Nothing Is True and Everything Is Possible: The Surreal Heart of the New Russia

by Peter Pomerantsev

  Those who can afford it become patrons.

  The former Moscow mayor’s wife, who made part of her billions by winning construction contracts from the city government while her husband was mayor (she denies there’s any connection), is the latest to arrive. Back home Mozhayev and his friends, the defenders of Moscow’s historic architecture, blame the mayor and his wife for the “cultural genocide” of Moscow’s buildings, swathes of the old city destroyed to make way for menacing imitations of Disney towers and Dubai hotels; Russian constructivist masterpieces, which admirers come across the world to see, left to decay. Now based in London, the mayor’s wife has a foundation called Be Open, launching a Young Talent Award at Milan Design Week and devoting a new program at London Design Week “to innovative projects that reach out to the sixth sense, or intuition.”

  I’m invited to a Russian party during the Frieze Art Fair. During the last financial crash many thought it meant the end for Frieze: the Wall Street men and City boys were broke. But it turned out a Russian (and a Ukrainian and an Armenian) will still trust London over Moscow or Kiev to secure their wealth. Your bank accounts might get seized, but no one can get to your family’s Jeff Koons or seize your wife’s Knightsbridge mansion. So Frieze didn’t collapse; it swelled. (In Moscow itself the market for contemporary, Western art has been failing. Not because there is no money—there are more Russian billionaires every year—but because the new demand, issued from the Kremlin, is for the patriotic. So now you buy socialist realism for your Moscow place and Rothkos for your London and New York ones.)

  The party is in one of the Nash stucco mansions on a crescent opposite Regents Park (these places can go for $50 million). The London Russians have banded together to show off art from their collections: Van Goghs are spread about casually on the walls of the stairwell and in little corners, right next to student works by wives and girlfriends who are taking courses at St. Martins College of Art and Design to pass the time in London. Most of the crowd is Russian. Around them swarm the English art dealers, with slightly worn elbows, looking to start a conversation about some trade. The big thing recently is Russian avant-garde: that little moment in the early twentieth century when Russia was not just in step with but defined the world, and which you buy to be both a patriot and global. And it so happens this is the easiest art to copy. Who can tell one pure black square apart from yet another? Much of Russian avant-garde art on the market is fake. Churned out in factories run by Russian crime syndicates in Israel and Germany, then confirmed by Western art historians. Without them the fakes would never make it to the market. They play the same role as the Swiss and English lawyers who act as “nominal beneficiaries” for money-laundering shell companies, lending their signatures to help make the simulated real, and like those lawyers, they are only too happy to look the other way, as are the dealers who then sell all the fakes to the more gullible new money.

  The Russians swerve around the dealers and move to the VIP area on the third floor.

  Down by the bar on the first floor roam the estate agents. Many are graduates from private schools. They look happy. Business is good: three-quarters of houses over $10 million in the golden triangle are sold to the new global rich.

  The estate agents tell great tales. About the new oligarch exiled from Russia who misses his childhood dacha so much he asked an architect to fly to Moscow, then re-create the place, panel by panel, with the same 1980s wallpapers and settees in the English countryside. Sourcing the old Soviet wallpaper was tough; there’s only one factory in Russia you can get it from. And then there’s the tycoon who wanted a new house in Belgravia. That wasn’t hard. But then he asked for six apartments, of equal size, in a ten-minute-walk circumference around the house. They were for his mistresses, so he could walk in any direction and arrive at one. And have you heard the one about the thief the police caught recently? Who put on an accent and would turn up at viewings for mansions saying he was a Russian oligarch and then steal jewels from the bedrooms as he went around? Actually he was a hood from Tottenham. But everyone fell for him, the accent was so good.

  There’s free champagne.

  Some can remember the easy days when new Russians were still suckers. In the 1990s an agent in Geneva managed to sell the head of Russian Railways a property on the slope facing away from the lake for the price of a property facing the lake; that’s twice the price. You don’t really get dunces like that anymore. Now you rarely meet the owners. They send an English lawyer. The deeds are all in the name of some company in an offshore Crown dependency. The estate agents don’t ask too many questions.

