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Russia Report: August 13, 2003

13 August 2003, Volume 3, Number 32
By Jonas Bernstein

Last year, when the film "Oligarkh" was released in Russia, its director, Pavel Lounguine, told "The Moscow Times" that his work is "an attempt to understand history" because "the epoch of the oligarchs is finished." It might have looked that way then, with Boris Berezovskii in his second year of exile and President Vladimir Putin's "managed democracy" seemingly sailing through smooth political waters. But as the last six weeks have shown, Berezovskii's fall from political grace was merely the opening act in a Kremlin-versus-oligarchs epic. Indeed, the current travails of Yukos CEO Mikhail Khodorkovskii give fresh relevance to "Tycoon," as the English-subtitled version of Lounguine's film is called.

However, a warning is in order. Filmgoers who have little or no familiarity with Russia's recent political past might have trouble figuring out exactly what's going in "Tycoon," which is based on the book "Bolshaya Paika," or "The Big Slice," written by Yulii Dubov, director of Berezovskii's LogoVAZ auto company. That's partly due to the fact that, beyond being your garden-variety morality tale of power, money, and fall from grace, the film -- which chronicles the career of Platon Makovskii, its Berezovskii-like protagonist (played by Vladimir Mashkov) -- presents a melange of some of Russia's more Byzantine real-life corruption scandals. Indeed, one gets the feeling that Lounguine and Dubov, who helped adapt the screenplay from his book, deliberately sprinkled it with arcane references to Yeltsin-era scandals as a kind of wink to the power brokers and political cognoscenti they thought likely to attend the film's opening.

Not surprisingly, there are clear references to the scheme Berezovskii used during his "primary-accumulation" phase, which involved purchasing Lada cars from the state's AvtoVAZ manufacturer at a discounted for-export price and then selling them at home for the considerably higher domestic price. There are also allusions to the duty-free import-export privileges that former President Boris Yeltsin gave organizations like the National Sports Fund and various disabled Afghan War veterans groups, turning these "charities" into multibillion-dollar cigarette-and-booze operations wracked by murderous turf battles. One of the film's memorable baddies, Colonel Belenkii, is an Afghan War amputee clearly modeled on Valerii Radchikov, a military-intelligence reserve colonel who headed one of the disabled-veterans groups. Radchikov, who was accused of killing 14 people in a bombing of business rivals attending a November 1996 memorial service at Moscow's Kotlyakovskoe Cemetery, died in a mysterious car accident in January 2001.

The film also includes a scene based on the 1998 real-life episode in which ORT television, which was then controlled by Berezovskii, aired hidden camera footage of "a person resembling" then-Prosecutor-General Yurii Skuratov cavorting in bed with two prostitutes. But perhaps the film's ultimate political inside joke is a cameo appearance by Vladimir Semago, a former State Duma deputy who was known as the "Red businessman" for combining entrepreneurship -- he ran an elite Moscow club and bank -- and Communist Party membership. Semago, who claimed he was paid $5,000 in 1998 to vote for Viktor Chernomyrdin as prime minister, once memorably declared that the people prosecuted for corruption in Russia are "not those who steal, but those who don't share." Interestingly, Semago told "Izvestiya" earlier this year that he was planning to make a film of his own about the 1998 economic collapse.

In addition to its obscurantist tendencies, "Tycoon" employs a narrative structure featuring frequent flashbacks to Makovskii's early days as a mathematician and perestroika-era businessman. This makes the story line that much more difficult to follow.

But the film's real sin, in the opinion of this reviewer, is that it makes its main character rather more attractive than his real-life counterpart -- and I don't mean just Berezovskii here, but the oligarch as a type. It's not simply the fact that casting Mashkov in the lead role means that Makovskii is considerably more handsome than the real-life oligarchs, although looks aren't everything, as this reviewer can attest to, having once seen one of the ugliest of the "Group of Seven" tycoons in the company of one of the most beautiful women imaginable. It's that even though the film purports to chronicle how Makovskii loses his soul, he still winds up looking not all that bad, at least compared to those around him -- more Ostap Bendar than Michael Corelione, more "velikii kombinator" than cold-blooded killer. Indeed, while the film is not without its murders, it does not fully convey the amount of bloodshed that by all accounts -- except the official ones -- accompanied Russia's "redistribution of property" during the 1990s.

What is more, Makovskii always manages to maintain an air of cool superiority and contempt even when facing dangerous potential foes like Koretskii, the Kremlin official who is both a politically retrograde "gosudarstvennik" and corrupt, or Lomov, the thuggish Siberian governor whom Makovskii wants to make president. But if Makovskii is modeled on Berezovskii, that coolness-under-fire image is a bit of a stretch. One need only recall former presidential security-service chief Aleksandr Korzhakov's descriptions of Berezovskii's obsequiousness when asking him for favors -- some of them, if Korzhakov is to be believed, highly illegal in nature. Then there's Berezovskii's deer-caught-in-the-headlights expression when he was interviewed after Moscow police raided LogoVAZ's offices following ORT General Director Vladislav Listyev's murder in 1995.

