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Russian pyramid victims hit government

By STEVEN GUTTERMAN

MOSCOW, Aug. 28 -- Victims of last month's crash of Russia's MMM investment fund began gathering signatures Sunday for a referendum to oust the government, which many blame for the collapse of the reputed pyramid scheme and the financial woes of its shareholders. An organization that purports to speak for thousands of bearers of vastly devalued MMM shares, the Union of Defense of the Rights of MMM Shareholders, hopes to collect the 1 million signatures required to hold a nationwide vote of no-confidence in the government. 'It will be very simple to gather the signatures,' a member of the union said. 'We have people coming in from many Russian regions.' Disgruntled shareholders have signed several similar petitions since they lost their money when the company-set share price dropped by 100 percent late last month, but this time the shareholders' organization claims to have filled out all the official forms necessary to force a referendum. If they do get the required 1 million signatures, the government of Prime Minister Viktor Chernomyrdin would be obliged to step down only if half the eligible voters in Russia showed up at the polls and voted for its ouster. While that outcome is unlikely, the threat of a no-confidence referendum is a new headache for Russia's leaders just when they appear to have opened up a good distance between themselves and the nationalist and pro-Communist opposition. The threat comes at a time when Russian President Boris Yeltsin and his government are tacitly toasting the benefits of a splintered opposition and publicly declaring that the country has emerged from the turbulence of recent years and is in for a stretch of smooth political and economic sailing.

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Burned MMM shareholders have tended to blame the government for their troubles, saying the authorities interfered and created a share-selling panic by floating accusations against MMM President Sergei Mavrodi and then imprisoning him on charges of tax evasion. But some say the leadership of the shareholders union organizing the referendum is just using victimized shareholders as a base for personal political ambitions. These observers cite reports linking union chairman Viktor Poluetkov with nationalist opposition figure Alexander Rutskoi, the former vice- president whose defiance of Yeltsin led to bloodshed last October. Whatever its motivation, the referendum campaign means that whether or not Russia's leaders are to blame for the risky investment decisions of the nation's newly capitalist population, they will not be able to wash their hands of the MMM scandal as easily as they had hoped. Despite attempts by various government bodies to rein in Russia's securities market, the effects of their initial failure to do so may resound in both financial and political circles for months or years to come. While Mavrodi sits in his cell in Moscow's Matrosskaya Tishina (Sailor's Rest) prison, trade in MMM 'securities' -- colorful pieces of paper that feature a portrait of the bespectacled inmate -- continues. An epochal TV and print advertising campaign continues in full force, and shares are gradually regaining lost value in lively action at the buying and selling points that reopened last week. MMM has promised to resume payouts to elderly and needy shareholders Monday, and the company's epochal TV and print advertising campaign has raged on tirelessly throughout the scandal.

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