Jailed financier elected to Russian parliament

November 01, 1994|By Will Englund | Will Englund,Moscow Bureau of The Sun

MOSCOW -- The government says Sergei Mavrodi stole the investments of millions of Russians. But nobody wants to believe it, and just to show how much they like the guy the citizens of a Moscow suburb have elected him to parliament.

Three months ago Mr. Mavrodi was riding high as head of the MMM investment company, which promised a 3,000 percent annual return and whose stock was doubling in price seemingly every week although no one ever found out what it was investing in.

Then the share price came tumbling down to less than 1 percent of its former value, and soon Mr. Mavrodi was in jail on tax evasion charges.

But the people who had lost their money in MMM (and there may have been as many as 10 million of them) blamed the government and not Mr. Mavrodi for their misfortune.

So when a seat became open in the State Duma, Mr. Mavrodi became a leading candidate. And according to results announced yesterday, he won 27.8 percent of the vote Sunday, easily outdistancing the rest of the 12-candidate field.

Mr. Mavrodi's opponents included a prominent though less flamboyant businessman as well as a fascist whose stiff-armed cadres terrorized campaign meetings and sent shivers of fear through the liberal press.

Going into the campaign, the 39-year-old Mr. Mavrodi did face certain handicaps: He was in jail, and even after the government let him out Oct. 13 he wasn't allowed to travel outside Moscow to campaign personally in the district.

But a lot of voters found it hard to resist his promise to spend $10 million of his own money to help fix up the district, which is centered on the town of Mytishchi to the north of the capital.

Beyond that, it appears that his support can be attributed to either soft-heartedness or hard-nosedness, or perhaps a combination of the two.

The soft-hearted explanation is that sympathetic voters were showing their disapproval of the government's attack on him and want to see him stay out of jail. (Members of the Duma are exempt from criminal prosecution.)

The hard-nosed variant has it that MMM investors want their money back and figure the company is more likely to recover with Mr. Mavrodi making policy in the Duma than if he's making widgets in prison.

Indeed, after the results of the vote became known, MMM announced that it was reopening its offices in Moscow and other cities today. Shares that once reached a price of 125,000 rubles, and then fell to 1,000 rubles, were trading yesterday at 4,300 to 5,300.

The tax police say they would like to continue their case against him, but they may need the parliament's approval to do so.

Mr. Mavrodi never has been convicted of a crime, and he was more than honest in his campaign for office: He said he wanted to become a legislator to help guarantee the stability of his own company.

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