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Remote Control - Takeover Of Russia's NTV

Aired April 17, 2001 - 17:00:00   ET


JONATHAN MANN, INSIGHT (voice-over): Changing the channel. A state company seizes control of Russia's only nation-wide independent television network. The Russian president says he had nothing to do with it.

(on camera): Hello, and welcome.

Things are going Vladimir Putin's way. The Russian president enjoys so much support among lawmakers in the Duma that parties are merging and linking up to support him more closely. The opposition is weak, and most of the media either belong to the government or to its allies.

The single most important exception, NTV. NTV is an independent TV network best known for hard-hitting newscasts and the relentlessly biting puppet show that is said to have particularly annoyed the president.

Now, NTV has been seized by new owners, acting on behalf of a powerful state company. NTV journalists say the Kremlin has simply gotten tired of their criticisms, and Tuesday a newspaper and a magazine associated with NTV also seemed singled out. Publication of the Segodnya newspaper was suspended, and the staff of Itogi magazine was barred from its offices. Both of their editors were fired.

On our program today - remote control. Our Moscow bureau chief Jill Dougherty has this look.


JILL DOUGHERTY, CNN CORRESPONDENT (voice-over): If you turn on the television in Russia these days, you can still see NTV - news, entertainment shows, advertisements. But the essence of NTV changed at 3:00 a.m. last Saturday when a new management team, accompanied by security guards, arrived at the station.

The journalists were forced to choose sides - work with the new managers or resign. Most of the journalists and commentators who created NTV's editorial programming walked out.

UNIDENTIFIED MALE (through translator): We are just journalists. We don't care about their business problems. They are just spitting on us.

DOUGHERTY: An 11-day protest movement that featured two large public rallies was over.

(on camera): Supporters of those NTV journalists depict this as a fight over freedom of expression. The new management claims it's just business. NTV owes its creditor almost $300 million, they say, and it won't pay it back. But like most things in Russia today, this is not a black and white issue, and its origins go back seven years.

(voice-over): In January 1994, when NTV first began broadcasting, Boris Yeltsin was in the Kremlin. The network, started by Vladimir Gusinsky, one of Russia's so-called oligarchs, was clearly on Yeltsin's side.

But later, its critical reporting of the war in Chechnya irritated the government. In 1996, during the presidential campaign, Boris Yeltsin was in the fight of his political life. Communist Party leader Gennady Zuganov looked like a winner. Gusinsky and NTV joined forces with the president. Top NTV official Igor Malashenko joined Yeltsin's campaign staff.

As one journalist later said, it was a deal with the devil. But thanks to the Kremlin, Gusinsky's network went national. The Kremlin arranged loans for NTV from Russia's government-controlled gas monopoly Gazprom.

Gusinsky used NTV as a weapon in his war with other oligarchs. At the same time, the network continued its critical stance toward the government. NTV attracted a new kind of journalist for Russia - aggressive and not afraid to speak their minds. Unlike state-controlled television, it showed alternative views of events.

Satirical programs like "Kukli" went after government officials with a vengeance. Ratings soared. But in the 2000 presidential campaign, Vladimir Gusinsky failed to back the man who won, Vladimir Putin. And Mr. Putin, says one leading journalist, never forgot it.

VLADIMIR POZNER, RUSSIAN JOURNALIST: The basis of all of this is that personal more than dislike, perhaps rage that is still there and the desire to destroy Gusinsky, get him out of the picture.

DOUGHERTY: May 11 of last year, armed tax police raided NTV's parent company. The first of several raids on Vladimir Gusinsky's empire. He eventually was imprisoned, then released. He fled to his home in Spain, where he now awaits a decision on extradition back to Moscow.

When Vladimir Putin assumed power, the Kremlin ordered Gazprom to demand NTV pay back its loans. Two weeks ago, in a boardroom coup, Gazprom replaced NTV's management.

YEVGENY KISELYOV, FORMER NTV GENERAL DIRECTOR: I have no doubt about it. Mr. Putin, he is in charge of the whole operation. I don't know what is the code name for their operation, but the ultimate goal of their operation is to take over NTV, to take editorial independence from NTV.