That the fictional oligarchs are rendered more appealing than the real ones is not surprising, given Yulii Dubov's role in developing the film's screenplay. He is, after all, an interested party who, together with Berezovskii, is wanted in Russia for allegedly defrauding the Samara Oblast administration in 1994-95 (the Samara Oblast city of Tolyatti is home to AvtoVAZ).

The film succeeds best in recreating the look and atmosphere of specific periods in Russia's modern history. The flashbacks to the perestroika era of quasi-legal cooperative businesses -- which depict, among other things, Makovskii and his buddies making and selling stonewashed jeans -- are done with verisimilitude and subtlety. The conspicuous consumption of Makovskii's later years is also rendered effectively, especially in the scene depicting his 44th birthday party, replete with fireworks, llamas, Gypsy singers, and greetings from the president of Tajikistan. In another memorable scene, Makovskii and Leri (a character clearly based on Berezovskii associate Badri Patarkatsishvili) scare off a group of Tolyatti bandits challenging their bid to control cars coming off AvtoVAZ's assembly line simply by having their "krysha," a small, white-haired Uzbek, show up for a talk.

Several years ago, this reviewer saw Berezovskii and his entourage as they left a trendy downtown Moscow restaurant and got into their fleet of waiting Mercedes. The convoy illegally turned left onto Tverskaya Ulitsa and drove down it in the wrong lane, against traffic, for about 50 meters before turning off. Less than a year later, Berezovskii was in self-imposed exile in London.

So turns the New Russia's wheel of fortune. After Khodorkovskii, who's next?

Jonas Bernstein, who edits the American Foreign Policy Council's "Russia Reform Monitor," worked in Russia as a journalist from 1992 to 2000.

By Robert Coalson

The world has grown accustomed to hearing about the new era of stability in Russia that was ushered in when the popular President Vladimir Putin took over from his largely discredited predecessor, former President Boris Yeltsin, at the beginning of 2000. Therefore, it was particularly surprising when, as the Prosecutor-General's Office's investigations into oil giant Yukos unfolded over the last few weeks, senior government officials and leading members of the political elite began warning of the looming danger of a descent into civil war.

Among the first to use this term -- which has particular potency in a country that was wrenched by a bloody and pitiless civil war less than a century ago -- was presidential economic adviser Andrei Illarionov. "If we begin now to review privatization, it will not be easy to stop that process and it is possible that such actions could lead to a new civil war," Illarionov said on Ekho Moskvy on 14 July. "It is easy to open Pandora's box, but very difficult to close it." Later in the same interview, he repeated that reviewing privatization would "certainly lead to a second civil war."

Others offered similar prognoses. Saratov Oblast Governor Dmitrii Ayatskov said on 1 August that reviewing privatization would "return Russia to a totalitarian system and, possibly, spark a civil war on its territory." Presidential Human Rights Commission Chairwoman Ella Pamfilova told "Moskovskie novosti" that doing so would "start a chain reaction." Krasnodar Krai Governor Aleksandr Tkachev told "Rossiiskaya gazeta" on 5 August that he believes the country is facing a crisis of mistrust. "Today we live in a fragmented society. I have the feeling that we still have not returned from the barricades, from the front lines of the Civil War," Tkachev said. "The atmosphere of enmity, of mistrust of one another, in which we are living is destructive. It is ruining the country and ruining people's souls."

The civil-war theme received its lengthiest development in a much-discussed open letter published by self-exiled former oligarch Boris Berezovskii in "Kommersant-Daily" -- which he owns -- on 24 July. In that letter, Berezovskii said that revising privatization and nationalizing or redistributing private property would lead to a civil war, just as it did following the 1917 Bolshevik coup. The danger of sparking a civil war "comes from the president personally," Berezovskii charged.

In a long rebuttal to Berezovskii's letter published in the government daily "Rossiiskaya gazeta" on 6 August, Vitalii Tretyakov -- who formerly worked closely with Berezovskii when he was the editor of the tycoon's "Nezavisimaya gazeta" -- wrote intriguingly that Berezovskii is wrong in saying that there was no civil war following the 1990s redistribution of property via privatization. "There was a [civil] war," Tretyakov wrote. "and it is still not finished today. It is just that unlike the Civil War of 1918-20, this war is a cold war that, for many reasons, has not broken out into national fighting." Tretyakov does not object to Berezovskii's assertion that there is a real danger of civil war, but argues that the danger stems not from Putin but from "the irresponsible Russian elite that has taken everything and left the people nothing."

