Russia Update: Ekho Moskvy Faces Loss of Economic Independence

July 23, 2015
Russia's Ministry of Justice. Photo by Yuri Mashkov/TASS

The MacArthur Foundation announced it is leaving Russia after being included in the government’s “undesirable organizations” list. It is the last of US philanthropies to leave in a decade as Putin’s crackdown on civil society worsens.

Welcome to our column, Russia Update, where we will be closely following day-to-day developments in Russia, including the Russian government’s foreign and domestic policies.

The previous issue is here.

Special features:

‘I Was on Active Duty’: Interview with Captured GRU Officer Aleksandrov
Meet The Russian Fighters Building A Base Between Mariupol And Donetsk
‘There Was No Buk in Our Field’
With Cash and Conspiracy Theories, Russian Orthodox Philanthropist Malofeyev is Useful to the Kremlin

Russia This Week:

Is ‘Novorossiya’ Really Dead?
From Medal of Valor to Ubiquitous Propaganda Symbol: the History of the St. George Ribbon
What Happened to the Slow-Moving Coup?
Can We Be Satisfied with the Theory That Kadyrov Killed Nemtsov?
All the Strange Things Going On in Moscow

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Ekho Moskvy Faces Loss of Economic Independence as Shareholders Turn Down Loan Request

Ekho Moskvy has been turned down for a request to its shareholders for a loan of 100 million rubles for six months, reported, citing a news item on the radio’s web site.

A minority of shareholders blocked the request, “acting editor-in-chief Vladimir Varfolomeyev” was quoted as saying in the brief message, characterizing the terms of the loan as “cabal-like.”

It was not known why Varfolomeyev was described with the title “acting editor-in-chief” as he has been deputy editor, and the editor-in-chief has been Aleksei Venediktov, who has not made any statements about any changes.

The minority shareholders believed the loan’s terms could not be met, said Varfolomeyev, which will lead “to the completely loss of Ekho Moskvy’s economic independence and as a result, to the full loss of its editorial independence.”

The loan was sought from Aura-Media, Ltd. in order to cover a forecasted deficit caused by Russia’s economic crisis and the crash of the ruble earlier this year.

Evidently citing a shareholder, Varfolomeyev said that “the new general director, to the detriment of the interests of the minority shareholders, made ‘a number of wrongful actions which negatively affected the financial situation of the radio station and led to today’s critical state.'”

Some journalists have quit Ekho Moskvy this year citing an increasing atmosphere of pressure from the Kremlin to rein in controversial articles and not provide a platform for opposition to speak out.

The shareholders said the radio was run at a profit for some years until 2014, when its owner, Gazprom-Media Holding, removed Yury Fedutinov, who had been manager for 22 years and put in his place Yekaterina Pavlova, a protege of the president’s press service, and wife of one of the deputies of Dmitry Peskov, administration spokesman.

Pavlova was removed, and then recently brought back again.

Venediktov’s comment on Twitter indicates that “the minority sharefholders” are the editor and journalists themselves.

Translation: my portfolio of shares of Ekho voted against accepting the loan for Ekho Moskvy from GazProm-Media of 100 million rubles. This story began with the firing of the advertising service.

In the corporate structure of Ekho Moskvy, editors and journalists own 34% of the shares of the company, and Gazprom-Media holds 66%.

It is not clear what the next moves might be, as the owner will likely see the minority shareholders’ action as impacting their survival as a company.

Venediktov had a further comment in answer to a query from a reader:

Translation: @aavst Is Ekho being pushed in the direction of bankruptcy?

Translation: In my opinion, yes. And deliberately.

As reported earlier, Gazprom-Media, which holds a number of
publications, lost 2.09 billion rubles (about US $36 million) in 2014, compared to 8.6 billion
ruble ($148 million) profits in 2013.

Ekho makes its revenue by selling radio ads including for mail-order products.

Although Ekho Moskvy has been owned by
Gazprom, Russia’s state gas monopoly, for years, it has enjoyed some
independence. But in recent years it has begun cutting opposition
bloggers after getting warnings from the censor and the station also suffered death
threats from Chechen leader Ramzan Kadyrov for coverage of the Charlie
Hebdo magazine covers considered insulting to Muslims and for critical
reporting on Chechnya.

— Catherine A. Fitzpatrick

Imprisoned Russian Opposition Member Hospitalized in Krasnoyarsk

Political prisoner Leonid Razvozzhayev has been hospitalized in Krasnoyarsk, reports, citing RIA Novosti.

His lawyer Dmitr Agranovsky, said that when he tried to contact Razvozzhayev, he discovered he was in the hospital. He has no other details.

Two weeks ago, his lawyer learned that he had been transferred to Krasnoyarsk instead of Irkutsk in May 2015.

Razvozzhayev had requested leave to go to his mother’s funeral but was denied.

