today.) At the meeting, shareholders ousted both Gusinsky and NTV political commentator Evgeny Kiselev from the television network’s board of directors, installing new members with close ties to the gas monopoly, and a new General Director, Boris Jordan (an American-born investment banker of Russian origin).

On April 4, a consortium of investors led by Ted Turner (pictured) was reported to be close to a deal with Gusinsky to purchase 30 percent of NTV. NTV continued broadcasting with its old management and most of its journalistic team in place until the early hours of April 14, when the new management team, accompanied by armed guards, entered NTV offices and seized control.

Kiselev announced the next day that he had taken a new job as general director of TV-6, the channel controlled by Boris Berezovsky broadcasting to about half of the Russian market. On May 14, he was formally elected General Director of TV-6. (TV-6’s previous managers were dismissed.) Out of 1200 NTV employees, about 10 percent have left, seeking work at TV-6 or elsewhere. Some of the most popular journalists and anchors have chosen to stay at the new Jordan-run NTV. In the aftermath of Kiselev’s departure, Turner’s consortium announced it was “re-evaluating our position in regard to NTV.”

In the week that followed, Media-Most’s Segodnya newspaper was closed. Its Itogi weekly news magazine (published in partnership with Newsweek), following a boardroom takeover by Gazprom and minority shareholder Dmitri Biryukov, fired its editorial board.

Boris Jordan has launched a PriceWaterhouseCoopers audit of NTV and announced he will seek strategic foreign investors later in the summer, once the company’s finances have been brought under control. He continues to insist that he will maintain complete independence from both Gazprom and the government on all editorial decisions.



Meanwhile, on May 30, the Gazprom board of directors (over half of whom were appointed by the government) elected a new chairman, Putin protégé Alexei Miller. Miller served as Putin’s deputy for five years in the St. Petersburg administration in the early 1990s. While tightening government control of Gazprom’s management may help push through proposed reforms of the gas monopoly, it is unlikely to increase the independence of Gazprom holdings like NTV. –Ben Dunlap






The NTV Drama: Cast of Characters

Vladimir Gusinsky


  • Founder of NTV.

  • Built his business empire beginning with Most Bank. Launched the national newspaper, Segodnya, in February 1993, with financial backing from Most Bank.

  • Created NTV Television Company and acquired rights to prime time broadcasting on channel 4 in October 1993.

  • Received full rights to broadcast on channel 4 following active support for President Yeltsin’s successful bid for reelection in 1996.

  • Relinquished positions at Most Group and Most Bank in 1997 to head up a new holding company, Media-Most. Group assets included newspapers, magazines, and radio and television stations.

  • Arrested in Spain in December 2000 for allegedly embezzling millions in Russian government property.


Evgeny Kiselev


  • NTV General Director under Vladimir Gusinsky and part owner of Media-Most.

  • Born in Moscow, 1956; graduated as a “historian-orientalist” from the Institute of Africa and Asia, where he studied Persian.

  • Worked as a translator with Soviet forces in Afghanistan in 1979; taught for four years at the KGB Higher School.

  • Worked for Radio Moscow’s Persian service in 1984, later moving into central television.

  • Provided ideological support via radio broadcasts for Soviet troops in Afghanistan in 1986. Applied for membership in the Communist Party in 1989, but did not end up joining.

  • Left Russian TV in 1991 for the state-run Ostankino network, saying RTV was too ideological and unprofessional.

  • Part of production team for “Vesti,” the first alternative news broadcast in Russia, in 1991.

  • Launched the news analysis program, “Itogi,” in 1993, with Oleg Dobrodeyev, NTV’s future general director. Took “Itogi” with him when he moved to NTV; the program became one of NTV’s top-rated programs.

  • Awarded the International Press Freedom Award in New York, in 1995; a year later, “Itogi” was named “Best Original Program” by the Academy of Russian Television.

  • Ousted as general director in a boardroom takeover on April 3 by NTV creditor Gazprom, which installed American Boris Jordan in his place.


Boris Jordan

  • General Director of NTV appointed by Gazprom.

  • Established career as investment banker, working for Credit-Suisse First Boston (CSFB), heading up its Moscow office until 1995.

  • Left CSFB to found Renaissance Capital, becoming one of Russia’s leading investors.

  • A key figure in setting up Russia’s fledgling stock market in the early 1990s; played a role in privatization deals of state assets.

  • Developed interest in media and telecommunications businesses through his investment and development company Sputnik Technology Ventures after other investments took a tumble in the Russian stock market crash of 1998.

  • His financial group Sputnik owns a Moscow radio station, Europa-Plus.