Playing the civil-war card seems to be becoming something of a pre-election tradition in post-Soviet Russia. In April 1996, a group of leading financiers -- including Berezovskii, Vladimir Gusinskii, Vladimir Potanin, Mikhail Fridman, Leonid Nevzlin, and Mikhail Khodorkovskii -- issued an open letter warning that the looming presidential contest between Yeltsin and Communist candidate Gennadii Zyuganov could spark a civil war and undo "the achievements, won through sufferings, of the last decade." "The acrimony of opposing political forces is so great that either of them can rule only by embarking on the road toward civil war and the disintegration of Russia," the oligarchs warned. Their decidedly undemocratic solution was for Yeltsin and Zyuganov to come to some compromise settlement behind closed doors so that election day will not become "the day of the beginning of the Russian civil war." Reading this letter today really makes one wonder just how far Russia has come in the intervening years.

In the days before the second round of voting, moreover, Russia was blanketed by posters and leaflets warning that a Communist victory would mean a return to totalitarianism, hunger, and civil war.

The reemergence of this potentially dangerous tactic now in the run-up to the December Duma elections and next spring's presidential election raises the question of whether the country's post-Soviet political system has put down any roots at all. In her "Moskovskie novosti" interview, Pamfilova placed blame directly on the so-called oligarchs. "They thought they were untouchable, so they didn't need to pay attention to developing social institutions, to social development and the well-being of the entire society, to human rights," Pamfilova said. "All these years they tried to build a system of power that served only their interests. And now they are horrified to find out that that system is rotten to the core and incapable of defending even them."

There does indeed seem to be a strong current of latent hostility among the Russian population toward those who have benefited most from the post-Soviet reforms. A ROMIR polling agency survey released on 28 July found that 77 percent of respondents have a negative view of the role the oligarchs are playing in Russia today. RBK commented on 6 August, "The average Russian, it seems, is convinced that privatization was so unjust that he is ready to do anything to correct that injustice." Manipulating that hostility -- or threatening to manipulate it -- as part of an election or business strategy is certainly a dangerous game. Yukos head Khodorkovskii seemed to be walking a very fine line last month when he hinted that his company could leave up to 50 Russian regions without heat this winter, just as a reputedly Kremlin-connected political analyst was playing with fire when he announced on 29 July that he will ask the Constitutional Court to rule on the legality of the 1990s privatizations.

Echoing Pamfilova, a group of leading political analysts wrote in "Moskovskie novosti," No. 30, that the Yukos investigations have plainly revealed "the absence of legal and structural mechanisms for defending the market and political liberty from encroachments on the part of the traditionalist parts of the executive branch." "Our system contains no mechanisms to protect Russia from moving backward and simultaneously to facilitate the settlement of dramatic social problems...through the formation of new relations between the authorities, business, and society."

The combination of widespread disenchantment and a system that offers no mechanisms for alleviating them means that Russia will continue to lurch from crisis to crisis for some time to come. And the worst of these crises will be elections. The less democratic the country's election process is, the more real the danger of other avenues of political expression will become.

Robert Coalson is an editor for "RFE/RL Newsline."

In accordance with a Yeltsin-era presidential decree that requires government officials to make available information about their income and property, the weekly "Argumenty i fakty," No. 30, asked Prime Minister Mikhail Kasyanov and members of his cabinet to supply their personal financial information. According to the weekly, all of the ministers saw their incomes jump -- although few were as fortunate as Deputy Prime Minister and Finance Minister Aleksei Kudrin, who saw his declared income jump seven times between 2001 and 2002. At first glance, it appears that the few women in the poll earn considerably less than the men. The weekly explained that deputy prime ministers earn annual salaries that are a lot lower than those of ordinary cabinet ministers. For example, former Deputy Prime Minister Valentina Matvienko earned only 161,106 rubles ($5,300) compared to Energy Minister Igor Yusofov, who earned 188,600. Of course, that would not explain why Deputy Prime Minister Viktor Khristenko earned more than double Matvienko's salary. JAC

Government official___________________________Annual income 2002*

Prime Minister Mikhail Kasyanov______________________979,200 rubles
Finance Minister Aleksei Kudrin_____________________1,098,559 rubles
Minister for Science and Industry Ilya Klebanov__________420,232 rubles
Deputy Prime Minister Viktor Khristenko_______________385,504 rubles
Agriculture Minister Aleksei Gordeev__________________394,199 rubles
Economic Dev. and Trade Minister German Gref_________356,900 rubles
Energy Minister Igor Yusufov_________________________226,800 rubles
First Deputy Labor Minister Galina Karelova**___________206,872 rubles
Deputy Prime Minister Valentina Matvienko***___________161,106 rubles

Source: "Argumenty i fakty," No. 30., 2003

* Includes bank-deposit interest and other income
** Was later appointed deputy prime minister
*** Was later appointed presidential envoy to the Northwest Federal District

OUT: Prime Minister Kasyanov signed an order on 5 August dismissing Deputy Energy Minister Viktor Kudryavyi from his post, "Kommersant-Daily" reported the next day.

