The oligarch’s revenge
Guardian Weekend Magazine – February 19, 2005 (published under the nom de plume Veronica Martin)
Vladimir Putin is master of all he surveys. It’s less than a year since he was re-elected president of Russia with an overwhelming 70%-plus of votes cast. His government is full of reliable colleagues from his old workplace the FSB security police, or ex-KGB. Parliament has gone tame. And, since last summer’s massacre of the innocents at the school in Beslan, the Kremlin leader has attacked all potential enemies or rivals harder and faster than ever. Chechnya’s separatist fighters are suing for peace (but being ignored). Putin has done away with regional elections, preferring to appoint loyal governors personally. National newspapers and TV stations bend to his will. And business is running scared.
Not everyone likes the president’s growing power. Condoleezza Rice, the US secretary of state, on her recent European tour said more than once that Russia would need to do more to show it is committed to democracy if it wants closer relations with the West. And in Russia mutterings and muted protests surface; Putin’s ratings are dropping. The poor are uneasy about his latest painful economic reforms, and the way he ignores their worries. The rich fear that he’s coming after them, and are quietly exporting their money. But no one complains aloud. Even the oligarchs the tycoons who grabbed their commercial empires under Russia’s first president, Boris Yeltsin, and used to think of themselves as the real power in the land have been silenced. Mikhail Khodorkovsky, once the richest, is in prison; his oil company, Yukos, has been dismembered and its most valuable part effectively renationalised. Today’s richest man, Roman Abramovich, is loyal to the president, and anyway spends much of his time prudently in the West. The rest are keeping mum and hoping to avoid Khodorkovsky’s fate.
Except, that is, for one man.
In faraway Britain, in the somewhat unlikely setting of a manicured Surrey estate, Putin’s lone enemy is gathering his forces. Rebel billionaire Boris Berezovsky is hoping that the power of his chequebook will be enough to strike down Russia’s latest empire-builder his own former protege, who turned on him soon after moving into the Kremlin in 2000.
Berezovsky, who made his immense fortune during Russia’s lurch into capitalism a decade ago, can’t go home while Putin is in power. He’s wanted there on a long list of charges: he is accused of embezzling $13m from his car empire, Logovaz, back in 1994; of defrauding Russia’s biggest car company, Avtovaz; of embezzling money from another former asset, the airline Aeroflot (at the time when he also controlled much of Russia’s aluminium industry, its biggest TV station and the oil firm Sibneft); and of financing guerrillas in Chechnya. For five years Berezovsky pursued Forbes magazine through western courts for libel after its reporter, the American Paul Klebnikov, suggested he had a hand in the murder of one of his own TV employees in 1995 in a tussle over advertising. The case was finally settled when Forbes accepted that the allegation was false.
Since he won asylum in Britain 18 months ago, Berezovsky has been operating from his mansion on the four-golf-course Wentworth estate near Weybridge, a house in Chelsea, a vast apartment in Belgravia and a Mayfair office. His flashier antics playfully putting on a rubber mask of Putin’s face on the way out of a London courtroom during Russia’s failed attempt to extradite him; trying, Mohammed Al Fayed style, to muscle into the British establishment; or organising a 100-limo protest in central London against Khodorkovsky’s imprisonment (making him the darling of traffic wardens, as he picked up hundreds of parking fines) mask the seriousness of his political purpose. Berezovsky is trying to publicise the Putin regime’s dubious civil rights record and thus undermine western support for it.
“I’m very surprised at how long it takes for people in the West to understand quite ordinary things,” he says. “Putin is clearly building a completely different country from Yeltsin’s Russia a return to something like the Soviet Union on a smaller scale. So I’m trying to convince western politicians to act. The price of doing so will be high. The price is also high for Russia a return to authoritarianism.”
Until recently Berezovsky was known as the godfather of the Kremlin. He says the accusations against him were maliciously laid at his door by his enemies in Russia. His own view of his fall from grace is simple and heroic. As he sees it, Russia in the 1990s was a battleground for the progressive forces of capitalist democracy (represented by him and the half-dozen other billionaire “oligarchs”) and the dark forces of reaction (nostalgic for their Soviet heyday). The reactionaries would stoop to anything to turn back the clock. In his version of events, when the KGB man Putin came to power, the secret policemen finally won. Now they are revelling in a new era of poisoned umbrellas and dirty tricks. In September 2003 the British government reluctantly endorsed Berezovsky’s claims, at least to the extent of granting him asylum.