6

MEDIA AND BUSINESS


NTV under Vladimir Gusinsky’s control was a source of critical, professional reporting and a conduit for alternative views. But in many ways it was an unlikely role model for independent media. NTV was run with little regard for fiscal discipline, transparency or accepted accounting standards, although in that sense it is hardly alone among Russian media companies. One wonders whether NTV may have survived had it been better managed.

In a letter to the Financial Times soon after Gazprom’s April 3 takeover of NTV, Boris Jordan asserted that “NTV has no chance of surviving as an independent editorial voice free of influence from any shareholder unless its finances are brought under control.” With that claim Jordan raised a critical question for independent television in Russia: whether a nationally broadcasting TV network offering quality programming can survive without ‘oligarchic’ or state sponsorship.

Advertising revenues plummeted in 1998 when the August financial crash wiped out Russia’s advertising market. Revenues have crept back up toward pre-1998 levels in the last two years, with greater gains projected for 2001. But can advertising support CNN-style news programming to provide Russian citizens with the information they need to participate in their country’s electoral system?

Some specialists argue it can, provided companies are run legally and transparently, but note that important changes must take place in order for commercial TV to flourish in Russia. Among many solutions advocated, two that are commonly cited are: 1) legislation to make advertising tax deductible, and 2) legislation to remove the current 40 percent cap on advertising content. In a letter to the Washington Post, Boris Berezovsky recently suggested creating an international fund to buy advertising for non-profit organizations in Russian regional media—boosting ad revenues and promoting civil society at the same time (see an excerpt from Berezovsky’s proposal in the box below).

An alternative to subsistence on advertising revenues may be sponsorship by foreign investors. In that case, must investors be prepared to fund a loss-making enterprise? Ted Turner and George Soros, who have each donated over a billion dollars to various international causes, may be such investors. But absent philanthropic altruism or the expectation of high profits, it is difficult to imagine foreign businesses buying up shares of Russian media outlets to fund Russians’ access to quality information. –Ben Dunlap

Boris Berezovsky: “The cost of making all local press in Russia financially sustainable is only about $ 30 million a year. My proposal is to give this money to nongovernmental civic groups in the regions to pay for public-interest advertising. Such an approach would provide resources to independent local media and boost civil society in Russia. And the United States would be able to claim real success in helping free speech and democracy in Russia.” (From Boris Berezovsky, “A Key to Free Speech in Russia,” Letters to the Editor, Washington Post, June 6, 2001.)






Table 1: Russia’s Advertising Expenditures






Total

Print

TV

Radio

Outdoor

1999

$759 million

$97 million

$583 million

$41 million

$37 million

2001*

$1.5 billion

$160 million

$1.2 billion

$64 million

$64 million

2003*

$2.2 billion

$210 million

$1.8 billion

$81 million

$86 million

Zenith Media, Ltd., published in The Myers International Media Report, April 11, 2001

*Projected


Table 2: Accessibility of Leading Television Networks in Russia (% population)

ORT RTR NTV TV-6 TV-C Kultura STS TNT Ren-TV AST MTV Mus-TV


ORT

98

RTR

95

NTV

72

TV-6

58

TV-Center

39

Kultura

36

STS

35

TNT

32

Ren-TV

27

AST

13

MTV

12

Mus-TV

11



F
7


rom Sredsvta massovoi informatsii Rossii, published in Nordenstreng, Vartanova and Zassoursky, eds., Russian Media Challenge, 2001.

Table 3: Preferred TV Channels, All Russia December 1999

(percent audience share)

ORT

41

NTV

25

RTR

13

TV-6

4

Others

11

No Opinion

6

From Sredsvta massovoi informatsii Rossii, published in Nordenstreng, Vartanova and Zassoursky, eds., Russian Media Challenge, 2001.
Table 4: Preferred TV Channels for News and Information, Moscow Residents, April 2001

NTV

38%

ORT

15%

RTR

10%

TV-Center

3%

Other (including TV-6)

2%

All equally

25%

I don’t watch news

6%

I don’t know

1%

All-Russian Center for the Study of Public Opinion, poll of 500 Moscow residents, April 7-8, 2001
What TV channel do you prefer to watch for news and information?

