Berezovsky v Abramovich
4/2/12 20:06![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
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talkpoliticsHere's a glimpse at the muddy Russian politics that has become so dominated by various "businessmen" with dubious reputation in the recent decades that it is hard to imagine any description of Russia without the word "oligarchy".
It all began in the 90s. Maybe in order to understand the Russia of the 90s we'd do good if we read a bit of Shakespeare. At least that's what the British lawyer of the oligarch Roman Abramovich, Jonathan Sumption once recommended as he was defending his client in court against a $6 billion claim from another key figure in Russian big business, Boris Berezovsky. The claim was for some shares in the SibNeft oil company, which Berezovsky is claiming that he and another partner of his (the late Arkady Patarkatsishvili) had been forced to sell to Abramovich far below their market price, due to political pressure from Kremlin. The other claim in this court battle were some shares in the aluminium giant RusAl (the Russians are crazy about weird abbreviations with zero imagination, like MosFilm, MinAtom, RosCosmos, etc).
During the court hearings that lasted for months and ended a couple of weeks ago, the London audience witnessed a re-enactment of the murky times of the 90s when most Russian oligarchs were being created. A wild, turbulent time full of dangers and plenty of opportunity. "It's not easy to judge the actions of the people who had to live in such a world. We'd have to get back to the 15th century if we are to find anything resembling that in our history", Sumption said. Curious fact: the court case is in London because Berezovsky insisted that the shady deals had been signed on British territory and by the British law, whose loopholes allowed the owner of Chelsea FC to acquire ownership of the company shares without obstacles. Of course Abramovich is denying the accusations, but still he accepted London as the arena for this battle, because Berezovsky cannot return to Russia, where the authorities have an arrest warrant waiting for him (for various economic crimes).
The last few months haven't revealed anything about the two sides that wasn't already publicly known. Most of big business in Russia has emerged largely under the political protection of power-brokers in Moscow who were handing out state assets in exchange for support; a great part of all this was done in the dark, under the table, in shady deals that left no recorded traces; racketeering, whether private or government, was a usual form of communication, and the members of this club were meeting in places like London, St.Moritz, the Carribean islands and Sardinia, on private jets and yachts, and secluded mansions worth millions of dollars. But now, under the gaze of the court and the public, such big players from that shady world were compelled to give testimony (whether reluctantly or enthusiastically) about the unpleasant details from that recent past which many people in Russia are still trying to forget.
The following exchange between Sumption (a former supreme judge of Britain btw) and Berezovsky is quite telling. The lawyer is quoting words of former Russian president Boris Yeltsin:
"You will receive the support of my state television (ORT), and in exchange you will put me in a position to earn a substantial amount of money through these two enterprises (SibNeft and ORT)."
"Yes, that's what he said to me", Berezovsky confirms.
"Would it be fair to call this a devious corrupt deal?"
"Not at all", Berezovsky says without blinking an eye.
The cynicism in all this is mind-boggling. Boris Berezovsky is openly admitting that he had used his political influence to appropriate a large part of the Russian oil and aluminium industry, in his favor and on behalf of Abramovich, and his problem is not the corrupt nature of such a deal - his problem is that Abramovich didn't pay him his share of it! And at the same time Abramovich doesn't shy away from admitting having paid vast amounts of money, which he openly calls "patronage money" (including such gifts like estates in Southern France and private jets). He also founded a handful of fictitious off-shore companies to evade taxes in both Russia and Britain and to siphon money out of these firms through privatization deals like this one. And what does he have to say about his former partner Berezovsky? "After the elections in 1996 he turned himself into a political corporation, the boss of big business, one who we were all working for". And how about this: "He has already received $2.5 billion from me, that should've been enough. This is a wealth that I have earned through hard work and taking all the risks that come with doing business in Russia". And at some other point he admits, "I was meaning to disclose all my assets and income, but then I decided that this way I would only create trouble for myself".
The full testimony of these two guys (see here and here) is really some good read that might end up in the studybooks of Russian history (or the manuals of any internal revenue service). There is no documentation for many of those deals, neither witnesses who are still among the living. But whether Berezovsky would eventually get a few billion dollars from Abramovich and would thus manage to indirectly humiliate Abramovich's buddy Putin, or not, doesn't matter that much at this point. The scandalous details like the purchase of innumerable luxurious estates, the transfer of millions of cash in bags, or the yacht voyages to various exotic places (at a time when the Russian economy was steadily going toward its collapse in 1998) doesn't matter either now. For the Russians, and probably for all other former East Bloc peoples, the more important thing is the completion of the tragically familiar picture of a whole "lost period".