Berezovsky’s image problem goes way back. He’s not the richest oligarch Forbes put his value, while he was still in Moscow, at a modest $3bn but he’s among the oldest and by far the keenest on publicity. His sheer flamboyance makes it easy to pin the blame on him personally for stealing a nation which is what Russia’s millions of have-nots think is the true story of the 1990s. Liberals in both Russia and the West might worry about the direction in which Putin is taking Russia, but these worries are tempered by a feeling that some counterweight was needed to the excessive liberties taken by the oligarchs in the 1990s. Berezovsky is loathed as one of those who created a form of government in which the greed of a very few men who could order politicians around and run Russia as if it were a company and they the board of directors damaged, and perhaps destroyed, a newborn democracy.
Berezovsky’s business career began innocently enough. During perestroika Berezovsky struck up a relationship with Logovaz, the firm that made the little rattletrap Zhiguli cars of Soviet days. As hyperinflation hit post-Soviet Russia, Vladimir Kadannikov, director of Avtovaz, gave him a loan to buy 35,000 Zhigulis which he was to pay back in two-and-a-half years, in roubles. By then, the rouble was worth so little that Berezovsky pocketed a cool $100m.
In 1995, he was one of the half-dozen entrepreneurs rewarded for political support of Yeltsin with an extraordinary series of sweetheart privatisation deals in which ministers sold off state assets to favourites for a fraction of their value. Berezovsky’s share of the swag was Sibneft, a newly created oil company, which he got for a whisker over $100m. Its value was later estimated at $1bn.
Berezovsky masterminded the 1996 re-election of Yeltsin for a chaotic, bedridden, vodka-soaked, corruption-tainted second term. His success, he believed, gave him carte blanche. He later boasted that seven oligarchs “controlled 50% of the economy”. His detractors say he spent the late 1990s digging himself into the Kremlin, Rasputin-style: whispering in Yeltsin’s ear, plotting, scheming, grabbing trying to privatise political power itself.
The vicious feud that became known as the “bankers’ war” of 1997 destroyed reputations; the financial crash no one saw coming in 1998 decimated fortunes. But Berezovsky, with an oil company and a TV channel, survived almost unscathed. After 1998 he began planning to install a successor to Yeltsin who would passively let him rule from behind the scenes.
The little-known Putin was appointed prime minister in 1999. Berezovsky saw his opportunity and backed this quiet newcomer to the hilt. He paid for a new party, which formed Putin’s parliamentary base and it soon became parliament’s second biggest group. But Putin turned out not to be a puppet. The two men fell out once he became president in early 2000: outwitted, Berezovsky gave up, sold up and left Russia.
Berezovsky, the archpriest of expediency, who had ruthlessly used his media power to undermine victim after political victim with allegations of vice and corruption, had become the loser in someone else’s power play. For Russians who gloated over his downfall, it is ironic to see him try to grab the moral high ground by reinventing himself as a cheerleader for democracy. But his pockets are deep. More importantly he doesn’t see a problem with backing all his protagonists’ conflicting views.
Strategy number one in his plan to oust Putin was creating a free market, human rights political party, Liberal Russia. Its members disliked the president’s growing control over civil society and the economy, as well as his brutal Chechnya policy. Yet their relationship with Berezovsky didn’t go altogether smoothly. The liberals, some former political prisoners in communist days, were nettled to discover he was also giving money to communists. And they’ve had other problems. Two of their leaders, like many Russian politicians, have been assassinated.
Strategy number two was fielding a candidate for the presidency. Ivan Rybkin was one Muscovite who took to visiting Berezovsky in 2003. An unassuming suit of a man who had progressed from pragmatic communist to soft-spoken democrat, Rybkin had been speaker of the parliament under Yeltsin. But he had also headed the unelected Kremlin governing body, the Security Council, in 1996, when Berezovsky, briefly in government, had served as his deputy. Together they’d worked on ending the first Chechen war. Rybkin was now part of Liberal Russia.
Rybkin ran for the 2004 Russian presidency, in which Putin was expected to get almost the entire vote. His backer was Berezovsky, “for several reasons”, he says: “I’d known him in the hardest of times in Chechnya, where there was a real war, yes? And we were there when people were being killed nearby, yes? I knew he was brave, and experienced, and liberal.” But Rybkin became a laughing stock when he first disappeared for days, then pulled out of the electoral race altogether. Rybkin’s Moscow mobile no longer answers.
Berezovsky’s third strategy since falling out with Putin has been to present himself as a convert to human rights causes. His Foundation for Civil Liberties is an umbrella for activists fighting state encroachments on civil society. They range from Yelena Bonner, the respected widow of the dissident scientist Andrei Sakharov and chain-smoking matriarch of today’s activists, to the wilder fringes of campaigning. But as one recipient of his largesse put it, with a laugh, “he’s no Mother Teresa”.
