Izvestia: Publishing Rights Versus Property Rights

THIS is a conflict in which emotions run high. Journalists accuse the Russian parliament of infringing on freedom of press. The parliamentarians retort that their goal is only to take back what they say rightfully belongs to them. Neither side is willing to back down, and, in all likelihood, the dispute will end up in Russia's already overburdened Constitutional Court.

At the heart of the squabble is the leading Russian newspaper, Izvestia, which for a number of years now has been consistently advocating political and economic reforms. It has unofficially allied itself with Russian President Boris Yeltsin and his entourage.

For years before that, Izvestia belonged to the Soviet parliament, which, on paper at least, was the supreme power in the old Soviet Union. But after the coup of last August, its editors proclaimed the paper independent and have operated it as such ever since.

In July, however, the Russian parliament voted to bring Izvestia under its control. Since the parliament is perceived to be an institution opposed to Mr. Yeltsin and his team, the Yeltsin camp cried foul, accusing the deputies of attempting to strangle Russian democracy.

These concerns were largely echoed in the West, including the United States. But what has so far been overlooked is that behind this trivial liberal-conservative bickering lies a crucial issue that still has not found its solution in Russia. It is the issue of property rights.

Our sources say that the proclamation of Izvestia's "independence" proceeded as follows. Soon after the failed August coup, its journalists gathered in a conference room and pronounced their paper an independent entity. They applied at the Ministry of Information for a registration certificate and received it soon thereafter. For a while, it seemed that the matter was closed. But in reality it wasn't, and here's why.

Izvestia, like any newspaper, is constituted not only of journalists. It also has valuable assets. Izvestia's numerous assets include prime real estate occupying a whole block in downtown Moscow, a modern printing plant, a publishing house, an impressive fleet of trucks and cars, out-of-town recreational facilities, and computers.

In their reformist euphoria, the Izvestia editors have never bothered to ask themselves a simple question: Who owns the chairs they are sitting on? The real problem is that, short of proper privatization, their declaration of independence looked more like a revolutionary takeover.

Indeed, what is Izvestia now in business terms? A private company? But, then, who owns it? If it is a public company, where is the exchange on which the paper's stock is traded? Who are its major stockholders who are supposed to sit on the board of directors? Was there a management buyout of the enterprise? Was there an auction, in which the paper was sold to the highest bidder?

In fact, none of these questions can be answered in the affirmative because a new set of privatization laws are still under debate in Russia. From a purely business perspective, today's Izvestia is a free-wheeling workers' collective operating a state property that the state had been neglecting for some time. And what we see in the parliament's move to control Izvestia is an attempt by the state to reassert its rights over its property.

Nobody really questions the right of Izvestia journalists to freely express themselves, which they have been already doing for some time. What can be questioned, however, is their right to operate a property that in all appearance does not belong to them.

HE parliament's case doesn't look impeccable either. Russia's Supreme Soviet has yet to prove that it is the legal successor of the self-disbanded Soviet parliament that owned Izvestia. That contention is arguable at best.

However, the very fact that the parliament has made this claim is probably a positive development. For one thing, it underscores the fictitious character of Russia's so-called "independent" press. A press that for the most part doesn't even own its production tools, which goes out on government-subsidized newsprint, which operates out of low-rent or rent-free government buildings, and which asks the government for special treatment every time the emerging market forces hit it hard - as it happened, for

instance, late last year when newsprint prices rose sharply - cannot be considered truly independent.

If by some miracle standard Western business laws were applied in Russia, Izvestia's current "independence" would not last a day. Since such laws are all about protecting property rights, those of individuals as well as those of states, we doubt that the paper's editors would even be allowed to operate in their new "independent" capacity under the same busi-ness name. A name, too, constitutes a property.

Thus the conflict between Izvestia and the Russian parliament has highlighted the contradiction between a very romantic Russian press law and the severe realities of a market economy, between a deep-rooted socialist psychology in even the nation's leading journalists and a hard-headed view of property relations.

This conflict emphasizes the urgent need for Russia to clearly define its property and privatization laws in order to avoid ambiguities like those in the Izvestia case.

As for the paper itself, it simply needs to be properly privatized, in line with the wishes of both workers and "owners."

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