Soviet Communists' rush for cash creates political split

November 25, 1990|By Scott Shane | Scott Shane,Moscow Bureau of The Sun

MOSCOW -- When a Saudi Arabian prince stopped here in September for talks with President Mikhail S. Gorbachev, he and his entourage stayed in a quiet, elegant hotel not yet listed in any guidebooks.

The 63-room hotel, the Visit, has been taking well-heeled foreign guests since last summer, when its proprietor, the Moscow Communist Party, decided it could use the cash.

To Western capitalists who are here for longer stints, the Moscow Communists are renting country homes from their impressive collection. Some are on the estate where Chekhov's play "The Sea Gull" was first performed. Others are on a former estate of relatives of the last czar, Nicholas II.

Maintained and decorated to the demanding taste of the Kremlin elite, they are now being occupied by the likes of Hewlett-Packard Co. and 20th Century Fox and bring an up-market rent of $5,000 to $18,000 a month per house.

As economic chaos spreads and fear of famine grows, many Soviet citizens are talking about the need to move toward a market economy. But the Communist Party is doing something about it.

Taking advantage of the wealth, experience and connections built up during its seven-decade monopoly on the economy, the party is moving into commercial ventures with a vengeance across the country.

Communists reborn as capitalists are staking major claims in tourism, publishing, banking and other fields, often in joint ventures with their erstwhile ideological adversaries from the West.

"To carry out its work, the party needs financial resources," said Yuri A. Prokofiev, Moscow's Communist Party chief. "Those are resources that the party doesn't have. So the party has to engage in commercial activity, since on party dues alone it simply cannot get by."

There's nothing contradictory or shady about this, Mr. Prokofiev insisted: The Communist Party officially backs the Soviet move toward free enterprise, he said, and the party property involved in the new ventures was paid for, fair and square, with party members' dues.

Many other politicians -- both Marxist dogmatists and radical democrats -- reject those arguments as absurd. They see the party's hearty embrace of joint ventures to serve rich Westerners as proof that the party bosses have always been driven not by principles but by the desire for power and privilege.

Alexander Buzgalin, a young intellectual who heads the "Marxist Platform" within the Communist Party, denounced what he calls "nomenklatura capitalism" -- business ventures carried out by the nomenklatura, or party elite.

He said that the current privatization drive will not enfranchise ordinary people but simply preserve the monopoly on wealth and power of the bureaucratic elite, who will wear capitalist instead of Communist hats.

Yuri P. Shekochikhin, a legislator and prominent journalist with Literaturnaya Gazeta, said he is galled by the party's decision to rake in dollars instead of meeting pressing social needs.

"When Moscow is overflowing with refugees -- to a great degree through the fault of Communist Party bosses -- instead of helping solve the housing problem, the party is going into business," Mr. Shekochikhin said.

Then there's the issue of fairness within the new multiparty system. "The Communist Party has enormous property, and the other parties have basically nothing at all," he said. "Communist Party banks get registered [by the state] right away, and other banks are having big problems getting registered."

Moscow Mayor Gavriil K. Popov scoffs at the idea that the party buildings now being rented and sold are strictly party property. Until recently, he said in a television interview, the distinction between party and state property did not really exist.

"If a party chief decided that for some reason he wanted a particular building on the books of the party rather than the soviet [local government council], all it took was one phone call," Mr. Popov said.

For all these reasons, Russian Federation leader Boris N. Yeltsin called this month for a ban on commercial activity by the Communist Party. He raised the issue in a recent meeting with President Gorbachev and got a cautiously positive re


The stage has been set for a big political battle. On one side is the Communist hierarchy, which, having given up its monopoly on power in law in March, is struggling to preserve its monopoly in practice.

On the other side is the new wave of radical politicians demanding democratization and decentralization of power. Many of them, like Mr. Yeltsin, Mr. Popov and Mr. Shekochikhin, quit the Communist Party earlier this year. Others include the leaders of the new Christian Democratic, Social Democratic and other non-Communist parties.

Activists at Moscow rallies have begun demanding nationalization of Communist Party and Communist Youth League property on the theory that some of it was looted from the people and the rest can serve as compensation for the party's decades of economic mismanagement.

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