They've all got the confirmation that all this time, the main thing has always been to have *krysha*, a roof above your head. I.e. someone to protect you politically and economically. Without that, you were dead meat, or just a little mouse worth of nothing. All the big guys who are now calling the shots in big business and big politics in Russia, have reached that place thanks to the power nomenclature. No self-made millionaires, not even one Bill GAtes or Steve Jobs among them. And there won't be any time soon. This sad but obvious truth is again being thrown into the eyes of the Russians, even from the remote courthouse hall in London where two suddenly enriched "businessmen" are bickering over the pieces of a cake that they both admittedly stole from the state - or more precisely, were gifted. And mark my words, this won't be the last lawsuit of this sort. There'll be more.
Regardless of the outcome of this Berezovsky v Abramovich battle, the dam has been released. Because during the huge passing of assets and money from one's hands into another's, many have remained dissatisfied, and part of them are only just beginning to use the tools of the British justice system to resurrect their claims and dig out the old battle axes. Two more lawsuits are pending this year - in one an oligarch called Michael Chorny will stand against another, Oleg Deripaska. And all this humiliation is only at the Russians' expense, and also for Russia - it's recent history, dragged through the mud from country to country, and all its dirty laundry being exposed in front of a foreign court and for the lulz of a foreign public (one that doesn't nourish very friendly feelings for Russia, btw). And Putin & Co. will hardly feel very nice in the face of this proof of the dysfunctional and corrupt judicial system in their country.
In his only comment on the case so far, Putin coldly remarked that he'd have preferred if the two businessmen had chosen Moscow to solve their issues. "The money was stolen here, it's here where they should be dividing it". Meanwhile, the major Russian business newspaper Kommersant called the events in London "A delegitimation of the Russian elite". And Putin himself has admitted that there are two types of "elite" in Russia - one of the revolution and progress, and the other of stagnation and corruption. Given the things happening on the Russian streets lately, the new-old president would suffer a serious dent on his reputation if the Russians conclude that he belongs to that type of "elite" who has chosen to live in London and solve their issues in another country.
It all began in the 90s. Maybe in order to understand the Russia of the 90s we'd do good if we read a bit of Shakespeare. At least that's what the British lawyer of the oligarch Roman Abramovich, Jonathan Sumption once recommended as he was defending his client in court against a $6 billion claim from another key figure in Russian big business, Boris Berezovsky. The claim was for some shares in the SibNeft oil company, which Berezovsky is claiming that he and another partner of his (the late Arkady Patarkatsishvili) had been forced to sell to Abramovich far below their market price, due to political pressure from Kremlin. The other claim in this court battle were some shares in the aluminium giant RusAl (the Russians are crazy about weird abbreviations with zero imagination, like MosFilm, MinAtom, RosCosmos, etc).
During the court hearings that lasted for months and ended a couple of weeks ago, the London audience witnessed a re-enactment of the murky times of the 90s when most Russian oligarchs were being created. A wild, turbulent time full of dangers and plenty of opportunity. "It's not easy to judge the actions of the people who had to live in such a world. We'd have to get back to the 15th century if we are to find anything resembling that in our history", Sumption said. Curious fact: the court case is in London because Berezovsky insisted that the shady deals had been signed on British territory and by the British law, whose loopholes allowed the owner of Chelsea FC to acquire ownership of the company shares without obstacles. Of course Abramovich is denying the accusations, but still he accepted London as the arena for this battle, because Berezovsky cannot return to Russia, where the authorities have an arrest warrant waiting for him (for various economic crimes).
The last few months haven't revealed anything about the two sides that wasn't already publicly known. Most of big business in Russia has emerged largely under the political protection of power-brokers in Moscow who were handing out state assets in exchange for support; a great part of all this was done in the dark, under the table, in shady deals that left no recorded traces; racketeering, whether private or government, was a usual form of communication, and the members of this club were meeting in places like London, St.Moritz, the Carribean islands and Sardinia, on private jets and yachts, and secluded mansions worth millions of dollars. But now, under the gaze of the court and the public, such big players from that shady world were compelled to give testimony (whether reluctantly or enthusiastically) about the unpleasant details from that recent past which many people in Russia are still trying to forget.
The following exchange between Sumption (a former supreme judge of Britain btw) and Berezovsky is quite telling. The lawyer is quoting words of former Russian president Boris Yeltsin:
"You will receive the support of my state television (ORT), and in exchange you will put me in a position to earn a substantial amount of money through these two enterprises (SibNeft and ORT)."
"Yes, that's what he said to me", Berezovsky confirms.
"Would it be fair to call this a devious corrupt deal?"
"Not at all", Berezovsky says without blinking an eye.