All-Russian Center for the Study of Public Opinion, poll of 500 Moscow residents, April 7-8, 2001


Table 5: Share of Advertising Revenue among Leading TV Networks

Q1, 2000



8

Table 6: Most Popular Newspapers



(Percentage of respondents who read regularly)




1994

1995

1996

1997

1998

1999

2000

Argumenty i Fakty

19

16

20

25

24

20

21

Izvestia

3

3

3

5

2

2

2

Kommersant

2

1

1

1

1

1

1

Komsomolskaya Pravda

9

9

11

14

16

12

12

Pravda

1

1

1

2

1

1

1

Rossiiskaya Gazeta

3

2

3

4

2

2

1

Sovershenno Sekretno

-

-

-

7

7

6

9

Sovetskaya Rossiia

1

1

2

2

1

2

1

SPID-Info

-

-

-

20

18

14

15

Sport-Express

-

-

-

2

3

2

2

Trud

5

4

6

5

4

3

4

Local Dailies

-

-

-

20

21

12

14

Local Weeklies

-

-

-

22

33

24

20

Local Entertainment, Advertising Newspapers

-

-

-

17

18

16

19

I don’t read newspapers

28

40

39

27

29

31

30

Source: All-Russian Center for the Study of Public Opinion (VTsIOM) data.




FREE PRESS AND DEMOCRACY


The First Amendment of the U.S. Constitution guarantees that “Congress shall make no law… abridging the freedom of speech, or of the press….” It does not specify how citizens, groups, or businesses will create enterprises to inform the American public. Nor does it guarantee quality of the press.

The ‘public interest’ role that media play is not always profitable, as recent American experience shows. In the United States, commercialization brings concern that serious and in-depth reporting of government, public policy issues and international affairs has been increasingly displaced by ‘infotainment,’ with more and more human-interest stories about popular celebrities, consumer affairs, and scandal. CBS News anchor Dan Rather has lamented this trend in American news reporting: “They’ve got us putting more fuzz and wuzz on the air, cop-shop stuff, so as to compete not with other news programs, but with entertainment programs (including those posing as news programs) for dead bodies, mayhem, and lurid tales…. We have gone so far down the infotainment trail that we’ll be a long time getting back to where we started—if ever.”

The ‘free press’ that thrived in the early Yeltsin years (as exemplified by aggressive, critical journalism during the 1994-1996 Chechen war) meant mostly government permissiveness: despite instances of favoritism, the Yeltsin government placed few restrictions on what journalists could say or print. Despite its public statements in support of a free press, the Putin government has placed greater emphasis on the responsibility of journalists—meaning accountability to the authorities (and a duty to their country—meaning to the state). As universal values such as civil liberties and human rights have been overtaken by patriotic values and public demands for ‘law and order,’ journalists have found themselves increasingly constrained by the need to appear supportive of their government. –Ben Dunlap


9


Guarantees of Press Freedoms


U.N. Declaration of Human Rights

Article 19

Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive, and impart information and ideas through any media and regardless of frontiers.
Russian Constitution

Section 1, Chapter 2

Article 29


  1. Everyone shall have the right to freedom of thought and speech.

  2. Propaganda or campaigning inciting social, racial, national or religious hatred and strife is impermissible. The propaganda of social, racial, national, religious, or language superiority is forbidden.

  3. No one may be coerced into expressing one’s views and convictions or into renouncing them.

  4. Everyone shall have the right to seek, get, transfer, produce and disseminate information by any lawful means. A list of information constituting state secrets shall be established by federal law.

  5. The freedom of mass media shall be guaranteed. Censorship shall be prohibited.


President Putin on Freedom of Press:

“As to the right to express one’s opinion, freedom of press and so on, this, of course must be ensured. But this can be ensured only if one condition is observed—the creation of economic conditions acceptable for the freedom of press, equal starting conditions for all.” April 10, 2001

“A free press is the most important guarantor of the irreversibility of our country’s democratic course.” June 12, 2001

“I am very confident that without a free media, we cannot have a normal democratic society.” June 18, 2001


President Putin on Democracy:

“Authoritarianism means disregard for laws. Democracy means fulfillment of laws. If we abide by a law that was legitimately adopted by a body of government—everything will be in order with democracy in our country. If we do not, then the law is replaced by willful decisions of concrete people. This is bad, this means authoritarianism.” December 26, 2000






MEDIA AND PUBLIC OPINION
How would you feel if shares of NTV were sold to foreigners (Ted Turner, George Soros, or the European Bank for Reconstruction and Development)?



All-Russian Center for the Study of Public Opinion, poll of 1600, February 1-3, 2001
Are you concerned by attempts of state structures to establish control over the activities of NTV?

Very concerned/somewhat concerned

36%

Not at all concerned

44%

I do not think the state is trying to establish control over NTV

13%

I don’t know

7%

All-Russian Center for the Study of Public Opinion, poll of 1600, March 24-27, 2001


10



Some people think that the Russian authorities are attacking the media and infringing upon freedom of speech; others think that the authorities are not at all threatening independent media or infringing upon free speech. Which of these views do you consider correct?