DOUGHERTY: The new NTV head scoffs at that.

BORIS JORDAN, NEW NTV GENERAL DIRECTOR: This company is bankrupt, and only the good will of existing shareholders and creditors has kept this company alive. And hiding yourself under a shield of freedom of the speech is not the case.

DOUGHERTY: As part of their deal, Gusinsky and his creditor, Gazprom, were to look for an international investor to buy a stake in NTV, and early this year, CNN founder Ted Turner, along with a team of investors, began negotiations. He struck a deal with Gusinsky to buy his shares but failed to complete the other half of the deal with Gazprom. Now the takeover of NTV and the dispersal of its journalists has all but killed Turner's interest.

This past Saturday, the old NTV was shut down, a new Gazprom- controlled NTV took its place. But can it be the same?

JESSICA MATTHEWS, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: What you're left with is pretend free press, and that gives you a pretend democracy. And since there are no real political parties here, television becomes all the more important, and it's the only way for these independent voices to get heard.

DOUGHERTY: That same day, most of the old NTV journalists headed across the street to an affiliate cable station and began a kind of NTV in exile. With the old NTV gone, Russia loses something -- a network that never quite became an unimpeachable source of truth, but one that did offer people in Russia a different viewpoint.

Jill Dougherty, CNN, Moscow.


MANN: We have to take a break. When we come back - the anchor and the investor. NTV's outgoing and incoming directors explain what's happened. Stay with us.


MANN (voice-over): When the journalists of NTV staged a sit-in and then when several of them resigned, they broadcast their grievances nationwide. Demonstrations in Moscow and St. Petersburg drew crowds. But a new poll from Russia's Public Opinion Foundation found only about half of the respondents were troubled by events at NTV.

Overall, 47 percent think freedom of speech is endangered in Russia, no matter what happens to NTV.

(on camera): Welcome back.

NTV is no ordinary business, and it didn't change hands in an ordinary way. Just a short time ago, we got back in touch with someone we saw earlier in Jill Dougherty's report, former NTV general director Yevgeny Kiselyov. He said NTV's finances were not at the heart of the problem, judging by the government's treatment of the station's financial problems since May of 2000.


KISELYOV: That was the actual start of an outright war of the government against the only independent television station broadcast nationally in this country. Look, federal security service was involved. Tax police was involved. Internal revenue service was involved. Prosecutor general's office was involved.

Ministry of television, press and information was involved. Look, if it was a pure financial matter, a pure financial dispute between Media- Most, one shareholder of NTV, and Gazprom, another shareholder of NTV, why all these government agencies were involved and all their actions were, for some reason, very well coordinated.

There is only one power in this country that can coordinate the effort of all those different government agencies, law enforcement agencies and security services - the Kremlin. The president's administration. This is the only answer that can make a plausible explanation to all that.

MANN: Is the simplest way to see the history of NTV as a short political story? The Kremlin saw it to its advantage to have an independent television station that it could create or at least profit from, and.

KISELYOV: I can't hear you.

MANN: .when the Kremlin changed hands, when there was a new president, it changed it's mind and now NTV as an independent television station is gone for the same kinds of political reasons that it was created.

KISELYOV: I can tell you only one thing. All what was done to NTV by the government, by the government-controlled gas-producing giant Gazprom, which took over NTV in a very hostile way was politically motivated from the very start. And there is only one explanation. The new president of Russia, Mr. Vladimir Putin, he does not believe in free press and the independence of the media in the whole sense of that word or in the sense you in the West understand the freedom of the press and the freedom of expression, the freedom of media.

He can publicly say all the correct words about his adherence to the basic human rights and to the principle of freedom of speech, freedom of information, freedom of media. But he has limits to it. He believes in certain limits.

And as far as I understand this politician, he supports the idea of the free press, of the free media only when it serves his political goals. The moment the press starts to interfere with his immediate and long-term political goals, he starts to see those media criticizing him as his adversaries.


MANN: Outgoing director Yevgeny Kiselyov.

