Businessmen Languish in Russian Jails : Economy: Many say their imprisonment makes it harder for Yeltsin to install a free-market system.

One of the reasons Russian President Boris N. Yeltsin is having such a difficult time building a free-market economy is that tens of thousands of the country’s entrepreneurs are languishing in prison, leading Russian business people and former Soviet dissidents charged Thursday.

The business leaders stressed that their imprisoned colleagues are far from being the Ivan Boeskys of Russia. In fact most of them were jailed for activities that are widely accepted in most of the world--such as making a profit from a deal, accepting gifts from business partners or spending U.S. dollars and other hard currencies.

When the Communist Party was in power, many would-be entrepreneurs were convicted of breaking the law on speculation, which basically meant buying low and selling high. Many of the victims of anti-capitalist laws are still behind bars, and several of the laws that put them there are still on the books.

The business leaders have launched a campaign to press Yeltsin to declare a general amnesty for imprisoned capitalists. They point out that even former Soviet leader Nikita S. Khrushchev pardoned people unjustly jailed during the Stalin era.

“These are people imprisoned by the laws of a totally different society--a socialist one,” said Konstantin N. Borovoi, one of Russia’s most prominent businessmen and a founder of the Party of Economic Freedom. “It is senseless to talk about creating a market economy, a free economy, while laws that are incompatible with a normal society are still in effect.

“How can we talk about the openness of our economy when people are put in jail for acting like entrepreneurs?”

Although the authorities have prevented human rights activists from seeing the records that would enable them to compile exact statistics on entrepreneurs now in prison, they probably number 80,000 to 90,000, according to Anatoly F. Vladishevsky, an activist on behalf of imprisoned businessmen.

Vladishevsky recited a list of people convicted and still serving sentences for various economic crimes that by Western standards would not even be considered misdemeanors.

For example, Oleg Khitrov, a student, was convicted in 1989 of buying U.S. currency worth $70 and sentenced to seven years in prison, Vladishevsky said. When his case was appealed last month, the judge declared that what he had done was still considered illegal under Russian law.

Not only has Yeltsin failed to pardon free-market pioneers jailed in the Soviet era, the business leaders say, he has also allowed the arrests to continue.

About 1,500 entrepreneurs have been arrested since the beginning of this year, according to Leonid T. Shpigel, head of the human rights section of the Party of Economic Freedom, who cites Interior Ministry reports.

Vladimir K. Bukovsky, a well-known dissident who spent 11 years in prison camps and psychiatric hospitals before being deported in 1976 and who has returned to Russia to fight for democracy, has also joined the fight to free the jailed entrepreneurs. The only way to build a free-market system, he stressed, is to release such people still in jail and drastically revamp the laws on economic crimes.

“The Russian leadership says that it encourages private enterprise, that it is creating a free-market economy,” Bukovsky told reporters. “But on the other hand, there is not the slightest legal foundation for free-market relations. All there is is the legacy of old legislation designed in the 1960s-1970s, which proclaim (entrepreneurial) activities illegal.”

The resulting situation, he said, is ridiculously contradictory.

“Yesterday the legislature passed a resolution authorizing enterprises to pay wages to their employees in hard currency, but at the same time the criminal code penalizes the use of foreign currency in the country, with sentences of up to 15 years.

“I hope that everybody understands the absurdity of the situation,” Bukovsky added.

Changing the legal codes, however, may not be enough. After more than 70 years of communism, many people believe that doing business, in the Western sense, really is criminal.