Russian Media Magnate’s Arrest Roils Oligarchs

As Russian President Vladimir V. Putin toured Spain on Wednesday, trying to revive investor confidence in his country, the most powerful businesspeople back home were condemning with unusual unity the arrest of a top media magnate.

Vladimir A. Gusinsky, head of an independent media empire often critical of the Kremlin, spent his second night in the notorious Butyrskaya prison, facing accusations of embezzlement. His arrest has elicited a chorus of criticism across the political spectrum, from fellow tycoons to liberal politicians and human rights advocates.

In a sign of how deeply the arrest has rocked Russia’s business community, 17 influential executives wrote an open letter to the nation’s prosecutor general calling for Gusinsky’s release and offering their guarantee that the magnate would stay in Moscow to face any charges filed against him.

The uproar has turned Gusinsky’s arrest into the first major domestic clash facing Putin since his election in March. Russia’s stock market dipped in a further sign of the uncertainty that the dispute has caused in the business community.

Signatories of the letter included such competitive, and at times combative, oligarchs as Vladimir O. Potanin, a former first deputy premier and now chief of the Interros financial group; Mikhail M. Fridman and Petr O. Aven, leaders of the influential Alfa banking group; Yevgeny Shvidler, head of the Sibneft oil company; and heavyweight bureaucrats such as Anatoly B. Chubais, head of the electric company UES, and Rem Vyakhirev, leader of the state gas company Gazprom.

“Until yesterday we believed that we lived in a democratic country, and today we have serious doubts,” the letter stated.

The arrest is widely perceived as the latest Kremlin effort to squash a troublesome critic. In an interview with The Times two weeks ago, Gusinsky said Kremlin administration chief Alexander S. Voloshin targeted his Media-Most company when its outlets refused to toe the Kremlin line.

The arrest came after a raid on Media-Most last month by masked police commandos and FSB officers.

Tycoons Are Said to Sense Danger in Move

Political analyst Sergei A. Markov of the Institute of Political Studies here said the oligarchs sense real danger in what the Putin administration is doing.

“There is a long trail of violations of the law behind every Russian oligarch,” Markov said. “Each of them could in principle repeat the fate of Vladimir Gusinsky--be arrested and thrown into Butyrskaya prison. And that is what all Russian oligarchs and big businessmen are afraid of.”

Liberal politicians and human rights groups also have spoken out, believing that Putin--a former KGB colonel--is increasingly trampling on media freedom and sponsoring a rise in the influence of the FSB, the main successor to the KGB.

Markov said Putin had shown that anyone in Russia could face similar arrest. “No one is safe. Anyone can be thrown in jail without any explanation, because Putin feels that he is acting on behalf of the state,” Markov said.

Gusinsky’s arrest comes amid a tougher official approach to the media. In January, Radio Liberty journalist Andrei Babitsky was detained in Chechnya and branded a traitor by Putin. A television station in St. Petersburg was recently closed. And a proposal to enforce licensing of newspapers was announced this month.

In Spain, where he is on the latest leg of a European tour, Putin pleaded ignorance of the Gusinsky case and insisted that he could not reach Prosecutor General Vladimir Ustinov, who he said was out of Moscow.

Putin also criticized Gusinsky and Gazprom, the state gas company, which owns nearly 30% of Media-Most.

Describing Gusinsky as “a very talented man,” the president said that Media-Most had borrowed $1.3 billion and that Gazprom had guaranteed the loans, covering a $200-million loan several weeks ago when the media company failed to pay.

“I don’t understand why Gazprom has to spend hundreds of millions of dollars servicing Media-Most,” Putin complained. “It is not clear to me what the state representatives in Gazprom were doing,” he said.

Igor Y. Malashenko, a top aide to Gusinsky, on Wednesday said the comments suggested that Putin had been watching the media group and was personally involved in the case.

Putin also took a dig at Gusinsky’s role as head of the Russian Jewish Congress. “Thank God there have been no embezzlements there, as far as I know, and there are no claims against him in this sphere,” he said.

A spokesman for the prosecutor general said charges against Gusinsky would be filed within 10 days of the arrest.

Prosecutors Claim an Embezzlement Scheme

According to prosecutors, Gusinsky and senior officials at a state company, Russkoye Video, embezzled up to $10 million. If convicted, the tycoon could face up to 10 years in prison.

A St. Petersburg businessman has been in jail for a year facing charges related to the case. Investigators have been probing the matter for two years, the prosecutor general’s office said Wednesday.

Malashenko said that the charges leveled at Gusinsky were unfounded and that neither Gusinsky nor his lawyers doubt that the arrest was politically motivated.

Gusinsky and Malashenko have asserted that the Kremlin, and Putin aide Voloshin in particular, will not tolerate dissenting views in the media.

NTV, the network owned by Media-Most, runs the sharpest political satire in the country, the “Kukly” puppet program, which has savagely lampooned Putin and Voloshin. The Kremlin recently demanded that the Putin puppet be taken off the air.

Many analysts reject Putin’s claim that he knew nothing of the arrest.

“He may not have been told about the exact time of the arrest, but such a prominent businessman as Vladimir Gusinsky could not have been arrested without the president’s OK,” Markov said. “Putin has borne a grudge against Gusinsky for a long time and must have welcomed the impending arrest.”

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Alexei V. Kuznetsov of The Times’ Moscow Bureau contributed to this report.