Once Upon a Time in Russia

by Ben Mezrich

  The only problem that remained was that Abramovich didn’t have anywhere near that kind of money; to that end, he had been able to convince one of his colleagues—an Oligarch by the name of Alexander Smolenski, who ran one of the larger banks in Moscow—to provide credit for the purchase—which was repaid using money from the newly formed Sibneft. In all, Abramovich had put up around seventeen million dollars of his own money—and gained control of one of the largest oil companies in Russia.

  A surreal series of events that had led Marina to this even more surreal moment. She often wondered what future economists would make of the “loans for shares” initiative—would they take into account the context, the sudden transfer from one form of market to another? A setting in which the rule of law was effectively turned on its head, where the government was locked in a desperate battle for survival, where corruption ran rampant in the quest to quickly relocate a massive amount of wealth and resources? In fact, the pairing of Abramovich and Berezovsky—the young, brilliant, creative entrepreneur and the connected power broker with fingers in the Kremlin—was uniquely designed for this context.

  Marina’s boss had calculated correctly when he had chosen Berezovsky to help him create Sibneft; but, of course, there was a price to be paid—and somehow Marina had found herself in the middle. She was essentially a pencil pusher—who was now pushing a heavy suitcase across the top floor of the Logovaz Club, right up to the entrance to Boris Berezovsky’s office.

  Once again, Ivan tried to step in front and stop her as she reached the partially open door. The two bodyguards who were stationed outside the door were about to help with his efforts—but Marina didn’t give them the chance. She quickly pushed between them, yanking the suitcase after her.

  She had never met Boris Berezovsky before—she wasn’t even certain what he looked like—but she could easily tell that the diminutive man at the desk on the other side of the lavish office, speaking quickly and in clipped tones into a telephone—wasn’t used to being interrupted. Ivan quickly came around her, obsequiously using his hands to apologize to his boss for the intrusion—an action that only seemed to make Berezovsky angrier. As soon as the Oligarch had finished with the phone conversation, he hurled the phone at Ivan, striking the young man in the chest.

  Marina’s face blanched—and she realized that this was a good cue to make her exit. She quickly pushed the suitcase a few more feet into the office, then turned and hurried back the way she had come. The bodyguards watched her go—and she could clearly hear the door to the office shut behind her.

  She wondered what sort of reaction Berezovsky would exhibit when he eventually opened the suitcase. She had to imagine that even a man of his means would be affected by the sight of one million dollars in American currency. Marina herself had never seen anything like it—had never thought she would see that kind of money in one place. When the people from the bank had brought the banded stacks of cash to Abramovich’s offices, Marina had spent a good ten minutes just looking at the piles of bills before she had begun to pack them into the suitcase.

  From everything she had been told about Boris Berezovsky, she doubted he would take anywhere near that long before he dug his hands into his first krysha payment. Marina was equally certain, as she worked her way back down through the extravagant Logovaz Club, that this surreal moment was likely to be just the first of many.

  The contents of the suitcase might represent a monstrous sum to a woman like Marina, but a million dollars wasn’t going to satisfy a man like Boris Berezovsky for very long.

  CHAPTER ELEVEN

  * * *

  February 1996,

  World Economic Forum, Annual Meeting,

  Davos, Switzerland

  TWO MONTHS BEFORE HIS fiftieth birthday, and Boris Berezovsky could count on the fingers of one hand the number of times he had been rendered speechless—and one of those times had involved a blown-up Mercedes and a decapitated driver. But here it was, happening again in the most pristine setting he could ever imagine: an elegant, wood-paneled conference room in an alpine hotel, hanging off the edge of the most spectacular, snow-topped mountain, the air outside so crisp and blue it was like the frozen interior of a diamond. It was a place that had been chosen—if not designed—for the coming together of the brilliant and the powerful, a place created for conversation, for a quest for common ground. And yet here Berezovsky sat, anchored to his chair, suddenly shocked into silence.

  He was alone in the rectangular room, his back to an oversize fireplace that sent concentric waves of fragrant heat through the material of his tailored suit. The man with whom he had been meeting for the past hour had excused himself at least ten minutes before—but still Berezovsky hadn’t moved, his mind reviewing the conversation he had just endured.

  He knew that the gist of what had been said was nothing he shouldn’t have already known; he had been having similar conversations for the past ten days in Moscow, and the man who had just left the Alpine conference room hadn’t said anything Berezovsky could not have realized himself. But hearing those words, in this place, from such a source—it was beyond sobering.

  George Soros, the Hungarian-born American billionaire, one of the richest men in the world—and in many ways a personal idol of Berezovsky’s—was exactly the sort of man you came to the World Economic Forum at Davos to meet. To Berezovsky, he represented everything laudable about the West; Soros’s opinions informed Berezovsky of the Western way of thinking about markets, business, and even politics. Berezovsky had searched him out specifically to get his opinion on the situation that was rapidly developing back in his homeland.

