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Soros' Foundation Criticizes an Effort to Retake Its Offices

A security firm is fired after masked men 'storm' the U.S. financier's Moscow institute, which had been raided by a rival.

November 18, 2003|David Holley | Times Staff Writer

MOSCOW — A Russian private security firm acted improperly when it carried out a botched attempt to retake the recently-seized offices of U.S. financier George Soros' New York-based Open Society Institute in Moscow, a foundation official said Monday.

"We've terminated our agreement with the security company because we don't believe in using methods that allegedly were used," Stewart Paperin, the institute's executive vice president, said Monday in a telephone interview from New York. "We didn't foresee people scaling fences and things of that sort."

The institute's Russian branch was thrown out of its offices earlier this month in a midnight raid by private security forces hired by a businessman who says that the institute owes several million dollars in back rent and unpaid utility bills. The institute says it is resisting an illegal shakedown.

The businessman, Kantemir Karamzin, has repeatedly lost to the foundation in court battles over the property. Equipment and records were confiscated by Karamzin's people.

The Open Society Institute-Soros Foundation supports nonprofit organizations and democratically minded groups in many countries, particularly former Communist states. Before the raid by Karamzin's group, Soros had criticized the arrest of Russian tycoon Mikhail Khodorkovsky, the former chief of Yukos Oil Co. Karamzin has hinted that the legal dispute could have connections to the Yukos case.

The institute's security firm tried to recover control of the building Friday night, Paperin said. "What we were seeking to do is enter the building and assert our legal rights," he said. That decision was taken in New York, he added.

The effort was repulsed.

Russian media have carried lurid reports of the incident. The Russian news agency Interfax reported Saturday that four "unidentified attackers" had "stormed" the institute's former headquarters and injured four security guards.

The English-language Moscow Times carried a story Monday under the headline "20 Masked Attackers Storm Soros Institute." That report quoted an unidentified source -- by implication a local employee -- who said that the effort had been organized by institute "lawyers in New York" without the knowledge of Soros or the foundation's Russian branch. That article reported that 10 people had been injured, including Karamzin.

The businessman has been described as the building's owner or the landlord's representative. But the institute has won court cases overturning a "bogus sale" of the building and throwing out a "forged lease," Paperin said.

"I'm told by people on the ground that there was no violence," Paperin said of Friday's incident. "If there was, it clearly was not sanctioned by the Open Society Institute."

The physical nature of the dispute reflects Russia's lack of a properly functioning legal system in which authorities back up court decisions. It is not uncommon for real estate disputes to turn into contests of physical power, partly because police rarely act to enforce court orders in civil cases.

Yekaterina Geniyeva, director of the institute's Russian branch, who was in Stockholm when Friday's incident occurred, blasted the decision to storm the building as "sheer stupidity."

"The Soros Foundation-Russia did not have anything to do with all that," she said. "If someone whom I do not know abused his powers and issued orders to some other people to jump over the fence and carry baseball bats and so on, this is beyond my understanding."

Geniyeva said the proper way to deal with such a dispute is to appear at the building with public officials such as bailiffs, request entry, record what happens and deal further with the matter in court. "The damage done to the good and reputable name of the Soros Foundation in Russia is tremendous," she said.

Paperin called Karamzin's people, who still occupied the building, "a bunch of thugs that stole an asset we have rights to.

"He's gone as far as telling me that he's asking an outrageous price because we have the money and we can pay," Paperin said of Karamzin.

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(BEGIN TEXT OF INFOBOX)

Financier's Russian giving on the wane

* The New York-based Open Society Institute-Soros Foundation supports nonprofit organizations and democratically minded groups in many countries, particularly in former Communist states. It was founded by U.S. financier George Soros.

* The Soros Foundation has spent more than $1 billion on charitable projects in Russia during the last 15 years.

* In June, Soros said he planned to drastically scale back his program of charitable donations in Russia and leave it for the Russian government to take on much of the work.

* The institute was tossed out of its Moscow offices this month in a midnight raid by private security forces hired by a businessman who says that the institute owes several million dollars in back rent and unpaid utility bills. The institute says it is resisting an illegal shakedown.

Sources: BBC, Los Angeles Times

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Alexei V. Kuznetsov of The Times' Moscow Bureau contributed to this report.

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