#19 | October 9 - 22, 1997  

by Abram Kalashnikov

In Casablanca, a great moral film from an era when bad guys helped us out by wearing uniforms identifying them as such, there is a great line when Humphrey Bogart chastises Peter Lorre. "I don't object to a smuggler," he said. "I object to a cut-rate one."

In our era, there are still smugglers and cut-rate smugglers. Journalists inevitably fall into the latter category. Rather than lie for profit, they tend instead to be unintentionally stupid and dishonest for low pay. Really good liars tend to avoid journalism altogether.

There is a reason for that. No really skilled liar would ever enter the field of journalism. The pay is too low. Really good liars go into other fields, like big business and politics. In these fields, one can take the practice of factual inaccuracy and ride it to an early retirement. The best most journalists can hope for, meanwhile, is a small nest egg to pay for the corrective dental surgery they needed throughout their squalid little careers.

One group of people who will not be needing money for corrective surgery are the folks at Euromoney magazine. This enormously influential international business magazine, which boasts a circulation of 160,000, recently named Anatoly Chubais Finance Minster of the year.

I almost ignored the Euromoney story, feeling that it was beneath even this newspaper to go after such an easy target. It would be too easy to say that this had something to do with the tens of thousands of dollars of advertising revenues Euromoney earned by publishing corporate statements from Chubais-friendly organizations-Gosincor and the Foreign Investment Center (both Chubais-created state organizations), National Reserve Bank, Vnesheconombank, et al. All of these organizations, and a few others, paid upwards of $20,000 per advertisement to appear in the September issue of Euromoney.

The Euromoney award, however, was striking in the way it revealed what Western standards for excellence really are. High up in the text accompanying the award is a quote from one Aleksandr Tolchinsky, a Credit Suisse executive:

"The Ministry of Finance has become the most sophisticated part of the entire Central Government. In terms of professionalism, dealing with foreign investors, and even the English-language ability of their staff, they run an extremely smooth, polished operation."

Now, if only they would stick a drive-thru window in the Central Bank, we'd really have something to cheer about. English-language ability? Are we running a government here, or an airline? Who knows. Euromoney, however, didn't stop there, praising Chubais for his role in the recent Svyazinvest auction:

"The relative transparency of the Svyazinvest deal was in marked contrast to Russia's earlier 'loans-for-shares' scandal in which the government was accused of handling over valuable state assets at rock-bottom prices to well-connected insiders."

Makes sense. Chubais gets credit for the Svyazinvest deal, but takes no heat for loans-for-shares, which, Euromoney neglects to mention, was engineered by-you got it-Chubais.

Editorials like the one from Euromoney are generally not worth criticizing as journalism, because they don't really count as journalism: there is not enough of a pretense of objectivity to make delineating their dishonesty worthwhile. Still, examining the point of Euromoney and publications like it is useful, because their overall message seems always to trickle down into the coverage of writers for the more "free-thinking" and "independent" mainstream publications.

Take, for instance, the insidious Euromoney phrase "relative transparency." If that phrase sounds familiar, it's because you've read it in the articles of countless respectable publications since the Svyazinvest auction. Take, for example, the Washington Post's David Hoffman's post-Euromoney September 9 article, the absurdly titled "Kremlin Reformers Take on Money Magnates."

In that piece, Hoffman wrote: "Some analysts said [the Svyazinvest auction] was a relatively fair sale because unlike most tenders, it went to the highest bidder and earned a bundle of cash for the government."

A fair auction is a little like a pregnancy. It either is, or it isn't. You either offer a product equally to everyone and sell to the highest bidder, or you don't. There is no such thing as a "relatively" fair auction, as the Svyazinvest affair subsequently proved. It's either fair or it isn't. And this one wasn't. Just ask Alfred Kokh, who now faces seven years for rigging the thing in favor of Uneximbank.

Another good example of straight press-parroting revolves around the United States government's official editorials, which are broadcast on the Voice of America. Like theEuromoney editorial, they are completely dishonest and inaccurate, and seemingly unworthy of criticism, but on second thought striking in their resemblance to the coverage of mainstream publications like the New York Times. An example is a recent VOA editorial, coincidentally-or not so coincidentally-released at the same time as the Euromoney piece:

"According to a leading American economist, Martin Feldstein," it reads, "the Russian economy has made remarkable progress."

So far, so good. It continues:

"The demise of the command economy has ended widespread shortages of consumer goods."

What I think this means is that Russia no longer produces anything on its own, so its shelves are now filled with American products. Progress, I guess. Maybe this is what the New York Times's Michael Specter meant when he talked about the "apparent end to Russia's industrial decline." Because in its usual meaning, Russia is still actually in the midst of the most pronounced depression ever observed in a modern economy.

Even Uncle Sam admits this: "Privatization has not yet produced a substantial increase in industrial activity, in part because the transformation is so recent...The government is taking steps to remedy these problems. Banks are beginning to provide commercial credit. The legal system is being reformed...In response, the Russian stock market has jumped one hundred fifty percent this year."

I seem to remember the Mexican market performing pretty well not long ago. Now that was one sure indicator of economic progress, wasn't it? The economy was doing so well that peasants revolted and Mexican currency quickly became worth less than toilet paper. When that happens here, VOA will put out another editorial saying that our economic collapse is actually good news: with such a devalued currency, the Russian export market will boom.

Governments and bankers lie; it's in their interests to do so. There's no use in criticizing them for it. But when journalists parrot their garbage, it makes no sense. The vast majority of them aren't seeing a piece of the pie. After all, no one's giving Timothy Heritage of Reuters $20,000 a pop to say reforms are working in Oryol. But he goes and does it anyway. Just like any other hack, only more so...