Going by today's news releases from various agencies we learn that Vladimir Gusinsky, one of Russia's leading oligarchs and press barons, has been placed on the "wanted" list by the prosecutor-general yesterday. This means he is likely to be arrested the moment he returns to Russia.
As you read the very transparent book review below, please keep in mind that Gusinsky, as well as his adversary, Boris Berezovsky, are dual citizens of Israel where much of the loot described below is likely to end up.
Here is the book review by the New York Times, dated October 13, 2000:
BOOKS OF THE TIMES
A Tycoon's Meteoric Rise After Russia's Collapse By RICHARD BERNSTEIN
GODFATHER OF THE KREMLIN: Boris Berezovsky and the Looting of Russia. By Paul Klebnikov. Illustrated. 400 pages. Harcourt. $28.
It would be hard to judge post-Soviet Russia a resounding success, afflicted as it has been by organized crime, corruption and a kind of Grand Guignol politics presided over by the brilliantly erratic Boris Yeltsin, recently retired from the scene. But few writers have portrayed the Russia of the last decade in starker terms than Paul Klebnikov, a reporter for Forbes magazine, does in his effectively angry new book, "Godfather of the Kremlin." In it Mr. Klebnikov details what he describes as a kind of criminal-gang capitalism, abetted by both murder and official corruption, that has resulted in the virtual expropriation of large portions of Russia's economy and political system.
Mr. Klebnikov's main, but not exclusive, subject is Boris Berezovsky, a former member of the Soviet Academy of Sciences who has amassed a fortune in television, oil and gas exports, aluminum smelting and other industries.
Among the many examples that Mr. Klebnikov provides of the way Mr. Berezovsky built his empire is this one: in 1994, encouraged by Mr. Berezovsky, President Yeltsin signed a decree privatizing Channel 1, Russia's most important television network. Control of the network was contested by two men, Mr. Berezovsky on one side and a rival businessman, Vladimir Gusinsky, on the other. Mr. Klebnikov quotes one prominent figure, Aleksandr Korzhakov, who was the head of Mr. Yeltsin's presidential security service, as saying after he was dismissed from that post that at several meetings Mr. Berezovsky tried to persuade Mr. Korzhakov "to organize the assassination of Gusinsky," an allegation Mr. Berezovsky denies.
Mr. Gusinsky, a banker and media magnate who was Mr. Berezovsky's chief business rival, was not killed, but one day, on his way to work in his usual entourage of cars protected by a dozen armed bodyguards, he was involved in what came to be called the "Faces in the Snow" incident. Suddenly, his cortege was surrounded by unmarked vehicles driven by members of the Russian security police who were operating, Mr. Klebnikov says, under Mr. Korzhakov's orders. The security police, in combat gear and wearing face masks, forced Mr. Gusinsky's bodyguards to lie face down in the parking lot before taking them to the police station, where they were charged with illegal weapons possession.
Mr. Gusinsky was not taken into custody, but he soon left Russia for three months. Mr. Klebnikov does not specify the reasons for his departure, and the whole episode, like so much in Russia, remains a bit murky. But Mr. Klebnikov reports that after the incident some of Mr. Gusinsky's sponsors in the government were dismissed from their posts, and there were rumors of a movement to have Mr. Gusinsky himself arrested and put on trial, possibly on weapons charges. In any case, with Mr. Gusinsky absent from the scene, Mr. Berezovsky ended up in control of the privatized television station.
There is much more to this story in Mr. Klebnikov's detailed account, including the still unsolved assassination of Vlad Listyev, Russia's most successful television producer and another figure involved in the contest to control Channel 1. And the story of Channel 1 is only one of several in which Mr. Klebnikov depicts Mr. Berezovsky gaining control of major Russian enterprises. These takeovers, moreover, were punctuated by assassinations, most of which have never been solved. The takeovers were facilitated, the author writes, by Mr. Berezovsky's close relationships with the top leaders in Moscow, including Mr. Yeltsin, former Prime Minister Viktor S. Chernomyrdin, and Russia's current president, Vladimir Putin.
"In its scale and rapaciousness, the looting of the state that took place during the Yeltsin regime was unprecedented," Mr. Klebnikov writes in his conclusion. "It was, perhaps, the robbery of the century."
He cites one liberal Russian parliamentary leader, Grigory Yavlinsky, on the nature of the Yeltsin years: "The government that was formed was without any clear ideology. It was based solely on personal greed. You got a system that was corporatist, oligarchic and based on monopolized property rights and semicriminal relationships."
Certainly Mr. Klebnikov's picture of Russia since the fall of Communism is far more relentlessly negative than most official views, including that of official Washington. That view is essentially that the country, though afflicted with serious problems, is on the right track, as a genuinely reformist government brings it toward a democratic, free- market system. Mr. Klebnikov acknowledges in the book's introduction that Forbes magazine, in which some of his allegations appeared earlier, is being sued by Mr. Berezovsky, who contends that they are not true.
It would take a more expert critic than I am to adjudicate among various analyses of Russia and between the author and Mr. Berezovsky. But Mr. Klebnikov names some insider sources for some of his information, and his book generally seems too well informed to be ignored.
He is a resourceful investigative reporter who uncovers important parts of the interlocking network of banks, industrial enterprises and Swiss holding companies set up by Mr. Berezovsky and others to capture large shares of Russian wealth. He examines the critical role of what he describes as a Chechen mafia in providing a great deal of the muscle employed in criminalized capitalism, and he demonstrates the close contacts between Mr. Berezovsky and the leaders of the Chechen rebellion against Russian rule.
He not only gives a richly detailed account of the emergence of a new Russian oligarchy, but also provides two other essential ingredients in the picture. One is the background to Russia's version of robber capitalism, which Mr. Klebnikov interestingly traces to a vast program by the K.G.B. "to transfer billions of dollars of Communist Party capital to captive companies in the Soviet private sector and abroad."
The second ingredient traced by Mr. Klebnikov is the human costs of Russia's economic failures. The gravest problem with the rise of Mr. Berezovsky, in Mr. Klebnikov's persuasive view, is that he specialized in seizing already existing enterprises and draining them of their resources, rather than creating new enterprises and new wealth. The author effectively refutes the frequently heard view that the new Russian billionaires are similar in nature to the old American robber barons, dislikable and ruthless but essential in creating the bases for a vast economic expansion. "Berezovsky's most destructive legacy," Mr. Klebnikov writes, "was that he hijacked the state for his private interests."
Mr. Klebnikov, to show what this means, offers a brief but telling portrait of the lives of the new Russian elite, one almost worthy of Thorstein Veblen and "The Theory of the Leisure Class." "As they traveled West," he says of their trips to their homes in the South of France, "they eagerly forgot about the tens of millions of Russians they were leaving back home that same broken mob, complaining, drinking and dying."
Mr. Klebnikov remembers one of the forgotten, a mother on a train taking home her painfully ill 7-year- old son after having failed to get treatment for him in Moscow. The boy's cries had echoed in the train all night and when he finally fell asleep in the morning, Mr. Klebnikov remembers seeing his mother "sitting in the corridor alone, gazing blankly at the passing Russian landscape."
Economic actions, including both legal and illegal ones, have consequences, and it is one of the virtues of Mr. Klebnikov's book that he shows with graphic particularity what some of them in Russia were.
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Thought for the Day:
"I have eaten your bread and salt,
I've drunk your water and wine.
The deaths ye died
I have watched beside,
And the lives ye led were mine."
(Rudyard Kipling)
Back to Table of Contents of the Nov. 2000 ZGrams