  There was now no doubt—the political situation had gotten to be well beyond desperate. Though Berezovsky’s personal status had continued to rise—both with his success with ORT and his assistance in privatizing Sibneft—his optimism about the upcoming election and Yeltsin’s chances of staying president had begun to fray. The Yeltsin government was moments away from complete catastrophe. Yeltsin himself had physically deteriorated, his worsening health preventing all but a few public appearances in the past few weeks. Meanwhile, the Communists had resurged, winning a majority in the State Duma in a recent surprise election—and they had brought forth a remarkably popular candidate to run against Yeltsin—Gennady Zyuganov. At the moment, Zyuganov had a resounding lead over Yeltsin in every poll; Yeltsin was sitting at a mere three percent approval rating, the lowest of his career, perhaps a reaction to the perception that his government was corrupt, perhaps just a sign that people were terrified that his government might fail.

  Still, coming to Davos, the central, most significant gathering of the international elite, where business and political leaders from all over the world came together to speak about the present and the future—Berezovsky had had reason to believe that all was not lost. He and the handful of Russian Oligarchs and politicians who had traveled to Switzerland with him—including members of Yeltsin’s “Family,” a group now spearheaded by Anatoly Chubais—had assumed that the Western leaders and businessmen would rally around Yeltsin. After all, the president was the only true democratic prospect in Russia, a capitalist who was trying his best to bring Russia into the modern era.

  Instead, when Berezovsky and his colleagues had arrived in Switzerland, they had witnessed the unthinkable: the Western leaders had fallen all over themselves in an attempt to get close to Zyuganov and the Communists. It was almost as though the rest of the world was endorsing a fall backward to the Soviet era. Berezovsky knew the endorsements Zyuganov was getting had more to do with pure opportunism—he was the front-runner, and if the West wanted to do business in Russia, they needed the support of whoever became president—but even so, he had expected the West to stand behind democracy and capitalism, whatever the risk.

  So he had arranged the meeting with George Soros, the businessman for whom he had more respect than any other. He had been seeking advice, perhaps a road map to get Yeltsin back on track.

  Berezovsky didn�
�t remember every word that the Western businessman had spoken, but his most vivid remarks on the situation seemed still to be twirling through the high-altitude, oxygen-depleted air: You should think about leaving Russia, Boris. You are not just going to lose this election—you are going to end up hanging from a lamppost.

  Soros had gotten one thing correct. This was an existential battle; a Communist president wouldn’t just roll back the capitalistic changes of the past decade—a shift to communism would mean the end of the line for Berezovsky and his colleagues. Privatization? Gone. Sibneft, Yukos, ORT, all of it would end up back in the hands of the state, and people like Berezovsky and Abramovich might find themselves in prison—or worse.

  Berezovsky felt his pulse quicken, a sudden fire rising in his veins. The last time he had experienced sensations like this had also been in Switzerland—while he recuperated from the burns covering his arms and face. He was not a man who stopped fighting unless there was no other option, and despite what George Soros and the Western bankers and politicians at Davos might be thinking, he refused to accept that this battle was over.

  But he also knew it wasn’t a battle he could fight alone. Which meant that he needed to make amends and befriend the very people he was in constant competition with—the other men who had benefited from the Yeltsin era, men who had just as much to lose.

  Regardless of what Berezovsky had told Korzhakov, ORT alone—even financed heavily by Sibneft—wasn’t going to be enough to turn the public over to Yeltsin. One television station, even as enormous as ORT, could reach only a certain segment of the population, and it was already well known to be leaning heavily in Yeltsin’s favor. Berezovsky needed more weapons in his arsenal: media, and also money, more than he alone could ever organize. The coffers of one of the biggest oil companies in Russia were one thing—but what about the coffers of all the oil companies, and the nickel companies, and the aluminum companies? What about the coffers of all the recently privatized resources of one of the wealthiest nations on the planet?

  The idea grew inside of him. The press liked to call them Oligarchs, and most of Berezovsky’s colleagues bristled at the name. But that’s exactly what Berezovsky now had in mind, a group of Oligarchs who would turn the election on its head. Not only because it was in their best interests, but because it was in the best interests of the country, and the only real road to democracy. A happy coincidence, perhaps, but one that Berezovsky could hold aloft like a torch. He wasn’t looting Russia, he was saving it.

  This would mean making friends with former enemies—specifically, men like Vladimir Gusinsky, the owner of NTV and the man he’d nearly had run out of the country for good. And it would also mean confronting former friends—as enemies. Hard-liners in Yeltsin’s government—a handful in the “Family”—were making a loud racket, pushing forward proposals to hold onto power no matter how the election went. Conservatives, former military men such as Korzhakov, as well as the current prime minister and a number of others in the cabinet, intended to keep Yeltsin in office using an old-school methodology—simply postponing an election that he couldn’t win.

  In contrast, Berezovsky found himself on the side of democracy, along with Yeltsin’s daughter Tatiana and Anatoly Chubais, his brilliant strategist. The battle between the two sides had been growing more terrifying each day, as the election drew near, and there were even brewing fears of a real coup.