The authorities are attacking the media and infringing upon freedom of speech

43%

The authorities are not threatening independent media or infringing upon free speech

41%

I don’t know

16%

All-Russian Center for the Study of Public Opinion, poll of 500 Moscow residents, April 7-8, 2001
To what extent do you trust the news and analytical programs on the following channels?




ORT

RTR

NTV

Completely trust/mostly trust

62%

65%

73%

Mostly do not trust/do not trust at all

32%

28%

20%

I don’t know

6%

7%

7%

All-Russian Center for the Study of Public Opinion, poll of 500 Moscow residents, April 7-8, 2001
Who, in your view, is the main initiator of the scandal surrounding NTV?

Gusinsky

25%

Kiselev

11%

Kokh, Jordan

10%

Putin and his team

9%

I don’t know

45%

Vladimir Gusinsky is the owner of a 46.9% stake in NTV; Evgeny Kiselev was, until April 3, 2001, General Director of NTV; Alfred Kokh is General Director of Gazprom-Media, the branch of Gazprom that owns 46% of NTV and voted Gusinsky and Kiselev off the board of directors on April 3; Boris Jordan is the new General Director of NTV elected on April 3.

All-Russian Center for the Study of Public Opinion, poll of 1600, April 20-23, 2001


What, in your view, was the main cause of the scandal surrounding NTV?

Division of property, financial problems

46%

Disproportional ambitions of Kiselev and his supporters

11%

Efforts by the authorities to rid themselves of criticism from the channel

20%

I don’t know

23%

All-Russian Center for the Study of Public Opinion, poll of 1600, April 20-23, 2001
If Kiselev and his team go to work for TV-6, will you watch news and analytical programs on TV-6?

Yes, regularly

11%

From time to time

23%

Rarely

12%

Practically never

8%

I do not have the opportunity to watch TV-6

41%

I don’t know

6%

All-Russian Center for the Study of Public Opinion, poll of 1600, April 20-23, 2001
MEDIA AND THE LAW

T
11
he 1991 Law on Mass Media (with subsequent amendments) is relatively liberal and provides journalists with legal protections of the press freedoms enshrined in the Constitution. In contrast, lack of specific legislation on television and radio broadcasting places broad powers in the hands of the Press Ministry, and Press Minister Mikhail Lesin personally, to decide the fate of media outlets through administrative measures, such as the licensing process for television and radio stations.

In a recent development, Russian lawmakers have moved to limit foreign ownership of Russian media, apparently in response to news that Ted Turner and George Soros were pursuing a 30 percent stake in NTV. The new law, which restricts foreign ownership of nationally broadcasting TV stations (those reaching more than half of Russia’s 89 regions) to less than 50 percent, has been passed in its second reading by the Duma. The TV stations affected include ORT, RTR, NTV, TV-6, and TNT. President Putin has said he does not think foreigners should own majority stakes in Russian media companies, but opposes legal limits on foreign ownership.

Supporters of the new law cite the 1933 U.S. federal law barring foreign citizens from owning more than 25 percent in American broadcasting companies. —Ben Dunlap







JOURNALISTIC PROFESSIONALISM AND ETHICS


In 1992, when SDI held its first conference in Moscow on the free press and journalistic professionalism and ethics, Russian participants identified key problems facing practitioners of their profession, including: severe economic difficulties and the temptation to sacrifice journalistic impartiality for financial gain; infighting among rival media organizations; and lack of respect for the law.

Unfortunately, many of the same problems exist today. American photojournalist Edward Opp, currently chief of photography at the Russian daily Kommersant, acknowledged in a recent Harvard seminar that there are “completely different professional and ethical standards” for Western and Russian journalists. Some media watchdog groups hope that joint ventures with Western news organizations, such as the Wall Street Journal-Financial Times partnership with the Russian weekly Vedomosti, or U.S. News & World Report’s partnership with Versiya will help raise professional standards among Russian journalists. Others are less sanguine about journalists learning from each other. Opp notes that, although he holds himself to the highest journalistic standards he learned in the West, he is powerless to change the system around him.

Ben Dunlap








Rating Russia’s Press Freedoms

Freedom House (www.freedomhouse.org)

Press Freedom Survey 2001

Rating: 60; Partly Free (free: 0-30; partly free: 31-60; not free: 61-100)

“Independent media in Russia faced an onslaught of harassment, including prosecution, threats, and physical assaults, particularly for reporting on corruption or the war in Chechnya.”