Among the worthy projects Berezovsky says he’s backed to the tune of $25m are support for soldiers persecuted by officers in the brutal Russian army and funding lawyers to defend child offenders, to save them from being locked up for years in TB-ridden prisons.
Berezovsky’s fourth strategy is his riskiest: playing dove to Putin’s hawk in Chechnya. Having worked on peacemaking in Chechnya between the two wars there, he knows his stuff. One of his London prot¿g¿s is the Chechen separatist Akhmed Zakayev, a dignified one-time actor who, like Berezovsky, won asylum in Britain last year. In 1996 he became Chechnya’s peace negotiator a moderate with whom moderate Russians felt they could do business. That changed with the rise of Putin and the start of the second war. On scanty evidence, Zakayev was declared a terrorist and arrested in 2002. Berezovsky paid for his lawyers, and still supports Zakayev’s work publicising Russia’s continuing war in Chechnya.
Zakayev admits that Berezovsky is more of a Chechnya dove in exile than he was in office. The negotiator who used to insist that Chechnya was part of Russia now insists, with just as much passion, that it should be independent. But Zakayev refuses to call this change of heart opportunistic: “He isn’t a man who changes beliefs because he wants revenge. He’s a man of conviction. If he says Russia must do something, he might be wrong but he’ll be sincere.”
Others are less forgiving. Berezovsky’s eagerness to fight Putin on so many fronts lays him open to all kinds of countercharges. Last year, for instance, he lent public support to the conspiracy theory which held that Putin knew a wave of bombings of Russian apartment buildings in 1999 had been carried out not by Chechen separatists, as the authorities alleged, but by the FSB (run at the time by Putin).
For this Berezovsky was accused by Moscow of sponsoring Chechen terrorists, but also, more plausibly, of “breathtaking feats of selective memory”. As Time magazine’s Moscow expert, Paul Quinn-Judge, commented, if Berezovsky was so sure that Putin and the FSB were behind the apartment bombings, why didn’t he say so at the time when he was backing Putin for the 2000 presidency?
Time has done nothing to soften Russian suspicion of Berezovsky. Elaborate conspiracy theories about his possible devious plots and ploys are still voiced on the internet and in Russian kitchens. Did he pay million-dollar ransoms for Russians and westerners kidnapped in Chechnya between the two wars, thereby creating a dirty market in the violent trafficking of people? (No, he ripostes: that’s an FSB smear; he got people out, yes, but purely by negotiating.) To some in Russia, the very fact that Berezovsky’s oil profits from Siberia rose when the second Chechen war started because oil from the Caspian region near Chechnya became harder to transport is proof enough that he must have had a cynical hand in stirring up the second conflict.
When I ask how he feels about the apparent contract killing of his journalist nemesis, Paul Klebnikov, he fulminates about Klebnikov’s lack of professionalism and writing skill. Berezovsky’s view is that he always played fair with Klebnikov, fighting the libellous American in the courts, but that Klebnikov played dirty. The dying journalist’s last words, Berezovsky says, were, “I’m an American journalist. Tell the FSB I’ve been attacked” – proof, to the Russian at least, that Klebnikov had been getting his anti-Berezovsky stories from FSB sources.
Berezovsky is far from the only Russian with a bee in his bonnet about what the ex-KGB is up to. Russia’s few remaining liberals are so scared about the way FSB power is growing that the commentator Masha Gessen recently nicknamed the country “Paranoiastan”. Yet thinking the same way as Berezovsky hasn’t made the freedom fighters of Paranoiastan learn to love the oligarch who supports their causes. He’s regarded as, at best, only an accidental good guy. If Berezovsky can’t even get liberals who think the same way to show public enthusiasm for his projects, there seems little chance that he could win hearts in the sprawling, conservative Russian provinces.
So should Putin worry about the hate campaign from over the water? Probably not but that doesn’t mean Berezovsky won’t go on trying to unseat him. The one thing no one’s accused the oligarch of is failing to think big enough. He isn’t applying for British citizenship, because he’s optimistic that he will soon go home to a Putin-free Russia, in which democratic pluralism can flourish as, he says, it did in the Yeltsin years.
When I ask if he might even dream of taking on the presidency himself, Berezovsky says no: “Why would a rich man want a job in politics?” Then a wistful goodbye-Surrey, hello-Kremlin look steals into his eyes. “Look, I’d much prefer to organise my own day than have the country organise it for me but if it had to be done, and no one else could do it, I wouldn’t rule it out.”