Russian State TV Channel Says Let's Make a Deal

When the Russian Government decided to reorganize the vast and unprofitable state television network, the theft and corruption were so pervasive that the network called a four-month moratorium on all commercial advertising.

It was a staggering move that cost the cash-strapped network, Ostankino, tens of millions of dollars. It was also a blow to advertising wholesalers, independent producers and network employees who were skimming millions of dollars a month.

And many say it was a motive behind the unsolved slaying of Vladislav Listyev, a popular television personality who was killed on March 1, soon after he was put in charge of what is now known as Russian Public Television, ORT.

On Aug. 1, Russia's largest network is to begin selling advertising again. But the person selected to manage those sales was a stunning choice in an industry desperate to purge itself of scandal.

The reorganized state channel is already awash in political scandal. ORT was set up to serve as the voice of the current Government. With parliamentary elections scheduled for December, political opponents increasingly portray the network as a reflection of how power in Russia now works -- an often corrupt collusion between the Kremlin and the clique of business interests that support it.

The deputy chairman of the network, Boris A. Beresovsky, said in an interview that the board had selected Sergei Lisovsky, 34, a dashing entertainment mogul, to direct the network's advertising. Mr. Lisovsky's company, Premier SV, is one of Russia's leading advertising agencies.

Many in the Government and in advertising say Mr. Lisovsky was the principal architect of the very system that the new management vowed to reform.

"I realize there will be a lot of questions about conflict of interest," Mr. Beresovsky said, "but let's be realistic. This is Russia. We have a very small market of real businessmen. Lisovsky is for sure the best, the only one with the experience to do it."

Mr. Beresovsky heads the country's largest car dealership, Logovaz, which is one of the new owners of ORT. It was Mr. Beresovsky who recruited Mr. Lisovsky.

"There's a lot of talk about his criminal connections," he said. "But I kept telling people, 'Show me some proof.' They didn't have any."

Despite repeated attempts, Mr. Lisovsky could not be reached for comment.

The appointment of Mr. Lisovsky, who was investigated by the police in connection with Mr. Listyev's death but was not charged, is clearly controversial. But so was the Government's decision to sell off 49 percent of the state channel behind closed doors to a select group of loyal business tycoons.

The Government retains the controlling 51 percent interest. The network's huge drain on the national budget was one reason for the sale. Competition from rival private networks, which have made significant inroads into its viewership, was another. And politics also played a critical role.

President Boris N. Yeltsin's political opponents complain bitterly that his administration decided to reorganize the chaotic, ill-managed state channel to better control its broadcasts during the parliamentary elections. Mr. Beresovsky did not disagree.

"We have a so-called club of bankers, and we proposed to cooperate in the management of the mass media," he said, referring to partners like the Minatep and Stolichny banks, as well as Gazprom, the natural gas company once run by Prime Minister Viktor S. Chernomyrdin.

Mr. Beresovsky, who explained that he personally pitched the privatization deal to Mr. Chernomyrdin, said that television would play a "dominating role in the coming elections" and that this time he and his partners in business and the Government did not plan to allow the ultranationalist Vladimir V. Zhirinovsky the same access to the airwaves he wielded with such success in the 1993 elections.

"Zhirinovsky and the Communists are the enemy," Mr. Beresovsky said. "We can't be restrained against an aggressive power; we too have to be aggressive."

Sergei Y. Blogovolin, who was appointed general director of ORT after Mr. Listyev was killed, said in an interview today that the network was considering banning all paid political advertising and instead giving small amounts of free time to all political parties.

"We have all this time for our own political purposes," he said. "In the election campaign we will not be neutral."

Igor M. Podzygun, a business executive at ORT, would not discuss Mr. Lisovsky's appointment, which has not yet been officially announced. But he noted that the advertising department that Mr. Lisovsky was expected to run would report to the network leadership. "If we are in any way dissatisfied with their work," he said sternly, "we can fire them within three months."

There are no plans to shield Mr. Lisovsky, who will receive a salary and a percentage of the profits from advertising revenue, from potential conflicts of interest in his new job. The network selected Premier SV and four other agencies as their primary intermediaries to clients. Of them, only Premier SV is a major agency. As it did under the old arrangement, Mr. Lisovsky's company could have by far the largest share of ORT's advertising business.

A Russian advertising executive suggested that the tough and skillful Mr. Lisovsky would introduce some order to the system. "Things will at least be clearer," said Sergei Koptev, managing director of the Moscow office of D'Arcy Masius Benton & Bowles. "Yes will mean yes and no will mean no."

Mr. Lisovsky has never been convicted of a crime. But police officials who spoke on condition of anonymity said they believed that he had had business dealings with several well-known organized crime figures.

Mr. Beresovsky, whose car was blown up last year, killing his driver, said that if anyone should be concerned about Mr. Lisovsky's dangerous liaisons, it was he.

"I don't want to compare myself to Listyev, but my driver was murdered," he said. "I have more reasons than most to care about who Mr. Lisovsky is exactly."

Mr. Lisovsky started his career promoting concerts during the Gorbachev era. He quickly established himself as a powerful player in Russia's newly born entertainment industry, working as a talent agent, producer, film distributor, nightclub owner and advertising mogul. Around Moscow, Mr. Lisovsky travels in a two-jeep caravan with six armed bodyguards cradling rifles across their laps.

In an interview earlier this year, Mr. Lisovsky said crime and corruption were just a part of doing business in Russia. "It's a period we have to live through," he said impatiently. "Like the 1890's in the Wild West."

Last year he attended a meeting of top advertising executives who gathered to discuss ways to self-regulate their no-holds-barred industry. When the participants agreed to establish a professional association, the moderator, Natalya E. Fonaryova, chairwoman of the state anti-monopoly committee that is supposed to regulate advertising, asked the group how much it was prepared to contribute to set it up.

No one spoke. Mr. Lisovsky shifted in his chair, and a pistol tucked into his waistband clattered noisily to the floor. Silence again reigned. Mrs. Fonaryova said she dryly commented, "Well, at least we can see what Mr. Lisovsky plans to contribute."

Photo: Sergei Lisovsky has been selected to direct advertising at Russia's largest television network, which has been reorganized. He is shown outside a Moscow nightclub in which he is a partner. (Gleb Kosorukov for The New York Times)