by Peter Kysel
“Yes, I remember” I replied, cautiously.
“Would you be interested in an ambassadorial post?” I gulped, composed myself, and played for time.
“It would be an honour,”
“We’ll send the forms to your home address and have a follow-up conversation after you have completed them.”
Why didn’t Dienstbier channel this invitation through the embassy? Was I really talking to the Foreign Minister? What contribution could I make? Would this be an effective use of my skills? I shook my head in disbelief and sat gazing through the window of my office, over the roof tops of the Barbican, thinking,
What a turn of events. Thirty-three years ago, my school had called me an enemy of the state. Twenty years ago, my country criminalised me. Two years ago, I wanted to cancel my citizenship in despair and today the Foreign Minister has offered me the ambassadorship.
I was pleased to be asked, but reflecting on the offer, I felt little enthusiasm for the diplomatic job. I had more relevant skills as a banker.
#
Soviet Gold in London
The Gosbank delegation arrived in London to discuss the project. One of the delegation’s members was my Moscow chauffeur Andrei, who surprisingly spoke very good English. He was clearly a KGB agent planted at Gosbank. Andrei showed his sense of humour.
“Nash angliyskiy bankir. We Soviet bankers learn languages quicker than you.”
He opened his briefcase and took out a shiny gold bar, which he carefully laid on my desk, motioning me to examine it. It was a Soviet four-hundred troy ounce (12.4 kgs) bar, with the oblong stamp bearing the letters CCCP (USSR) and the hammer and sickle.
“These bars have been accepted as London good delivery (LGD) since 1937,” said Andrei proudly and added,
“The quality is excellent, 99.99% fine gold. All exported bars are manufactured at our Novosibirsk refinery plant.” I picked up the bar. The stamps confirmed its Novosibirsk origin, with the letter (H) and its specific production number B1120. The year of production, 1989, was also stamped on it. I whispered,
“It’s worth $160,000,” and put it carefully back on the desk. Next, I asked Petr Axten and John Wright to join our meeting. They both came and weighed the bar, before turning to the serious subject of the proposed cooperation.
“Did you only bring us one bar?” I asked, to break the ice, and the visitors laughed.
“If all goes well there will be another 40,000 bars like this one, on their way soon,” they responded. We looked at the gold bar lying on the desk between us, trying to visualise the hoard. John didn’t seem impressed, but our managing director’s mouth fell open. His face turned bright red and he visibly stiffened. This always happened when he became stressed. The visitors pretended not to notice.
He must suffer from high blood pressure. I hope he won’t have a stroke during this meeting.
#
Managing Director
When Peter Axten recovered his composure, he interrupted our discussion.
“I want to know delivery dates and tonnages, so that we can be prepared.” He sounded odd and we were taken aback by his abruptness.
“I’m taking charge of this project.” Andrei interrupted him angrily,
“Chairman Gerashenko appointed your international director to lead this project. Mr Axten, you don’t know our country and you don’t speak our language. Don’t patronise us. We know that you don’t have the relevant skills.” John and I cringed. The situation was becoming embarrassing. The project was imploding, but Axten didn’t pull back.
“I’ve made my decision. Tell your chairman to communicate with me.” He was growing red in the face again. Is Axten drunk, or is he on drugs? I wondered. The meeting ended and the visitors left. I didn’t bother to report the incident to the bank. John and the rest of us agreed that whistle-blowers would not be appreciated. A week later Andrei called.
“On your recommendation we have been to Jersey to form a gold management company. Our UK structure is all set up. We’ll do the same in Cyprus and I’ll be reporting to Moscow on our progress. Let’s be in touch soon.” By that time, I had become pessimistic about our involvement. I mentioned the call to John Wright, who commented,
“Axten wants to take all the glory for this project.” It was a friendly warning and it was making me anxious.
“I’ll step back. This project has become contentious. The client must decide.” I was speculating: The central bank of a sovereign country moves its gold abroad. What will happen to the gold when it arrives? It can be sold or smelted into South African gold bars. If Soviet bars disappear, who is responsible? There are huge risks and Axten, in his ignorance, is increasing them. This project has become toxic.
