BATURINA STORY STUMPS FORBES

Moscow Mayor Yury Luzhkov and his billionaire wife Yelena Baturina have never taken kindly to suggestions that Baturina amassed her fortune in the construction business thanks to her husband’s position.

So when Forbes Russia prepared to release its December issue last week with a picture of Baturina on the cover and the quote, “I am guaranteed protection,” a scandal was almost inevitable.

It began last Thursday, when Axel Springer Russia, the publisher of the Russian edition of Forbes, announced that the release of the December issue had been postponed because “the principles of journalistic ethics” had not been observed in the article on Baturina and her construction firm Inteko.

Forbes Russia editor Maxim Kashulinsky said in an interview Friday that the entire article had been leaked to Inteko and that a lawyer for the company had threatened to sue if the article were not withheld.

“I don’t know where the leak came from, but it certainly wasn’t from our editorial office,” Kashulinsky said.

The editor subsequently tendered his resignation to protest the postponement.

In a statement released Friday, Axel Springer Russia, the Russian subsidiary of Axel Springer, said Baturina’s cover quote about protection had been taken out of context. In fact, she said: “Like any investor, the protection of my rights is guaranteed.”

The German media giant relented, however, after Kashulinsky submitted his resignation and Forbes in the United States issued a statement demanding that Axel Springer release the issue as printed.

The issue, with the original cover quote changed to read, “As an investor I am guaranteed protection,” was available at newsstands over the weekend.

“It was the only correct decision,” said Kashulinsky, who said he would consider staying on after the decision to publish the December issue. “It has been neither signed nor withdrawn,” Kashulinsky said of his resignation.

Axel Springer released a statement Friday saying the December issue had not been delivered on schedule because “adequate fact-checking” had not been carried out in the Baturina story.

“After checking the facts in keeping with due journalistic diligence, the misleading quote was corrected, but no changes were made to the report itself,” the statement said.

Vladimir Pomukchinsky, publications director for the Rodionov Publishing House, which prints BusinessWeek in Russia under license from McGraw-Hill, said he was surprised by Axel Springer’s original announcement that the issue would not be released.

“It’s a strange situation. If companies are going to come into editorial offices every day to demand changes in articles before they are published, then the legal environment for publishing social and political journalism will simply cease to exist,” Pomukchinsky said.

In a statement released Friday, Inteko said it would not rule out legal action if “objectivity and professionalism are sacrificed” in the published article, as the company had “already encountered in the case of the original cover.”

Baturina has a successful track record in litigation. Last year, for example, Moscow’s Tverskoi District Court ruled against Kommersant, which she sued over two articles.

One report suggested that she had concealed her involvement in financing the construction of the Travsvaal water park, which collapsed in February 2004, claiming 28 lives.

The other report suggested that then-Deputy Mayor Valery Shantsev had held on to his job thanks to Baturina’s influence.

The court ordered Kommersant to publish retractions of both articles and to pay damages to Baturina.

There have been an “enormous number” of similar confrontations between Yury Luzhkov’s camp and the media over the past 15 years, said Oleg Panfilov, head of the Center for Journalism in Extreme Situations.

“But typically they are settled quietly and never made public,” Panfilov said. “The only thing that makes this case different is that Forbes wouldn’t be pushed around, and Kashulinsky went to the press.”

Panfilov dismissed insinuations in the media that the whole scandal was merely a stunt to promote the Baturina story.

“Even with a good PR campaign, the number of Forbes’ readers will hardly increase,” Panfilov said. “If it was a PR stunt by Forbes, it was a stupid one. If it was a PR stunt by Baturina, it was even more stupid.”

Carl Schreck