Red Wolves & White Knights

by Peter Kysel

  “Some of the godfathers of the 1989 revolutions emerged from the new generation of bears, who re-tasted the magic mushrooms. They were inspired by Gorbachev and began to debate how to drain the swamps. Other ideologically orthodox red bears plotted to keep dictatorships.”

  “Power is draining from the bears. The red wolves deserted them, when the bears failed to order their wild pigs to massacre the demonstrators.”

  “The red wolves are bound to join the popular revolu­tions and society will begin to transform itself.”

  We sat in silence, sipping our coffee and savouring the moment.

  “There is a chance to influence economic reforms. The red wolves should be receptive to our suggestions,” I added cautiously

  “Yes, they desire power and wealth. You might be able to influence the economic reforms, but don’t get mixed up in the politics. The red wolves are ruthless” concluded Miloš.

  #

  Don’t Emote

  Within a year of the regime change, one could begin to see trends. Swamps can be drained. Free and prosperous society can be created. Should I get involved? If so, how?

  My wife was my best audience. As I talked to her, a frame­work emerged. Florisse summarised our discussions.

  “Your motives are complicated. Let’s look at them in turn. You have the skills that the Czechs lack, to bring about this economic transformation. You want to see your homeland prosper, but you are conflicted, because you also want revenge for your family. You were victimised by your homeland, so you are in pain and you are vulnerable. The new rulers will not befriend you they will exploit your vul­nerabilities.” I couldn’t disagree with her.

  “Right now, I don’t know how to get involved. I can only offer advice. I could do business elsewhere in Eastern Europe, in countries where I don’t have any emotional conflict.”

  “Will you accept the ambassadorship if they offer it to you?”

  “No. It would be an honorific position. The route to pros­perity is through rapid privatisation.”

  “You could start your own business in Prague.”

  “That wouldn’t have any national impact.”

  I was wrong. Two years later, a single entrepreneur gained massive influence by enticing the majority of the population to participate in voucher privatisation. Finally, Florisse said

  “Beware of your weaknesses. You must learn to be dispas­sionate towards your homeland. Like a civil engineer, you’ll have a job to drain the swamps and to prepare the land for cultivation. If you become emotional, you’ll fail.” She suc­ceeded in steering my thoughts in a new direction.

  PART 3

  Wild East

  In 1990 political changes in eastern Europe created business opportunities. As the director for international investments and a fluent Russian speaker, I prioritised the imperial swamps of the Soviet Union. Expecting to find more chaos and decay there than in central Europe, I certainly wasn’t disappointed.

  Chapter 6

  KGB

  In 1990, Sheremetyevo airport in Moscow was a vast, gloomy and depressing place. Customs officers barked ques­tions in Russian at travellers, pretending not to speak any other language. Their hostile approach to arriving foreigners worked well as an intimidation tactic. They counted our US dollars and searched our bags.

  The arrival hall smelled of boiled cabbage, even the cus­toms’ officials smelled of it. The exit door of the terminal hung precariously skewed on its hinges, leaving it perma­nently semi-open. Gusts of sleet blew in, landing on the floor and creating dirty puddles inside. Maintenance and cleanliness were not socialist priorities. Travellers, walking through the puddles, were given an instant taste of Soviet reality.

  I was apprehensive when I stepped outside the arrival hall. The place didn’t feel safe. It was almost dark on that cold Saturday afternoon in early May. There was a chill from the icy wind. A grey Volvo was parked directly opposite. Relieved, I saw my surname printed in large capital letters on a sheet of paper under the windscreen. The car had been ordered from London, to avoid my taking taxis. I looked around me as a precaution. Nobody seemed to pay any attention. Two men inside the car were slightly startled, when I opened the rear door, tossed in my bag, dropped into my seat and said cheerfully in English, “Hello, I am glad to find you. I’m from Lloyds bank. My name is Peter. Let’s go to the hotel.” The driver reversed the car and we drove off, while I looked behind, to check that we were not being followed. My senses were on high alert. The man in the front passenger seat turned around and shook my hand.

