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State Dept. Decries Russian Raid

BY Admin  February 8, 2001 at 12:00 PM EDT

The Russian government yesterday entered Image Bank and, according to Russian media reports, seized information about accounts held by businesses and individuals.

Both the bank and Russia’s independent NTV television are owned by media magnate Gusinsky — a figure who has been under fire from the Russian government for months for coverage that has been critical of President Vladimir Putin.

In a statement today, the U.S. State Department said Russia’s actions fly in the face of media freedom.

“We see these steps yesterday as part of the continued attempts to use political and economic measures to intimidate the independent media,” State Dept. spokesman Richard Boucher told reporters.

Boucher said Secretary of State Colin Powell is likely to discuss media freedom when he meets with his Russian counterpart, although no date for that meeting has been announced.

Yesterday’s raid was the 29th government operation involving companies linked to Gusinsky and his Media-Most company since Boris Yeltsin resigned and Vladimir Putin took power on Dec. 31, 1999.

An economic and political battle

The 48-year-old Gusinsky has been in self-imposed exile since a warrant for his arrest was issued in November. He was arrested last month in Spain and a legal battle over whether to extradite him to Russia to face fraud charges is still raging there.

Russian prosecutors allege the media mogul misrepresented the assets of his company when he accepted loans of more than $300 million guaranteed by Russia’s natural gas monopoly, Gazprom. They say his companies were legally bankrupt at the time.

A settlement reached by the two companies in December stripped Gusinsky of his controlling stake in NTV. Media-Most holds 49.5 percent of NTV’s shares, but that includes 19 percent pledged to Gazprom as collateral on loans coming due this year. The gas company holds 46 percent of NTV’s shares. If Gazprom were to collect on its debts, the network would fall under government control.

CNN founder Ted Turner and international financier George Soros have offered to buy a stake in the company large enough to prevent a government takeover. Turner has asked Putin for reassurance the state would not interfere with NTV.

Gusinsky’s continuing troubles

Gusinsky says the Kremlin is using the debt dispute as an excuse to punish him for his media outlets’ harsh criticism of the Russian government.

Guzinsky was jailed for four days in June on embezzlement charges. Less than a month later, Russian authorities raided Media-Most’s offices, seizing financial and personnel files.

In the early 1990s, Gusinsky had used his ties to the Russian government to make millions in privatization deals. But after he fell out of favor with the Kremlin last year, his media outlets have run exposes on alleged government corruption.