  • • •

  As I wait for William Browder to come in for his interview in Meet the Russians, I look at the newspaper cuttings that are all over the walls of his office on Golden Square: “One Man’s Crusade against the Kremlin,” “The Man who Took on Vladimir Putin.” Browder used to be one of the President’s more vocal supporters, back when he was the largest foreign investor in Russia. He’d come to the country in the 1990s, when most in Western finance said it was crazy to even try. He proved them all wrong. Then in 2006 he pissed off the wrong people in Russia and was banned from the country. Then things got worse: the documents for his old investment vehicles were taken in a raid by the police. Browder told a Russian lawyer, Sergey Magnitsky, who worked for a Moscow-based law firm called Firestone and Duncan, to follow the trail. It turned out the investment companies were being illegally signed over by the cops to petty criminals, who would then ask for tax rebates on the companies worth hundreds of millions of dollars, which were then granted by corrupt tax officials, signed off on by the same cops who had taken the documents in the first place, and wired to two banks owned by a convicted fraudster, an old friend of the aforementioned cops and tax officials. Officially the tax officials and cops only earned a few thousand a year, but they had property worth hundreds of thousands, drove Porsches, and went on shopping trips to Harrods in London. And this was happening year after year. The biggest tax fraud scheme in history. Magnitsky thought he had caught a few bad apples.

  Magnitsky gave an interview to Bloomberg Business Week. Twelve days later he was arrested; he was tortured and eventually died in a Russian prison a year later. It hadn’t been a case of a few bad apples. An anonymous letter by a whistle-blower to a Russian newspaper said the tax rebate mechanism was known as the “black till of the Kremlin,” used systematically for everything from personal enrichment to financing covert wars or foreign elections.

  “The day I found out about Sergey’s death was the worst day of my life,” says Browder when we start the interview. “He was killed to get at me.” He is tall and balding, with glasses, direct but emotionally contained. (How many times, I wonder, must he have given the same interview?) He is American but based in London. “I have sworn to get justice. The Putin regime has blood on its hands. I used to be an investment banker, but now I’m a human rights activist.”

  We carry on shooting as we drive through Belgravia: “Your viewer probably thinks the sort of people who killed Magnitsky and stole that money are gangsters with gold chains. But they’re officials who dress nicely and own nice houses and send their children to nice schools,” continues Browder.

  We arrive at Parliament. Browder is having a meeting with a member of Parliament in a corner office of Portcullis House overlooking the Thames. Since Magnitsky’s death he has researched where the stolen money went. It all went abroad, via Moldova, Latvia, and Cyprus, and from there into bank accounts in Switzerland and property in Dubai and Manhattan. A Russian businessman who helped reveal these flows died of a sudden heart attack after a jog near his gated compound in Surrey. He was forty-four and had no history of illness. He had a lot of enemies. Two postmortems could not determine the cause of his death.

  Browder takes out some files: lists of UK companies that helped launder bits of the Magnitsky money. (We do several takes to get a nice shot. Browder and the MP are used to it
.)

  “I’ve filed complaints with the authorities, but there’s no response. Could you see what’s happening?”

  The MP says he will try. The English financial authorities are notoriously slow at clamping down on money laundered through the country. London is the perfect home for money launderers: terrific lawyers to defend your stolen assets; great bankers to move it; weak cops who don’t ask where they came from.

  A little later I’m invited back to Parliament for a presentation, “Why Europe Needs a Magnitsky Act.” The US version of the act is Browder’s great achievement, banning Russian human rights abusers and corrupt officials from entry into, investments in, and owning property in the United States. The White House and the business community all initially opposed the bill: human rights and finance, they argued, shouldn’t mix. Browder pushed it through even though most said it would be impossible. But now no government in Europe is prepared to touch the act: it might stop the money coming in. Browder hopes to provoke a referendum.