Laws that influence Political pressure on Economic influence on Repressive actions (0-5)

Media content (0-15) media content (0-15) media content (0-15)

Broadcast 7 10 8 5

Print 7 8 10 5

(The lower the number, the more free the media.)


Committee to Protect Journalists (www.cpj.org)

Attacks on the Press in 2000

“The ascendancy of President Vladimir Putin brought an alarming assault on press freedom in Russia last year. Under the new president, the Kremlin imposed censorship in Chechnya, orchestrated legal cases against powerful media barons, and granted sweeping powers of surveillance to the security services.”

Ten Worst Enemies of the Press, 2001’

The Committee to Protect Journalists named Russian President Vladimir Putin one of the ‘Ten Worst Enemies of the Press for 2001,’ citing Putin’s offenses against press freedoms. The other nine ‘Worst Enemies of the Press’ include: Ayatollah Ali Khamenei, Supreme Leader of the Islamic Republic of Iran; Charles Taylor, President of Liberia; Jiang Zemin, President of The People’s Republic of China; Robert Mugabe, President of Zimbabwe; Carlos Castaño, Leader of The United Self Defense Forces of Colombia (AUC); Leonid Kuchma, President of Ukraine; Fidel Castro, President of Cuba; Zine al-Abdine Ben Ali, President of Tunisia; and Mahathir Mohamad, Prime Minister of Malaysia.


International Press Institute (www.freemedia.at)

The World Press Freedom Review 2000

“Putin’s first year in office has indeed revealed ambiguous tendencies on his part, especially in his dealings with the media. IPI pointed this fact out by placing Russia on the “IPI Watch List”, a mechanism designed to detect and monitor regressive tendencies in countries around the world. Among the issues of concern that have kept Russia on the “IPI Watch List” were the government’s introduction of a new “Doctrine of the Information Security of the Russian Federation” and the apparent political harassment of the biggest independent media company, Media-Most.”


12



MEDIA INDEPENDENCE IN COMPARISON

The Russian media are deeply troubled, but the problems they face are by no means unique. Here is a brief look at events in three European countries—one a member of the European Union, two of them aspiring members, all of them members of NATO.
Turkey

Turkey recently drafted a law requiring website operators to submit all documents to a prosecutor and a governor’s office before posting them on the Internet. If passed, the law will strengthen censorship of the Internet for which Turkey has already been criticized. Turkish authorities have consistently suppressed, discouraged and even prosecuted journalists who criticize the military or speak too freely on the plight of Turkey’s Kurdish minority.



Czech Republic

In December in the Czech Republic, journalists at the state-run Czech TV barricaded themselves in the station in response to the appointment of Jiri Hodac as their new director. Hodac was seen as a protégé of Prime Minister Vaclav Klaus, who has made contemptuous comments about the importance of a free press. Indeed, Hodac was appointed by a Parliament-controlled board; Klaus is the leader of the lower house of Parliament. Determined and ultimately successful opposition to Hodac’s appointment (including 100,000 protesters in Wenceslas Square supported by President Vaclav Havel) revealed the depth of the commitment to freedom of the press among the Czech People.

Italy

In Italy, the election of Silvio Berlusconi as Prime Minister in May means that the head of the Italian government will own the country’s three largest private television networks. Berlusconi is also on trial for bribery and corruption and being investigated for ties to the Mafia. In an editorial published before the elections The Economist asserted: “In any normal country the voters—and probably the law—would not have given Mr. Berlusconi his chance at the polls without first obliging him to divest himself of many wide-reaching assets…. If he wins again on May 13th, he will control a good 90 percent of all national television broadcasting. He has made not the slightest effort to resolve this clear conflict.”

David Pass







ASSISTING RUSSIA’S MEDIA

Most media assistance organizations can be divided into three main types:

  1. Advocacy. These track cases of censorship and repression against journalists and publicize them, sending protest letters to governments and publishing reports. Some provide legal assistance. An example is the U.S.-based Committee to Protect Journalists.

  2. Associations. These unite journalists in one country or around the world to provide moral and material support, engage in training, and provide a forum for journalists to talk to each other. Examples include the International Federation of Journalists, based in Brussels, and the Russian Union of Journalists within Russia.

  3. Media watch. These study media coverage and monitor links between media and politics. An example is the German-based European Media Institute, which has monitored media coverage of elections in Russia.

Many media groups play a combination of the roles above. In Russia, the Glasnost Defense Foundation is a leading advocate for freedom of press, but it also provides legal assistance and ‘humanitarian aid’ for journalists and their families, and sponsors conferences and workshops for training and debate. Globally, the International Press Institute combines advocacy with its role as a “journalists’ club.”


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