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Mr. Bigsky

After observing Boris Berezovsky in Moscow for several years and meeting him once or twice, I found I rather liked him. And I suspect from the fascinated tone of his book that Paul Klebnikov does too, notwithstanding the part he considers his subject to have played in hijacking the government of Russia over the past ten years, wrecking its industry, poisoning its public morals, and so on.

There is plenty in that argument, and it would be misleading to suggest that Boris Berezovsky could, by any stretch of the imagination, be described as a nice man, at any rate in his professional life. Russia is not a nice place. And, as Klebnikov records, Berezovsky gravitates to corners of it that are lawless and violent even by Russia’s standards—the car industry and the aluminum industry, for example, and Chechnya, where he has been involved in ransoming hostages. Nice men do not take on a fight with the Solntsevo mafia, which wanted to run him out of the car dealerships from which he made his first fortune; or with Anatoly “the Bull” Bykov, who was let out of prison in August of this year having seemingly conceded defeat to Berezovsky and associates in his fight to control Siberia’s great Krasnoyarsk aluminum smelter; or with Alexander Korzhakov, the ex-KGB general whose place in the Kremlin Berezovsky usurped as Boris Yeltsin’s chief courtier.

But at least with Berezovsky there is another side to his character. He is a clever, well-educated, sophisticated man, proof that brains count for something, even in what seems a brutish world. Before reinventing himself in the early 1990s as an aggressive force in New Russian business, he had spent twenty-five years in Soviet universities as a high-powered mathematician. He saw how to make and take money from the collapsing state, and he saw how to use that money to manipulate his country’s politics and so produce yet more money for himself. He can charm practically anyone when he wants to, and he can terrify most people too. “I literally felt that he could kill me,” George Soros said after an argument with him.1

He must still have a billion or two dollars in the bank, even if the political foundations of his fortune have gotten a lot shakier since Yeltsin left office. He still has a lot of friends in high places. You probably do not want him for a partner, and you certainly do not want him for an enemy. But for sheer narrative value he is irresistible. Klebnikov has chosen wisely.

1.

Klebnikov is an American journalist from a Russian émigré family. His book has its origins in a profile of Berezovsky he wrote four years ago for Forbes magazine.2 That piece was called “Godfather of the Kremlin?” and Klebnikov has merely dropped the question mark for the title of his book.

The Forbes piece identified Berezovsky, previously a relatively obscure figure, as possibly “the most powerful man in Russia,” and certainly one of the richest. The article described the origins of his fortune in Russia’s heavily criminalized car-dealing business. It tried to link him, on circumstantial evidence alone, to the assassination of a prominent journalist who was obstructing his takeover of Russia’s main television station. It explained his preferred way of adding to his empire. He rarely invested much capital in buying companies’ shares; instead he found ways to capture control of their management—including joint ventures, political pressures, and personal payoffs—and with it control of company revenues.3 It suggested that he might be starting to use this method on Aeroflot, Russia’s biggest airline.

Berezovsky was, moreover, “a powerful gangland boss,” said Klebnikov. He loomed “like a giant shadow in this violent world”: so violent that Forbes claimed a need to publish the piece anonymously. This last was an odd touch, since Berezovsky knew very well who had written about him. Klebnikov had interviewed him three months earlier. When Berezovsky responded with a libel suit filed in London, he said, “The Forbes article should have been labeled as fiction. It is constructed on falsehoods and mean-spirited assertions…. I deeply resent being falsely accused as somebody who would ever physically hurt someone. I know who Paul Klebnikov is and I know what he wrote and he has nothing to worry about…. However, I do expect Forbes to retract the story and apologize to those it has hurt.”

Forbes has refused. The legal proceedings so far have consisted of preliminary arguments about whether an English court should have the right to hear the case at all. Berezovsky says he wants a trial in London because he has suffered damage to his reputation in England. Others presume he is aware that libel is easier to prove in England than in America, and damages are often higher. Forbes has been objecting that only a tiny fraction of its print run is sold in England, so a trial there is inappropriate. But the argument has gone Berezovsky’s way, and the case looks set to be decided in London next year.

So it is, in the circumstances, a bold gesture on the part of Klebnikov and his publishers to have gone ahead with this book. Doubtless there will be many lawyers in London among its readers. They will find it contains a portrait of Berezovsky more searching and considered than time and space allowed the author the first time around. It gives, therefore, a richer picture of the Russian business world in the 1990s, and, indeed, it contains some of the best reporting I have seen from that strange world. As far as I can tell, Klebnikov stands by his facts, where they can be identified reliably as such. (This can be hard to do in Russia: not for nothing do the Russians have a saying, “He lies like an eyewitness.”) But he recasts and rethinks some of his deductions and assertions. He has become more understanding of the environment in which Berezovsky has been operating. And thus, almost inevitably, he becomes in some respects more understanding of Berezovsky’s methods.