  There are only a couple of dozen people at the presentation, in a small room at the end of a long corridor in a quiet corner of Parliament. I see a couple of backbench MPs, a leftie journalist, a neo-con magazine editor. No one from government. Jamison Firestone is there, too; he looks to be in his mid-thirties though he is actually pushing fifty and just has that everlasting boyish thing. Firestone was the American lawyer for whom Sergey Magnitsky worked at Firestone and Duncan, the Moscow law firm Browder hired. Browder never really knew Magnitsky, had rarely seen him. It’s all very different for Firestone. He seems to twist in pain every time he talks about his dead colleague. I see him regularly, pacing through every party and every conference and business meeting and lecture about Russia, calling out on the money launderers and murderers and repeating the name “Magnitsky! Magnitsky!” until it burns in everybody’s ears. A canary in the mine of Mayfair calling that this is all wrong.

  We meet a little later in a café in Maida Vale. As we speak Firestone’s voice sometimes rises, and people look around at us, startled. When I glance up again later I spot them quietly listening in. There’s a downpour outside with reports of flooding further down the Thames estuary. Firestone calls Magnitsky by his first name, Sergey.

  “Sergey was the best lawyer I ever knew. I never saw him lose a case, never. We would have clients charged for taxes they didn’t owe, and every time he would challenge the courts and win. He was an optimist. He only ever got emotional about classical music. Even when he was arrested. He called me from the car on the way to the police station and he was calm: he was sure it would all clear up.”

  After Sergey was arrested the police came for Firestone’s other lawyers. He had to take one colleague down the fire escape of her home with the police at the front door, and then they took a night train across the Russian-Ukrainian border. Another flew straight to London.

  “I had spent eighteen years in Russia but for my colleagues it was their whole life. We rented a three-bedroom apartment together. My colleagues would sit in their rooms crying. Their relatives were ill or suffering, but they couldn’t go back to see them. But none of us could really say anything, since what was happening to Sergey was so much worse.”

  When Sergey had been in prison for nine months, nine months in which no one was allowed to visit him, his wife managed to get hold of his prison diary.

  “I received it by e-mail,” continues Firestone. “Just page after page of stoical, detailed description. Like a lawyer, just cataloguing everything calmly. How the sewage would flood the cell and they would live with it for days; how he would have to stand to write because there was no room there were so many prisoners; how each cell got worse because he wouldn’t confess and incriminate others; how there was no glass in the windows in the cell in winter and it was freezing. In the summer overcrowded cells and prisoner transport trucks were like filthy never ending saunas; how he would not get treatment when the pain in his stomach was becoming unbearable. . . . What made it worse was the calm way he was cataloguing it all. I could hear his voice. Same as always.”

  Firestone’s own voice is rising again. He never thought he would end up taking on the Kremlin.

  “I had a wonderful life, my colleagues had wonderful lives. And to hold onto it, all we had to do was shut up and let this pass. But somebody was killed.”

  He tells me he still yearns to go back to Russia. He had Russian residency and was about to apply for a passport for a second citizenship, planned to spend his life there. He had first moved to Moscow in 1991, straight after he graduated from college. It was his father who had advised him he should learn Russian in high school; back in the 1980s he had already told Jamison the USSR would collapse one day and Russia was where the money would be. Firestone’s father was a serial entrepreneur who had made and lost a fortune in California real estate, created the only Internet porn site to lose money, and then made $12 million by creating another site that helps kids with their homework. At the time Firestone went to Russia his father was in jail for selling fraudulent tax shelters.

  “My dad liked to hang out with gangsters the way Frank Sinatra would like to hang out with gangsters. When he was released he came over to Russia and tried to get a protection racket involved in my first business: importing cars to Russia. He said everyone in Russia needs protection, but I didn’t want the mafia in my business and he took a hit out to break the legs of my friend and law partner: ‘If I have your legs broken you’ll ignore it because you’re strong. If you see your friend with broken legs you’ll understand the cost of opposing me,’ my dad told me. I resigned and then the protection racket my dad hired stole our cars and that was the end of his foray into Russia. My dad was always my moral compass: whatever he suggested I did the opposite.”