Officially, the Soviet Union sold 234 tonnes of gold in 1990 for $1.5 billion – at half the market price. Nobody seemed to know who received the other half of the proceeds. In addition, 500 tonnes of gold, with a value of $6.5 billion, was moved out of the Soviet Union and disappeared.
A cool $8 billion worth of gold went missing in a single year.
At that time the living conditions of millions of people in the USSR were desperate. Imprinted on my memory were the images of streets in the Soviet cities, lined with old people kneeling in the snow, begging for food with cupped hands outstretched.
#
Putsch in the USSR
The Soviet red bears set out to reverse Gorbachev’s modest reforms with a putsch. I pieced together the story from my conversations with Boris Berezovsky and others in St Petersburg. Berezovsky’s inside stories and his description of the plotters were fascinating.
The KGB chairman, Vladimir Kryuchkov, was a feared man. He was a short, chubby and balding apparatchik, who lived with his mother in an apartment close to the KGB’s Lubyanka offices in Moscow. He was ambivalent about his relations with women and cultivated a friendly demeanour but showed flashes of anger and occasional violence. His manners precluded any personal relationships. Women shied away from Kryuchkov, to the delight of his mother, who enjoyed looking after her Voloda (diminutive for Vladimir).
Kryuchkov had aspired to follow his mentor, Yuri Andropov, in leading the communist party. Young Vladimir joined the Party, as its full-time politruk (political commissar) during the war. This role allowed him to terrorise Soviet soldiers, while personally escaping fighting the Germans. The war turned him into a bully.
Voloda learned that the most important principle for the Soviet man, was to grovel to everyone above him. He ingratiated himself to Mikhail Gorbachev by appearing eager for reforms and was appointed chairman of the KGB. Three years later Kryuchkov learned that Gorbachev had lost confidence in him. He needed to strike, in order to survive. He summoned various politburo hardliners and proposed a putsch, giving it the catchy label “the state committee of the state of emergency.”
“We’ll strike when Gorbachev goes on holiday to his dacha in the Crimea,” Kryuchkov announced to the plotters assembled in his Lubyanka office. A bottle of chilled Stolichnaya was passed around to give them courage and a toast was drunk to their success. After a few glasses, they turned to Kryuchkov.
“Voloda, you have a plan, da?” Vladimir stood up. He was in an expansive mood. All eyes in the room were on him. With a glass of Stolichnaya in one hand, he adopted the famous Lenin posture, with an outstretched arm and a distant gaze. His colleagues understood the message. Voloda was looking to the future, to inspire them. He was their leader with a plan. Would the gang of eight plotters succeed in swinging back the political pendulum?
“Da towarischi, we will remove Gorbachev. I will take over as the general secretary of the Party. We will save the Soviet Union. We will give military assistance to fraternal communist parties, as we did successfully in Hungary in 1956 and in Czechoslovakia in 1968. Da. We’ll do it again. We’ll destroy counterrevolution.” The plotters were impressed. They rose, applauded and sang the Internationale.
In reality, Kryuchkov’s plan never moved beyond the arres
t of a hundred of his personal enemies. He waved the signed arrest warrants before his comrades to reassure them. Voloda had the reputation of a tough guy. During the Hungarian revolts, Ambassador Andropov, with his protegé Kryuchkov, invited local communist leaders for reconciliation talks at the Soviet embassy in Budapest. On arrival, the Hungarians leaders were arrested on Andropov’s orders and executed in the embassy compound.
“Get ready comrades, we will launch in three weeks, on 17th August. Everything will go smoothly. We’ll cut off all Gorbachev’s contact with the outside world and force him to resign. He doesn’t have the courage of great men like Stalin.” He added,
“I think you should know that Gorbachev plans to dismiss you all from your posts. Listen to this tape recording of his conversation with the Kazakh president Nazarbayev.” Kryuchkov played the edited tape recording. It removed any residual doubts and reassured the plotters of the righteousness of their actions.