The incoming management has a different vision of what's happened and why. Boris Jordan, the new director of NTV, also joined us a short time ago.


BORIS JORDAN, DIRECTOR, NTV: I think one needs to remember that Gazprom is actually only 38 percent owned by the state. The rest of the company is actually owned by private individuals and a very wide dispersed shareholder base of Russian citizens throughout the country.

Yes, the government still has influence over Gazprom because it is a monopoly in its field. But it is by no means a government company. It is a privately owned company.

The decision to elect a new board and to bring me in as CEO of the company, however, was not made by Gazprom because Gazprom only owns 46 percent of the company. It was made by a combination of Gazprom and Capital Group, which is a U.S. mutual fund who has been an investor in this company for over a year and a half now, who I think also has been a company which has not seen the financial statements, has seen the assets of this company stripped out - the brand name, the library and other assets that were taken out of the company, which has obviously brought great concern, not only to Gazprom as a shareholder, but also to Capital.

MANN: Whose decision was it to seize the offices and to bar some journalists from returning?

JORDAN: Again, no one was barred. On the contrary, all the journalists were allowed in. Everybody came into the company. I was myself at the company at 7:00 in the morning. I met with all the journalists, many of whom today are actually coming back.

The decision was made on late Friday evening. It was actually made by myself as the acting chief executive officer. The reason was that we had received word at approximately 10:30 in the evening that the library which is the basically the backdrop and the key aspect of the news services of NTV was being taken out of the building.

Also, that the wiring was being rerouted to translate the signal onto two other channels - TV6 and TNT. And also that one of the key programs was being sold to TV6. And as you know, a lot of these things actually came true the following morning. The station was rerouted to TNT and there were contracts signed to move employees to TV6, which is, as you know, a station controlled by Boris Berezovsky.

MANN: All of this having been said, there is an odd coincidence. First, it's NTV, then it's Itogi and also Segodnya, a newspaper that's now essentially been closed down. Whatever the incidences at NTV, it seems that someone is simply trying to close down the independent and critical voices within Media-Most.

JORDAN: Again, I can't tell you about the Sevodnya or the Itogi situation because I have nothing to do with them. I can only tell you one thing, Jonathan. This is a company which will go down in history, as we reveal the audits and the financial statements, of a situation that will make the Maxwell collapse look very transparent.

Media-Most is a company which borrowed $941 million from Gazprom, $130 million from Sbere (ph) Bank, a government-owned back, $140 million from the ministry of finance from the Russian Federation, $230 million from the government of Moscow. There is one thing that's common in all of these borrowings, except the Gazprom borrowing, that is that all of these borrowings were made from the state.

To speak of independence that NTV or Media-Most were anything but an arm of the government that was subsidized by the government is incorrect. This company was totally dependent on the state. It received its financing from the state. Today, NTV, the company that I'm rebuilding, where journalists are returning as we speak - 10 a day - I think by Monday, we'll have 50 percent of those that left will have returned to the company. We are now building a truly independent TV station.

MANN: On that note, Boris Jordan, general director of NTV, we thank you so much for being with us.


In a moment, the architect of Soviet Glasnost with words for Russia's current leader. A conversation with Mikhail Gorbachev, when INSIGHT returns.


MIKHAIL GORBACHEV, FMR. SOVIET PRESIDENT (through translator): This is a time when the president of Russia, as the guarantor of the constitution, as the guarantor of the principles of the constitution, should take a stand.



MANN (voice-over): Angry journalists at NTV have found a high-profile advocate - Mikhail Gorbachev. The former Soviet president was recently named the head of the public advisory council for NTV. Gorbachev has become something of an adviser to President Putin as well, moving between the Kremlin and its critics.

(on camera): Welcome back.

Mikhail Gorbachev travels widely now, promoting disarmament and environmentalism. In his own country, he was eclipsed for many years by a younger generation of leaders. But now, he's back in the public eye, in part because of NTV and his outspoken defense of its independence.

We spoke to him Monday here in Atlanta.