  “Welcome to Moscow. I am your interpreter, my name is Serjozha. The driver is Andrei, but he only speaks Russian.”

  “I’m tired. Please take me straight to the hotel and pick me up tomorrow morning for some sightseeing. We’ll start work on Monday. Here is my list of appointments for the next four days.” It was a relief to be in a familiar car. I took my shoes off. My socks were wet.

  We arrived at the hotel. I had an early dinner and then retreated into the safety of my room, locked the door, rammed a chair against it for extra security and spent the rest of the evening watching Soviet television. I wanted to catch up on their internal news and to calm down. I slept badly waking up to suspicious noises outside.

  Still tired, I got into the waiting Volvo at nine o’clock the following morning and asked for a sightseeing tour. I followed the drive on my city map to get my bearings. I assumed that Andrei and Serjozha were KGB agents and kept them at arm’s length and they treated me with studied indifference.

  When we got to Red Square, I asked Serjozha to escort me to Lenin’s mausoleum. There was a long queue, but access for privileged foreigners was easy. Within minutes I was inside, gazing at the embalmed Bolshevik leader who had ignited the revolution seventy-three years earlier. Lenin’s face appeared to be made of wax. It was a freak show and made me feel slightly queasy. When I emerged from the mausoleum, I was thinking Was it Lenin, or a fake? In this country, the truth has no meaning. I made no comment on my visit to the interpreter, who was eyeing me whilst light­ing a cigarette

  “Serjozha, let’s continue our tour.”

  #

  McDonald’s

  We drove down Tverskaya Street towards Pushkinskaya Square. There was an enormous queue of people snaking around the square. I pointed my video camera at the statue in the middle of the square, while inconspicuously taking shots of the queue. Serjozha pointed out the statue

  “That’s our beloved poet, Alexander Pushkin,” he said proudly.

  “But why are all those thousands of people queuing around the square? Are they paying their respects?” I shouted over the noise of the running camera

  “No. McDonald’s opened here three months ago. People queue like this every day,” said Serjozha and quickly added with pride in his voice

  “It’s the largest McDonald’s in the world you know.” The queue is much longer than outside Lenin’s tomb, I thought to myself. Realising that this would sound offensive I just said,

  “That’s amazing.”

  “You see more people here than outside Lenin’s tomb, that’s for sure,” laughed Serjozha, probably reading my thoughts. Perhaps, I didn’t have to be so careful, after all.

  “Have you been to McDonald’s?” I asked

  “Yes, I took the whole family. We keep the polystyrene boxes on our bookcase as souvenirs and to show them off to our friends.” Serjozha was a proud family man. A meal at McDonald’s was a luxury in Moscow in 1990.

  #

  Doing Business in Moscow

  The next day began with a frustrating round of business meetings. Soviet business etiquette resembled Soviet social behaviour. People were unreliable and charmless. They didn’t bother to turn up for appointments or cancelled them without explanation. It was a minor victory even to gain access to an office building. The armed guards at reception ignored me or pretended not to understand my Russian. Soon I realised that, without a local fixer I was wasting my time. Lloyds bank had an office i
n the capital, but they didn’t help me.

  After several abortive meetings, I realised that my business trip was a complete waste of time. Infuriated, I returned to the car and said in Russian,

  “Andrei take me back to the hotel. People are refusing to meet me. I am wasting my time in Moscow and I am fed up and extremely hungry.” On the way to the hotel, Serjozha could not restrain himself and asked,

  “You didn’t speak a word of Russian when you arrived, yet you now speak our language fluently. How come?”

  I attempted a feeble joke.

  “English bankers learn foreign languages very quickly. It’s our job.” They nodded, laughed and we continued to chat in Russian.