The putsch was launched as planned. Kryuchkov and three other plotters flew to the Foros estate in Crimea to confront Mikhail Gorbachev. He threw them out and threatened to commit suicide rather than resign. In Moscow, tanks were sent out into the streets to occupy the city. They soon ran into massive demonstrations.
Boris Yeltsin, who was supposed to be arrested and shot, climbed on one of the tanks outside the Russian parliament and ordered the tank crews to return to their barracks. They obeyed and rumbled off.
On 21th August, the 23rd anniversary of the Soviet invasion of Czechoslovakia, the putsch was over and the gang of eight was duly arrested.
Kryuchkov succeeded in achieving the opposite of all his aims. In direct response to his attempted putsch, the Soviet Union collapsed. Fourteen of its republics deserted Russian domination. As a prisoner, Kryuchkov begged for forgiveness and blamed this moment of madness on his unhappy childhood. When he received clemency three years later, he reverted to spending the rest of his life denouncing hapless Gorbachev for throwing him out of the Foros dacha and thus ending the Soviet empire.
“The history of the USSR began and ended with a Bolshevik putsch,” laughed Berezovsky and added, “anglickiy bankir, you told me that the Czech regime was a swamp, ruled by bad bears and red wolves. They were little bears. Our Soviet bears were much bigger and more dangerous, but their putsch failed. Yeltsin will drain our swamp, you’ll see.”
On 1st January 1992, Russia became an independent country under president Yeltsin. Gorbachev was made redundant. World history changed direction. I asked Michael how Boris could have had such detailed information about the putsch.
“You told me yourself that the USSR was full of spies. Kryuchkov had Gorbachev under strict surveillance, but didn’t realise that he was, in turn, being monitored by his rivals from the St Petersburg’s KGB. Boris had connections there. I expect you’ll meet them one day.”
#
Burnt Out Red Bear
Boris Berezovsky arranged for Michael’s accommodation in the centre of the city. The landlord, Vasily Starodubtsev had fallen on hard times due to his involvement in the failed putsch and welcomed Michael’s rent. The flat was furnished with dark furniture and curtains, reminiscent of the bourgeois taste in tsarist times. The atmosphere was oppressive, but the flat was spacious and well located. The prospective landlord was intrigued as to why a foreigner, like Michael, wanted to live in Russia and predictably, suspected him of espionage.
“Why have you returned to Moscow?” asked Vasily suspiciously.
“I fell in love with the books of Maxim Gorky and decided to do a doctorate on his writings. I wanted to go back to academic life and teach Russian literature in England.” Gorky was Stalin’s favourite author and Vasily nodded approvingly when Michael added, “Literary genius should be studied in its native country. I need to learn about the context of his great stories about the collectivisation of the countryside and life in the Soviet Union before the great patriotic war.” Michael was careful to use the right description of WW2. Vasily was unconvinced and asked,
“So, why do you work in finance?”
“My parents paid for me to study accountancy. It’s a useful qualification for landing a job in Moscow, while I carry out the research for my doctorate on Maxim Gorky. If I didn’t have a paid job, I couldn’t afford to be in Russia.”
“How long will your research take?”
“At least three years.” Vasily had enough information on his prospective tenant, to pass on to his FSB (formerly KGB) contact. A few days later, with his story confirmed, Michael moved into Starodubtsev’s flat, fully aware that he would be under surveillance. He went to thank Boris, who chuckled approvingly
“When we need to pass information to the FSB, you’ll be given some extra homework. Don’t worry it’ll be innocent stuff, nothing serious.”
Still, Michael made sure that any documents left in the flat only related to his research on Gorky. Starodubtsev read them, found them fascinating and occasionally contributed his own material. Their relationship remained awkward, but with a degree of mutual accommodation.