The cynicism in all this is mind-boggling. Boris Berezovsky is openly admitting that he had used his political influence to appropriate a large part of the Russian oil and aluminium industry, in his favor and on behalf of Abramovich, and his problem is not the corrupt nature of such a deal - his problem is that Abramovich didn't pay him his share of it! And at the same time Abramovich doesn't shy away from admitting having paid vast amounts of money, which he openly calls "patronage money" (including such gifts like estates in Southern France and private jets). He also founded a handful of fictitious off-shore companies to evade taxes in both Russia and Britain and to siphon money out of these firms through privatization deals like this one. And what does he have to say about his former partner Berezovsky? "After the elections in 1996 he turned himself into a political corporation, the boss of big business, one who we were all working for". And how about this: "He has already received $2.5 billion from me, that should've been enough. This is a wealth that I have earned through hard work and taking all the risks that come with doing business in Russia". And at some other point he admits, "I was meaning to disclose all my assets and income, but then I decided that this way I would only create trouble for myself".
The full testimony of these two guys (see here and here) is really some good read that might end up in the studybooks of Russian history (or the manuals of any internal revenue service). There is no documentation for many of those deals, neither witnesses who are still among the living. But whether Berezovsky would eventually get a few billion dollars from Abramovich and would thus manage to indirectly humiliate Abramovich's buddy Putin, or not, doesn't matter that much at this point. The scandalous details like the purchase of innumerable luxurious estates, the transfer of millions of cash in bags, or the yacht voyages to various exotic places (at a time when the Russian economy was steadily going toward its collapse in 1998) doesn't matter either now. For the Russians, and probably for all other former East Bloc peoples, the more important thing is the completion of the tragically familiar picture of a whole "lost period".
They've all got the confirmation that all this time, the main thing has always been to have *krysha*, a roof above your head. I.e. someone to protect you politically and economically. Without that, you were dead meat, or just a little mouse worth of nothing. All the big guys who are now calling the shots in big business and big politics in Russia, have reached that place thanks to the power nomenclature. No self-made millionaires, not even one Bill GAtes or Steve Jobs among them. And there won't be any time soon. This sad but obvious truth is again being thrown into the eyes of the Russians, even from the remote courthouse hall in London where two suddenly enriched "businessmen" are bickering over the pieces of a cake that they both admittedly stole from the state - or more precisely, were gifted. And mark my words, this won't be the last lawsuit of this sort. There'll be more.
Regardless of the outcome of this Berezovsky v Abramovich battle, the dam has been released. Because during the huge passing of assets and money from one's hands into another's, many have remained dissatisfied, and part of them are only just beginning to use the tools of the British justice system to resurrect their claims and dig out the old battle axes. Two more lawsuits are pending this year - in one an oligarch called Michael Chorny will stand against another, Oleg Deripaska. And all this humiliation is only at the Russians' expense, and also for Russia - it's recent history, dragged through the mud from country to country, and all its dirty laundry being exposed in front of a foreign court and for the lulz of a foreign public (one that doesn't nourish very friendly feelings for Russia, btw). And Putin & Co. will hardly feel very nice in the face of this proof of the dysfunctional and corrupt judicial system in their country.
In his only comment on the case so far, Putin coldly remarked that he'd have preferred if the two businessmen had chosen Moscow to solve their issues. "The money was stolen here, it's here where they should be dividing it". Meanwhile, the major Russian business newspaper Kommersant called the events in London "A delegitimation of the Russian elite". And Putin himself has admitted that there are two types of "elite" in Russia - one of the revolution and progress, and the other of stagnation and corruption. Given the things happening on the Russian streets lately, the new-old president would suffer a serious dent on his reputation if the Russians conclude that he belongs to that type of "elite" who has chosen to live in London and solve their issues in another country.
(no subject)
Date: 4/2/12 18:46 (UTC)Too bad for the Russians, who've had to pay the price for these shenanigans. Of course they won't see their money back anytime soon.
(no subject)
Date: 4/2/12 19:47 (UTC)(no subject)
Date: 4/2/12 20:00 (UTC)(no subject)
Date: 4/2/12 20:26 (UTC)(no subject)
Date: 4/2/12 21:15 (UTC)hahahah It's like reporting to the Sheriff when your coke dealer doesn't give you all your coke :P
(no subject)
Date: 4/2/12 21:17 (UTC)(no subject)
Date: 4/2/12 22:18 (UTC)(no subject)
Date: 5/2/12 18:30 (UTC)(no subject)
Date: 5/2/12 18:35 (UTC)(no subject)
Date: 5/2/12 20:08 (UTC)