  Berezovsky wouldn’t have put anything past Korzhakov. But Berezovsky also believed that if push came to shove, Yeltsin’s favor would swing toward his beloved daughter over his drinking buddy (and sometimes right-hand man and longtime head of security). Still, binding together the Oligarchs—financiers whom Korzhakov disliked, as a group—in support of democracy would fray Yeltsin’s party even further.

  Berezovsky did not believe there was any other choice. If he could make peace with Gusinsky, together they would control almost all of the television in the country, and most of the print media and journalists as well. Such a force launching continual, positive stories about Yeltsin while firing off negative innuendo about the Communists would have an enormous effect on popular perception. Further, if they could bring together the leading Oligarchs—the seven biggest, whom Berezovsky had already labeled in his head the Seven Bankers, though they had fingers in many, many industries—Berezovsky knew there would be enough money to run a truly Western-style campaign.

  Chubais had already shown himself to be a strong leader in conversations at Davos, and the Oligarchs loved him for what he had done—creating a privatization system, shifting state businesses into the hands of the financiers. They would rally behind Chubais, and all that was needed was for Yeltsin to understand that this was the only way—the correct way—to win.

  Berezovsky remained silent and seated, in that Alpine hideaway, feeling the warmth from the fire behind him, breathing that rarefied air. But his desperation began to shift into something else. Despite what George Soros might have thought, Berezovsky believed he could pull this off. He would save Russia, win an election—and, most important, safeguard his way of life.

  CHAPTER TWELVE

  * * *

  June 19, 1996,

  Logovaz Club

  A SCANT FOUR MONTHS AFTER Davos, the world felt like it had shifted on its axis—again—and Berezovsky had never felt more alive, pinballing through the top floor of his club while campaign workers pirouetted around him at full speed, a veritable army of young men and women continuously shuttling between the Logovaz, Yeltsin’s Presidential Club, and Chubais headquarters at the Kremlin.

  The political race was going better than Berezovsky could have dreamed. And even better than that, he believed he was finally on the verge of achieving the goal he had set for himself after the assassination attempt back in 1994. The most profitable and important business, he had told anyone who would listen, was politics. Through politics, he was rising like a phoenix from the flames of that bombing. And he was doing it by creating a unique marriage of finance and politics.

  Berezovsky grabbed a freshly printed campaign poster off a nearby velvet-lined counter, and held it aloft toward Badri Patarkatsishvili, his Georgian partner and best friend, sitting comfortably in a leather divan beneath one of the club’s many large-screen televisions, smoking a cigar. Berezovsky poked at the picture on the front of the poster—an image of the Communist presidential candidate over a slogan that read, “This may be your last chance to buy food.”

  “Subtle,” Badri laughed. Then he gestured toward the television set.

  “Been switching back and forth between ORT and Gusinsky’s NTV. From all the coverage, you’d think that Yeltsin was running against Stalin himself. By the next round of voting, people will be thinking about bread lines and gulags.”

  Berezovsky grinned. The turnaround in the popular opinion about the two candidates was already historic. Two days earlier, Yeltsin had registered almost thirty-four percent of the vote against less than thirty-three percent for the Communist candidate. The third-place candidate, General Lebed, had received less than fifteen percent—and had summarily resigned from the election, joining Yeltsin’s campaign. His addition to their side was an incredible boost, as he was a well-respected military leader, with the sort of strength of character that appealed to the Russian nature.

  It had taken a deal with the devil—or, more accurately, seven of them—but the “Davos Pact” that Berezovsky, through Chubais, had achieved, was functioning perfectly. Swallowing his own anger and animosity toward Gusinsky hadn’t been easy; but there was no question that the banker and media magnate had been an enormous part of the equation. The journalists who worked for NTV were very well respected, and when they told the public that a return to communism would mean a return to the dark ages of Stalin and abject poverty, people listened.

  Meanwhile, Berezovsky’s gang of bankers had provided Chubais with an almost limitless war chest. The numbers were debatable, but Berezovsky believed that together they had spent in the hundreds of mil
lions on the campaign—more than any American president had ever spent to get elected. The voting was still close, and there would be a runoff, but Berezovsky now felt confident that Yeltsin would prevail. And when he did, Berezovsky knew, he and the other Oligarchs were going to benefit enormously. Between them, they already accounted for almost fifty percent of the nation’s GDP. Seven men, with the wealth of half a country in their hands—and they were in the process of buying not just an election but a government.

  Of course, such a statement would be a dangerous thing to say out loud. But Berezovsky had never been particularly good at limiting himself, controlling what he said. Already, his newest business colleague—Roman Abramovich, whom he now thought of as his protégé—was worried about being publicly associated with Berezovsky’s political ambitions and machinations. Abramovich felt that the image of a man involved in the formation of Sibneft, essentially attempting to fix the election, could reflect badly on the company. To that end, they’d had a number of conversations about Berezovsky backing away from any public associations with the oil concern. Berezovsky had happily agreed; the truth was, he had no managerial interests, in fact he knew nothing about running an oil company and had no reason to be involved in any of its operations. His skill set had been in getting the thing off the ground, getting it privatized, and protecting its interests through what he was doing for Yeltsin. Account ledgers, business decisions, the corporate day-to-day—these held no interest for him.