  The following morning Serjozha was waiting for me in the lobby. He motioned me to sit down, patted me on the arm and said accusingly,

  “Your Russian is far too good for an English banker,” and shot me a question –

  “Didn’t you analyse those reports on Soviet missiles when you were in New York in the summer of 1970?” I froze. This was unexpected. It was true, but naturally I denied it. Not that my denial made much impression on Serjozha. Back in 1970, I had had a summer job in New York. As an analyst, I translated and summarised Russian reports on rocket technol­ogy. I was teamed up with an older German colleague, Hans, whom I suspected of having been involved in the development of Nazi missiles during WW2. It seemed that Hans had also collaborated with the KGB.

  “You obviously work for American or British intelligence,” stated Serjozha flatly, but without animosity. That was not true, and I denied it. Serjozha didn’t seem to care and didn’t bother to respond. I assumed that he was recording our conversation. He had done his job and the matter was now closed. We both stood up and moved towards the waiting car. It was another cold and rainy day.

  Will they drive me to the KGB headquarters at Lubyanka for interrogation, or to my meeting at Gosbank?

  #

  Gosbank

  “Gosbank is only ten minutes from here,” said Serjozha as we joined Andrei in the car. Gosudarstvenny bank (the central bank of the USSR) was in a three-storey building in Neglinnaya Street, flanked by two higher wings. It was separated from the street by a high fence and metal gates.

  We were stopped at the gate by armed guards, pointing their AK-47s at us. Andrei flashed his, presumably KGB, card and the guards opened the gate. We drove into a large forecourt in front of the main building. As we entered, Serjozha showed his card and exchanged a few words with another set of armed guards. I didn’t need to say anything. It seemed that our earlier conversation in the hotel lobby had upgraded my status.

  A young woman came down to reception, welcomed me and took me up a flight of stairs to the first floor, leaving Serjozha behind. I was astounded by the ease of my access to Gosbank, compared to all my previous abortive attempts to meet anyone in Moscow. On the way up the woman said,

  “The chairman of Gosbank, Gospodin Gerashchenko is expecting you. Would you like coffee or tea?” The top boss was going to see me. It truly was a dramatic transformation of my status in Moscow.

  “Thank you, black coffee, no sugar please,” I said auto­matically, as my business trip was restored to its original schedule.

  #

  Gold

  I was ushered into the chairman’s enormous office. As I entered, Viktor Gerashchenko rose from behind his desk, smiling and stretching out his hand to shake mine. He was a short, thick set, balding man, in his mid-fifties. He spoke good English. Viktor was the undisputed star of the Soviet financial establishment.

  “I was made a director of Moscow Narodny bank in London before I was thirty years old,” he boasted by way of intro­duction. After the usual pleasantries and an explanation of my role, Gerashchenko went to close a leather padded door. I waited for his next move. He turned around to show me to an armchair. He poured two glasses of vodka. We raised our glasses and knocked them back. He studied me for a minute or two and said,

  “Dear English banker, I have been informed about you. You have a good understanding of Eastern Europe. We would like to arrange a business deal with your bank.” He then made a startling statement.

  “We want to transfer part of the Soviet gold reserves abroad. They need to be in a safe place and under pro­fessional management. The situation here is too fluid and volatile. If we leave Gosbank’s gold in Moscow, either our politicians will steal it, or foreign creditors will freeze it.”

  I was aware that the government was getting desperate. The country’s trade deficit had ballooned, inflation was hit­ting 300%, while its economy was shrinking at 15%. The government itself was unstable. There were rumours of the possible removal of Gorbachev, which had even reached for­eigners like me.

  “Gospodin Gerashchenko, how much gold do you wish to transfer?” I asked nervously. Without saying a word, Viktor reached for a file on his desk and showed me the current holdings, recorded by hand. He seemed to be indicating that his office was bugged. I saw the figure of eleven hun­dred tonnes and nodded. It was about half of the amount estimated by the CIA.

  We toasted with another glass of vodka and agreed to con­tinue our meeting the following day. My minders didn’t seem surprised that I had a follow up meeting. Back at the hotel I made a few calls and prepared my recommendations for the proposed transaction. When I got back to Gosbank in the morning, Viktor’s plans were more advanced.