  Firestone had many moments in Russia when he had to think about his dad: all the times he was asked to “move some money”; the partner in his audit company who told him they should cheat on their firm’s taxes. (Firestone had him thrown out of the building by guards with AK-47s and reported him to the police.) Then there was the time the Russian minister for development (the same one Benedict had worked for) asked Firestone what he thought needed to change in Russia to protect private property. The minister expected a polite answer, but Firestone told him publicly that while ministers and oligarchs were above the law, the country was fucked. Firestone was a board member and head of the small business committee of the American Chamber of Commerce at the time. One of his fellow board members from a Fortune 100 company told him off for being outspoken: “We like what you’re saying Jamison—but could you say it quieter?”

  “We were all making a lot of money,” says Firestone, “but I could tell things were getting scummier.”

  But I can also hear the thrill in his voice when he talks about his Moscow adventures.

  “I’ll wear the lawyer’s hat,” says Firestone, “but I was a really good street fighter. I fired mafias twice on behalf of my clients. Mafia, like police, can only react to two responses: ‘yes sir’ or ‘no sir’ (which gets you killed). One time a client was raided and had his business database stolen by the mafia group that was meant to be protecting him: they’d crossed over to a rival. So we went to meet these guys in a hotel on Petrovka and I told them in Russian and in my nicest corporate voice:

  “My client pays you 100,000 a month for a package of services that you say includes protection. We don’t understand how you can also work with other clients protecting their right to steal from my client, who is also your client. I’m a lawyer, for example, and I could never defend both sides.”

  “That’s why we’re different from you lawyers,” the mafia guys answered. “You guys quarrel all the time. We work with everyone and ensure peace for all sides.”

  “You’re quite right. We didn’t understand. And I’m sure it’s our fault—but now that we understand the services you offer we don’t need them anymore.”

  “W
e walked out of a room of shocked Mafiosi. The others were only paying them 30,000. Next week the racket came back with all the computers from the rivals.”

  Firestone still smiles when he relates this, playing out each line of the dialogue in Americanized, but nearly perfect, Russian. And he tells me of the time he had to hide out in a government hospital to hide from corrupt cops (they could grab him anywhere apart from a hospital full of ministers); and when his first office was raided by thugs working for his neighbor and his staff were handcuffed to the furniture and threatened at knifepoint; or when he had to fly to New York and buy up all the bugging equipment at the Spy store to give to the antifraud squad in Moscow so they would have the equipment with which to bust other bent cops trying to extort money from him.

  “You know, one of the problems I have living in London is that if I actually tell the truth about my story people just assume I’m lying. They never call me back. I’ve learned to just talk pleasantries. Or if someone really wants the truth I tell them there’s a condition: ‘You give me your e-mail now before the conversation starts, and I will tell you my story and then send you some links and you can see me on the BBC or read some newspaper articles about me. And then maybe you might call me back. Because you won’t call me back otherwise. It’s just too weird. . . . ’”

  Russia as the place where you are forced into extremes, which then make you examine your every decision and what you’re made of, where the choice between good and evil becomes distilled. Is this what makes it so addictive? Another incarnation of Moscow as Third Rome. We all end up becoming sucked into the city’s myths, become expressions of the only story it knows how to tell. The same tragedy can happen in so many places, but in Russia it takes on that iconic intensity.

  When I refocus on what Jamison is saying, his voice is rising again.

  “London shocked me. The whole system is built around wanting that money to come here. We want their money. We want their trade. And now you’ve got former German chancellor Schroeder and Lord Mandelson and Lord So-and-So working for these Russian state companies, and you know I think they should just be honest and say ‘some Kremlin company offered me 500,000 to sit on their board and I don’t do anything and I don’t know anything about how the company is run but sometimes they ask me to open some doors.’ And the argument I hear from everyone is ‘well if the money doesn’t go here it will go somewhere else’: well here ain’t going to be here if you take that attitude, here is going to be there. We used to have this self-centered idea that Western democracies were the end point of evolution, and we’re dealing from a position of strength, and people are becoming like us. It’s not that way. Because if you think this thing we have here isn’t fragile you are kidding yourself. This,” and here Jamison takes a breath and waves his hand around to denote Maida Vale, London, the whole of Western civilization, “this is fragile.”