Notably, he does not repeat in this book his straightforward 1996 description of Berezovsky as “a powerful gangland boss.” Rather, he shows Berezovsky as a businessman who makes use of gangland muscle when he has to. In the car trade especially, the competition could be lethal. Dealers enjoyed margins of almost 100 percent on the rickety Zhiguli sedans that they sold, and customers paid in cash. Those factors made the business especially attractive to criminals, who fought to monopolize it. In 1993 a shoot-out between rival gangs outside Berezovsky’s main showroom left three men dead and six wounded. A year later Berezovsky was almost killed by a car bomb, which decapitated his chauffeur. Klebnikov writes that his fortune “made him a target for organized-crime groups. He would not survive in this business unless he could protect his gains physically.”

By 1996, which is to say, by the time of Klebnikov’s earlier profile, Berezovsky had turned his attentions from the car industry to the media, taking control of Russia’s main national television station and buying several newspapers. He was thinking big. He wanted the media properties for the leverage they would bring him over the government. Klebnikov credits him with a new respectability of sorts:

Berezovsky’s media empire meant that he no longer had to sur-vive in the squalid, bloodstained struggles that characterized the auto-dealership business. He had emerged as the supreme oligarch, first among equals in the Russian business world.

Klebnikov’s book contains much new detail and adds many nuances to his work of four years ago. His main new contribution is his investigation into Berezovsky’s relations with Aeroflot, which were still taking shape in 1996. Klebnikov alleges that Swiss firms controlled by Berezovsky, under the guise of running “international treasury operations” for Aeroflot, were, at least until 1998, intercepting hundreds of millions of dollars in Aeroflot’s foreign-currency revenues, investing the money on their own account, and lending Aeroflot rubles at usurious interest rates to cover the deficit.

The Russian authorities have been on the same trail, with mixed results. The first prosecutor to handle the case, Yuri Skuratov, who was in charge of several other controversial investigations, resigned last year soon after ordering raids on several Russian companies linked to Berezovsky. Apparently he was under pressure to go no further. A second prosecutor, Nikolai Volkov, persuaded the Swiss authorities to raid the offices of the firms there linked to Berezovsky. In July the Swiss sent crates of seized documents to Moscow. In August Volkov also resigned, under pressure from people that he declined to name.4

2.

Klebnikov insists in his introduction that he has not sought to write a full-scale biography of Berezovsky, but rather to describe, in the words of his title, “the looting of Russia,” with Berezovsky as his looter-in-chief. Still, I wish he had found time to give Berezovsky’s early life more attention. The looting of Russia is a fairly well documented affair by now, at least in its political and its financial aspects. As Chrystia Freeland shows in Sale of the Century, the best general book on that subject to date, the story in brief is that the wealth of the state was up for grabs, and, human nature being what it is, people grabbed it.

The continuing mystery lies in the character of the oligarchs themselves, and their origins. What made them alone capable of doing what they did? In the case of Berezovsky, what turned the mathematician of 1986 into the “looming shadow” of 1996? Why would he fall out sooner or later with every person he dealt with—including, most recently, Vladimir Putin? What stops him, even now, from consolidating his business interests while he is still alive and rich, and retiring behind high walls in the south of France?

I imagine these are questions that interest Klebnikov too. No doubt he would have asked Berezovsky about these and other subjects had Berezovsky been willing to speak to him. But the source notes list no author’s interview with Berezovsky later than September 1996. Klebnikov makes do with interviewing people who have had dealings with Berezovsky, and who produce several pithy insights.

Berezovsky’s gift for business relations is well summed up in the view of one “Colonel Streletsky,” an officer in the presidential security service, who tells Klebnikov: “For Berezovsky, people are divided into two categories: a condom in its packaging and condom that has been used.”5 There are, in other words, no enduring alliances for Berezovsky. He takes a quantitative approach to making friends and buying influence. He spreads his favors widely at the start of any contest, and shifts his loyalties readily in the course of it. He wants to have around him a good supply of usable people. His skill lies in playing his protégés off against one another, with victory going to the one who, by the end, is obligated to him the most.

  1. 1

    George Soros, “Who Lost Russia?,” The New York Review, April 13, 2000, p. 14.

  2. 2

    Godfather of the Kremlin?” Forbes, December 30, 1996.

  3. 3

    Berezovsky began his business career by drawing the management of Avtovaz, the country’s biggest car maker, into a joint venture providing computer services to the Avtovaz plant. The joint venture, Logovaz, changed its vocation within months to become the biggest retailer of Avtovaz cars: the cars came out of Avtovaz, the money went into Logovaz. In 1995 Berezovsky and associates took control of Russia’s biggest television station, ORT, by persuading the Yeltsin government to sell them a minority shareholding at a near-nominal price, and at the same time assign them the commercial running of the station. Berezovsky bought control of Sibneft, his oil company, which he has since sold, at the knockdown prices prevailing in the “loans for shares” auctions of 1995-1996.

  4. 4

    Volkov was also urging Swiss authorities to look into the possible diversion there of money lent to Russia by the International Monetary Fund. His resignation may have been related to political pressures surrounding this case.

  5. 5

    Watching Berezovsky’s recent grapplings with Putin, one might add a third category here: a condom whose packaging Berezovsky finds he cannot open at the necessary moment.

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