  “We should be able to move about half of our holdings this year.” I quickly calculated – 500 tonnes of gold are worth about $6.5 billion. A few Aeroflot flights should be able to handle this. Ilyushin Il 62 can carry forty tonnes. So, thirteen flights should be sufficient to fly out this amount of gold.

  “Gospodin Gerashchenko, how do you expect us to assist you?”

  “Our preferred locations for holding the physical gold are London and Cyprus,” I nodded and added

  “I would suggest Jersey and Monaco for managing the gold holdings and the proceeds from their sales,” Geraschenko nodded and added

  “I’ll send a delegation to London to arrange the transfers to England and Cyprus. Dear English banker, I want you to lead this project. You will report directly to me. You will also manage the proceeds of the gold sales,” he announced imperiously. After yet another glass of vodka, our meeting ended, and I departed.

  During the flight back to London, I mulled over the recep­tion I had received in Moscow during my trip. I remained wary of doing business in Russia and felt personally unsafe. Everyone I met, was trying to get money out of the coun­try, indicating major turmoil ahead. By contrast, other east European countries appeared safer and were moving steadily towards reform.

  #

  Accountant Johnson

  I met Michael Johnson in London in July 1990. He had received his diploma in accountancy and was preparing to move to Moscow. I shared my observations of the changes happening in eastern Europe and he told me a bit more about his ancestors.

  “Why was your grandfather fostered by the Johnsons?” I asked

  “My great-grandmother, Natalia Sergeyevna was in England and in a hurry to marry her lover, the grand duke Dimitri. Having a Romanov baby in exile was dangerous. The Soviet government issued orders to execute the whole imperial family.

  “The Johnsons had intelligence connections and were prepared to provide cover. My grandfather was given an English name, Alexander Michael Johnson. Having been adopted into an English family and given a good education, he didn’t suffer from the culture of entitlement prevalent amongst Russian emigrés. As a young man, he was sent to South Africa and the Johnsons helped him to launch a suc­cessful car importing business. It was he who created our family’s fortune. My grandfather turned out to be the most fortunate member of the Romanov family.”

  “As an idle Russian aristocrat, he would have probably died in poverty, or been hacked to pieces by Cheka,” I agreed

  “I was of the same opinion. In the main, Russian aristo­crats lacked skills. Consequently, in exile, they ended up
as parasites, or hotel doormen.”

  I liked Michael and felt bonded to him, despite our age dif­ference, because of his tragic family circumstances. He was, coincidentally, born in the year that I became a refugee. We were both products of the consequences of our births and commiserated with each other on being victims of our family circumstances. We shared devotion to the distant lands of our ancestors.

  “It’s unfair that children can’t select their own parents” was our refrain as we sat at the bar of the Dorchester Hotel in London. We met there after my business lunch.

  “My preferred parent would be a film star, with money and celebrity status, not causing any risks to my life.” Michael mused. The Italian barman overheard him and joined our chat.

  “Be careful what you wish for. Elizabeth Taylor and Richard Burton dined here. Liz was typically drunk and abusive. One evening, when her soup was served cold, she was rude to the waiters and the manager. We replaced her soup, but in revenge, the chef spat into it and so did the waiter on his way into the dining room.” Michael and I cringed, and the barman went on,

  “The Dorchester story spread quickly. Elizabeth Taylor’s dishes were routinely spat into, wherever she dined.” All three of us laughed.

  Chapter 7

  Seminars

  The OECD organised a series of business seminars in Moscow in 1991 and asked me to make presentations on investment management. Anna, our Russian interpreter, was a thirty-year-old blonde. Dressed in tasteless, oddly coloured and patterned clothes and smelling of cheap per­fume, she looked very Soviet. Anna’s parents were academ­ics and she worked in an obscure government department. We were warned that she would probably report on us to the KGB, but she was intelligent and fun to work with. Most attendees paid more attention to her than to our lecturers. During the breaks, we chatted about Russian culture and places to visit in Moscow.