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Russia: NTV Shareholders Appoint Controversial Businessman As New Director

  • Sophie Lambroschini

Boris Jordan, the 34-year-old "wunderkind" who has been named the new director-general of Russia's NTV network, remains an enigma to many Russians. The gas monopoly Gazprom took control of the network 3 April during a disputed shareholders meeting, and NTV journalists have been protesting the move ever since. Gazprom says the appointment of Jordan -- a U.S. citizen with 10 years of financial experience in post-Soviet Russia -- is proof of its commitment to business and media ethics. But critics note that Jordan's reputation has been tarnished by his past involvement with Russia's oligarchs. RFE/RL Moscow correspondent Sophie Lambroschini profiles the controversial businessman.

Moscow, 6 April 2001 (RFE/RL) -- Boris Jordan, named 3 April as NTV's new director-general, has not had an easy first few days. Today's scheduled meeting between officials from state-run Gazprom -- which now controls the network -- and NTV journalists protesting the takeover was to have been Jordan's first encounter with his reluctant new staff. But the meeting, which was meant as a conciliatory first step toward compromise between the two camps, broke up after just an hour with no progress made.

Jordan, a 34-year old U.S. businessman of Russian descent, has made a career -- and probably a small fortune -- in investment banking in post-Soviet Russia. He says he wants to convince, and not compel, journalists to accept his good intentions. He is seeking, he says, to make debt-ridden NTV economically sound through restructuring, without touching the independent network's editorial policy.

At first glance, Jordan's appointment would seem suitable for a station that has always prided itself on its Western-styled professionalism and cosmopolitan outlook on the world. But there is considerable controversy over Jordan's 10-year record as an investment banker in Russia.

To some, Jordan's achievements make him a well-informed professional. To others, he has compromised himself by his active participation in a series of questionable privatization deals with what some analysts call Russia's "bandit capitalists."

Jordan's family fled Russia in 1920, when the "white" [that is, anticommunist] army lost to the Bolsheviks, and clung to its Russian roots after settling in the United States. Jordan's grandfather was education minister under the last czar and, like some other white Russians, Jordan returned to post-Soviet Russia. In 1992, as Russia began its transition to a free market, he settled in Moscow as an investment specialist for a Western bank, Credit Suisse First Boston.

Earlier this year, commenting on his controversial role in Russia's privatization, Jordan said he had picked up where his grandfather had left off. He told the Russian weekly "Expert": "What my grandfather couldn't do with weapons, I did through privatization."

Far from remaining an expatriate working on the sidelines, Jordan joined the process. In 1992, when Anatoly Chubais launched privatization through the distribution of vouchers representing shares in some of Russia's most valuable natural resources, Jordan bought up millions of vouchers. He set up a fund -- called Sputnik -- for direct investments in Russia and, working as a government consultant, is said to have attracted as much as $400 million. Jordan then went on to create Renaissance Capital, which quickly became one of Russia's leading investment banks.

Some Russian analysts say that Jordan may also have had played an important role in conceiving the loans-for-shares scheme, in which Russia's richest businessmen lent the state millions of dollars on the eve of the 1996 presidential election won by Boris Yeltsin. As surety they received shares in some of Russia's vast government enterprises.

In order to guarantee the continuity of government needed to keep the scheme profitable, the businessmen contributed heavily to Yeltsin's election campaign and ensured his victory. Unable to pay back its creditors, the state subsequently transferred ownership of some of Russia's most valuable resources to the rich businessmen. They then became full-fledged "oligarchs," who controlled Russia's major revenue-generating businesses while heavily involving themselves in political decision-making.

According to economic analyst Mikhail Delyagin, Jordan's reputation was first publicly sullied in 1996 in connection with the loans-for-shares scheme. At the time, the analyst says, Jordan in effect became what he calls the state's "fig-leaf." Delyagin says that Jordan's foreign citizenship was used to justify doubtful state actions, adding the same pattern is being played out today:

"Most foreign managers have a sense of corporate ethics and they wouldn't participate in things like the Russian loans-for-shares auctions. They didn't want to be the showcase of a scam, they didn't want to be the showcase of the plunder of the state and of the people. But Mr. Jordan was ready to [be that]. But that's how you get a corresponding reputation in Russia. They couldn't find any other managers to take upon themselves such a dirty job -- who didn't want to be the public showcase of [another] deception. And here you've got a real professional, who was ready to do it. So why not use him a second time?"

But Jordan himself is proud of his role in Russia's privatization. In the interview with "Expert," he said: "You can discuss [the privatization schemes'] pluses and minuses, [but] the main aim was to destroy the communist system and it was achieved."

By 1998, Jordan's business interests in Russia consisted of investments in aluminum, oil, telecommunications, and insurance. Two years later, although he had warned Russia was "heading for an [economic] dead-end," he was hit hard by the aftermath of Russia's financial crisis. He said that he lost 90 percent of what he had earned since coming to Russia.

If so, he has recovered quickly. Today, Jordan acknowledges, he is involved in businesses from alcohol -- Dovgan vodka -- to popular music -- radio station Evropa Plus. He also continues to bolster the Sputnik equity group he founded earlier, which now includes investors such as U.S. financier George Soros and the Harvard Investment Fund.

Outside of his multiple business activities, Jordan is an enthusiastic promoter of The Cadets, an old regime-style military academy where boys are meant to be educated along the czarist principles of "national identity, orthodox faith, and discipline."

Jordan has said publicly (to "Expert") that he "believes in" President Vladimir Putin. He dismisses allegations that Putin is "installing a dictatorship."

Jordan says that now there is more than business holding him in Russia. He says he came first "practically without trousers to Russia," intent on making a career and making money. But today, he adds, work is not the reason he remains in Russia. He says: "I just like it here."