Vasily appreciated that the rent was paid in dollars, which he traded on the black market. He was a confused man, who easily lost his train of thought. Michael often wondered how a man like Starodubtsev had ended up among the putschists, or how he had even managed to get elected to the central committee of the Party. Michael told Berezovsky
“If you ever have any information to pass on to the FSB, don’t rely on Starodubtsev’s memory. He is bound to get it wrong. Make sure that you write the message down for him.” Michael told me later
“Vasily Starodubtsev is the only Soviet bear I have met. He is dim and slow-witted. If he’s any guide to the conspirators, I am not surprised that their putsch fizzled out so quickly.”
Chapter 10
St Petersburg
I went to St Petersburg to give a seminar on privatisation and to attend the Goldman Sachs’ conference on the Future of Russia. The mayor, Alexander Sobchak opened the conference. Boris Berezovsky was there too and we met and chatted about the attempted coup d’état. He was most expansive
“The future looks much better under Yeltsin. He has committed to complete privatisation and quoted the most popular of Soviet sayings, “Who does not steal from the state…” I interrupted him and finished the sentence “… steals from his family. Yes, we had the same saying in Czechoslovakia” Berezovsky looked at me with surprise and then burst out laughing.
“So, we have exported our culture throughout the socialist bloc. Yeltsin believes that corruption is inherent in the socialist system. Where are you staying in St. Petersburg?”
“In the Europa Hotel.”
“So am I. Let’s meet there,” concluded Boris and went off to circulate among the delegates.
The Grand Hotel Europa was in the city centre, just off its main thoroughfare, the Nevsky Prospect. It was a luxurious art nouveau building, decorated in marble, with extravagant stained-glass windows. The glass roof in its L’Europe restaurant and Mezzanine cafe gave its public areas light and opulence. Renovation of the hotel had just been completed. It stood in huge contrast to the dilapidated buildings in the surrounding streets. The food was refined, even in the constrained times of the early 1990s. All visitors had to pass through metal detectors and hand over their weapons in the cloakroom, in exchange for a receipt. This precaution gave us some assurance that disputes would not be negotiated, in the traditional Russian manner, on the premises.
It was eight months after the attempted coup and four months after the disintegration of the USSR. Russia was now an independent country. There were very few guests in the hotel, partly because the country was going through a semi-anarchic dispute about the country’s governance between Yeltsin and the pro-communist Congress of People’s deputies. The economy was on a downward spiral.
Later that day I saw Boris again in the cafe, where he introduced me to his companion “I’m setting up a car dealership in Petersburg, with
the help of Vladimir Vladimirovich, let me introduce you.” I shook hands with a short, quiet, observant man, whose eyes seemed to pierce right through me. Eventually, Borby brought Vladimir Vladimirovich Putin to Moscow and arranged for him to become the prime minister of Russia and ultimately the president. I assumed that Vladimir was the source of Borby’s information about Kryuchkov and his putschists.
“Your friend Michael Johnson is here somewhere. His accounting qualifications have come in useful. I gave him a job as my internal auditor. I trust my angliyskiy bukhgalter (English accountant) more that any Russian,” laughed Boris. Vladimir just watched, until our conversation switched into Russian and I said my goodbyes and left.
I telephoned Michael in his room and suggested a walk. We met in reception and walked down the busy Nevsky Prospect, before turning on to the virtually empty Moiky River Embankment. Michael was enthusiastic about his new job and chatted briefly about it. With his natural charm, Michael made friends at work. To my relief, Boris was only employing Michael to monitor his legitimate business ventures. Boris didn’t bother to corrupt Michael with girls, or with his dubious business activities. Michael had done more research into his family history and explained, with a chuckle
“According to family gossip, my great-uncle Gyorgy Mikhailovich was conceived in St Petersburg in October 1909, when my great-grandmother Natalia Sergeievna stayed in the Europa Hotel with grand duke Mikhail.” We were going to have an amusing afternoon tracing the actions of Michael’s family.
“Congratulations. Have you also managed to locate the room?
“Yes. It could be your suite. It had a private entrance from a side street. Incidentally, I was told that the mayor Sobchak is a monarchist. Do you think I should get in touch with him?” His comment alarmed me, and I spun around to check that we were not being followed or overheard. Moiky reki Naberezhnaya was empty. I whispered