IN: Deputy Prime Minister Boris Aleshin has been appointed to co-chair the Russian-Uzbek intergovernmental commission on trade and economic cooperation, ORT reported on 7 August.

OUT: Prime Minister Kasyanov has relieved Yevgenii Arefev from his position as deputy director of the government apparatus because he has reached retirement age, "Kommersant-Daily" reported on 9 August. Arefev was appointed first deputy head of the apparatus in June 1999 by then-Prime Minister Sergei Stepashin, according to on 23 June 1999. According to "Moskovskie novosti," No. 9, Arefev was responsible for economic and science policies.

OUT: Well-known television journalist and former Editor in Chief of NTV, TV-6, and TVS Yevgenii Kiselev told Ekho Moskvy on 10 August that he will no longer be involved in covering politics as a journalist. "Working as a political analyst after the amendments to the election legislation have been adopted is senseless," he said. He also denied rumors that he plans to run in the 7 December State Duma elections. Instead, Kiselev said he will make documentary films.

13 August: Unified Energy Systems' Reform and Strategy Committee will discuss the reorganization of 11 energy companies including Samaraenergo, Ulyanovskenergo, and Saratovenergo, "Kommersant-Daily" reported on 11 August

14 August: Cabinet of ministers will consider the 2004 budget and the question of increasing tariffs for services and products of the so-called natural monopolies during the period of 2004-06

14 August: Unified Russia's regional party list for St. Petersburg will be formed, according to the secretary of the party's branch in that city, Andrei Beglov, on 24 July

14 August: The Congress of Sister Cities of Russia and Finland will open in Pskov

15 August: The State Construction Committee will complete an inventory of the debts owed by regions in the communal-housing and public-utilities sectors

15 August: Yekaterinburg will celebrate the 280th anniversary of its founding

17 August: Karachaevo-Cherkessia will hold presidential elections

17 August: Fifth anniversary of the declaration of financial default by the government of then-Prime Minister Sergei Kirienko

26 August: Russian government due to present draft 2004 budget

29 August: Auction will take place for the 23.35 percent stake in Peterburg television now owned by Leningrad Oblast, RosBalt reported on 5 August

Late August: Campaign for 7 December State Duma elections officially begins

Late August: Six-way talks about North Korea's nuclear program will take place in Beijing

September: President Putin will address a UN General Assembly session in New York and will visit the presidential retreat Camp David in the United States for talks with U.S. President George W. Bush

September: Second Russian-U.S. Energy Summit will take place in Moscow

September: Saudi Arabian Prince Abdullah will visit Russia

1 September: State Duma's fall session opens

6 September: State Duma Speaker Gennadii Seleznev's Party of Russia's Rebirth will hold a congress in Moscow

6-7 September: Yabloko party will hold congress in Moscow

7 September: Sverdlovsk, Novgorod, and Omsk oblasts will hold gubernatorial elections

7 September: Murmansk will hold mayoral election

7 September: Moscow-based exhibition of Federal Security Service archival materials relating to the 1922 expulsion of the intelligentsia will close

9 September: First plenary session in State Duma

10 September: Special party congress for Communist Party of Russia

Second half of September: CIS summit in Yalta

14 September: Volgograd will hold mayoral elections

21 September: St. Petersburg and Leningrad and Tomsk oblasts will hold gubernatorial elections

23 September: The first European-Pacific Ocean Conference will take place in Vladivostok devoted to improving dialogue among intellectuals in European countries and the Pacific region, reported on 6 March

24 September: Federation Council will hold its opening session after summer recess

29 September-3 October: The Third World Conference on Climate Change will take place in Moscow

30 September-2 October: The Second All-Russian Sociological Congress will take place at Moscow State University

October: Second Civic Forum will be held, according to presidential Human Rights Commission Chairwoman Pamfilova

1 October: Thirty-three percent salary hike for budget-sector workers will go into effect, pending the passage of legislation being revised by a conciliation commission

1 October: Monthly minimum wage to be raised to 600 rubles ($19.80), according to Federation Council Sergei Mironov

October: President Putin and German Chancellor Gerhard Schroeder will meet in Yekaterinburg, Novyi region reported on 14 April

5 October: Presidential election to be held in Chechnya

6 October: British court to consider Russia's request to extradite tycoon Boris Berezovskii

23-26 October: First anniversary of the Moscow-theater hostage crisis

25-26 October: Russian Forum on the development of civil society will be held in Nizhnii Novgorod

29 October: 85th anniversary of the founding of the Komsomol

November: President Putin will visit Italy for the EU-Russia summit in Rome

7 December: Bashkortostan will hold presidential elections

7 December: State Duma elections will be held.