GORBACHEV (through translator): This is a time when the president of Russia, as the guarantor of the constitution, as the guarantor of the principles of the constitution, should take a stand. I believe this would be right. This would be the right thing to do. And I think that the coming days will show.

MANN: Do you expect that we will hear something more, something dramatic from President Putin?

GORBACHEV (through translator): I don't think that he will do anything dramatic. But I believe the fact that he said that he shared the view of the journalists that this is a matter that should be considered by the courts that the supreme court should pronounce on the decisions taken by the lower courts, I believe this now should happen. This must happen.

And it was moving in that direction. They were expecting a decision, a new consideration of the situation by the courts at the end of April, early May. And then suddenly, on the day preceding Easter, on a very special day, these people acted as aggressors. They acted, I believe, really in a sacrilegious way. They removed the security guards. They brought their own thugs to the station, and they took over.

I think that alone - for that alone, they should be kicked out, of course, in a legal way.

MANN: How much is this an indication of something broader in Russia? A very strong president, a weakened parliament, a weakened opposition -- to what extent are we seeing Mr. Putin take much, much more power and eliminate the people who are in his way?

GORBACHEV (through translator): I'll give you a broader answer to this question. I believe that in the West and here in the United States and also in Europe, there is not enough understanding of the Russian situation and of the context in which the new president of Russia is acting.

I believe that sometimes there is a rush to judgment and to far- reaching conclusions about Putin. I believe that our friends abroad, and I call them friends, I believe that they are mistaken. I believe that they are in error, and let me explain why I think so.

They do not see that Putin became the president in a country that was in a state of total chaos. And that affected everything - the federation, the courts, the parliament, the social situation, the army, everything. And that was a very dangerous situation. And therefore, he needed to do something about that situation based on the mandate from the people or the support of the people.

And given that he did not have his own team, given that this really was so unexpected and he could not create a team overnight, that explains certain things that happened and certain errors and blunders that he made. Nevertheless, I talked to him several times, and from our discussions, from our exchanges, I drew the conclusion that he will continue with the democratic process in Russia that he wants to build a legal order that is open to cooperation and will work for cooperation between our country and Europe, the United States and neighboring countries.

What is more, I can tell you that there is some interference. Some people are standing in his way. There are some strong clans with vested interests, and they understand that if you were to act in accordance with the mandate in the Russian people who gave him the mandate in the first round of the elections, that would definitely be against those vested interests and against the interests of those plans.

So this is a fierce struggle, and many people in the West do not fully understand that. Of course, he has not yet fully succeeded. But the problem is as I've described. He is not a bloody-thirsty dictator. He is not a future dictator. It would be wrong to see him in that way. He is trying to stabilize the situation and to create prerequisites for the continuation of the democratic process.

So my position is that we need to support him, and it's really amazing the more people criticize Putin, the more the population of Russia, the people of Russia support him. Whereas when he was elected, he had the support of a little more than 50 percent of the people, now polls indicate that 60, 70, sometimes 80 percent of the people support him.

So this is the complexity of the situation. But I believe that what is happening with NTV has split public opinion. There are some people who are saying everything is right. The Gusinskys and Berezovskys, they meddled in the affairs of the government. They would like to give orders to others, and that Putin is right to cut them down to size.

So the whole thing is very complicated. Let us not oversimplify it. And I am someone who knows the burden of the presidency, particularly at such a critical moment, at the moment of crisis. I know that we cannot demand - place demands, the same demands on the president of Russia as we are placing on presidents of normal, stable countries where all institutions are operating.


MANN: Mikhail Gorbachev, speaking to us on Monday.

A final thing before we go about the man at the head of the crumbling Media-Most empire, Vladimir Gusinsky, now in exile in Spain. In an interview with a Swiss newspaper, he chided the West for not reacting angrily to what he called the Kremlin's attack on the free press.

Gusinsky himself has other problems - legal problems. Russia has asked for his extradition from Spain, and a court is set to rule on that case in just a matter of hours.

That's INSIGHT for this day. I'm Jonathan Mann. The news continues.




4:30pm ET, 4/16

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