Razvozzhayev and his co-defendant Sergei Udaltsov were among opposition members sentenced for participating in the anti-Putin Bolotnaya demonstrations in May 2011. He was charged with “organizing mass disorders” and sentenced in May 2012 to 4.5 years and a fine of 150,000 rubles ($2,590).

— Catherine A. Fitzpatrick

MacArthur Foundation Last of Major Philanthropists to Leave Russia in Last Decade

MacArthur Foundation is leaving Russia after  more than 25 years of funding organizations there, the New York Times and, reported.

In a statement on its web site, MacArthur said its decision to leave was induced by the Russian parliament’s recent creation of a blacklist, known as the “patriotic stop list” of organizations.

The recent passage and implementation of several laws in Russia make it all but impossible for international foundations to operate effectively and support worthy civil society organizations in that country. These measures include a law requiring Russian non-governmental organizations to register as foreign agents if they receive foreign funding and engage in “political activities.” The most recent such measure is a law allowing authorities to declare the activities of international organizations “undesirable” if they present “a threat to the foundations of the constitutional order of the Russian Federation, the defense capability of the country or the security of the state.”

These laws, public statements by Russian legislators, and the vote by the Federation Council to include MacArthur on a “patriotic stop-list” of organizations recommended for designation as “undesirable” make it clear that the Russian government regards MacArthur’s continued presence as unwelcome.

The “stop list” includes 20 organizations including Freedom House, Jamestown Foundation, Eurasia Foundation and the Ukrainian World Congress was created after the passage of a law on “undesirable” organizations believed to threaten Russian security, as we reported earlier this month.

The law covers mainly foreign organizations not included in previous
punitive legislation regarding alleged “foreign agents,” Russian
domestic organizations that are deemed to engage in vaguely-defined
“political activities” that receive grants from abroad. Such groups are believed by Russian authorities to be trying to create a much-feared Ukrainian-style “Maidan” protest movement in Russia

Other groups being considered for inclusion on the “undesirables” list include Human Rights Watch.

The reality is that the organized non-profit groups that receive Western grants both in Ukraine and Russia are not the same ones which organize mass street protests. US law forbids funding political parties abroad.

As Tatyana Lokshina said in a statement on the web site of Human Rights Watch, the “undesirables” law is part of a general “witch hunt against civil society organizations.”

As Human Rights Watch pointed out in a report, not only are groups put in the “foreign agents” list, even if they do not receive any foreign funding, they can receive warning that if they ever plan to, they will be required to register as they are already deemed to be engaged in “political activities.” A group in Istra in the Moscow Region called “Assistance to Cystic Fibrosis Patients” and the Amur Social-Ecologic Union in Blagoveshchensk in Russia’s Far East are just two of 54 such groups to receive warnings.

Yesterday, Interfax reported that the Justice Minister warned another 12 groups that they must note that they are foreign agents on all their materials and publications or face a 500,000 ruble ($8,689) fine, Interfax reported. There are already more than 60 organizations on the list.

These groups receiving additional warnings include many that have already been fined for failing to register as “foreign agents,” including the Sakharov Center, Memorial, Transparency International Russia, Bellona, and the Nizhny Novgorod-based Committee Against Torture.

MacArthur spent more than $173 million in grants on education, human rights, and limiting nuclear weapons proliferation.

MacArthur is the last of the big American foundations to leave Russia — it had hung on for years of succeeding Putin administrations after others left due to difficult working conditions. Ford Foundation left Russia in 2009 and ceased funding projects there was well as it shifted to other global priorities. Soros Foundation had left much earlier, in 2003, although it continues to provide grants for groups working in Russia.

USAID, the government agency for international development, left in 2012 when the “reset” broke down even before the war in Ukraine with the backlash from the Magnitsky Act which sought to end impunity for Russian officials believed to be involved in serious human rights violations.

As the Guardian reported
, after all the other Western foundations left, MacArthur was the only one to directly help civil society:

Viktor Voronkov, director of the Centre for Independent Sociol
Research, which received a grant from the MacArthur Foundation in 2012,
said the fund was “not driven by political motives” and had been the
“main partner for Russian science” after the Soros Foundation reduced
its funding in the area.

Yelena Topoleva-Soldunova, a member of the presidential human rights
council, said the foundation’s closure would be a “pretty grievous loss”
especially for universities in the regions that had been its focus.
“Our economic situation is not very easy right now and … there are not
so many Russian sources of support,” she told state news agency RIA Novosti.

Now it’s a question of how thousands of people who worked in NGOs will not only continue their activism, but make a living. A number of prominent figures mainly from the opposition such as Ilya Ponomarev, a member of the State Duma, and the economic Sergei Guriev have left Russia, but most people will not choose that option because in fact they don’t have any foreign connections or foreign languages or even foreign currency to help them through the difficulties of emigration.

— Catherine A. Fitzpatrick