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Yanks to the Rescue: The Secret Story of How American Advisers Helped Yeltsin Win
by Michael Kramer
Moscow
Time Magazine
July 15, 1996

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Four More Years: Yeltsin campaigns with his daughter shortly before the final vote

Exclusive: Rescuing Boris: The secret story of how four U.S. advisers used polls, focus groups, negative ads and all the other techniques of American campaigning to help Borin Yeltsin win

IN THE END THE RUSSIAN PEOPLE CHOSE -- AND CHOSE decisively -- to reject the past. Voting in the final round of the presidential election last week, they preferred Boris Yeltsin to his Communist rival Gennadi Zyuganov by a margin of 13 percentage points. He is far from the ideal democrat or reformer, and his lieutenants Victor Chernomyrdin and Alexander Lebed are already squabbling over power, but Yeltsin is arguably the best hope Russia has for moving toward pluralism and an open economy. By reelecting him, the Russians defied predictions that they might willingly resubmit themselves to communist rule.

The outcome was by no means inevitable. Last winter Yeltsin's approval ratings were in the single digits. There are many reasons for his change in fortune, but a crucial one has remained a secret. For four months, a group of American political consultants clandestinely participated in guiding Yeltsin's campaign. Here is the inside story of how these advisers helped Yeltsin achieve the victory that will keep reform in Russia alive.

ALL DURING THE LONG EVENING of Dec. 17, 1995, Felix Braynin sat transfixed before a television set in the living room of a government guest house in Moscow. He didn't like what he saw. Returns from the elections for the Duma, the lower of Russia's parliament, represented a devastating setback for reform-minded parties, including the one linked to Boris Yeltsin. The Communists and their allies were on their way to controlling the body, a disturbing development because in six months Russians would vote for President. Yeltsin's standing in the polls was abysmal, a reflection of his brutal misadventure in Chechnya; his increasing authoritarianism; and his economic reform program, which has brought about corruption and widespread suffering. Considering the country's deep dislike of Yeltsin and the Communists' surge, Braynin, a close friend of some of Yeltsin's top aides, thought that something radical had to be done.

A compact, powerfully built former professional hockey and soccer player in his native Belarus, Braynin, 48, had immigrated to San Francisco in 1979. With $200 in his pocket, he began painting houses. He is now a wealthy management consultant who advises Americans interested in investing in Russia.

Most of Yeltsin's confidants believed the President would be magically reelected despite the Duma catastrophe, but Braynin thought otherwise. The President, he reasoned, could lose without the same kind of professional assistance U.S. office seekers employ as a matter of course. Braynin began a series of confidential discussions with Yeltsin's aides, including one with First Deputy Prime Minister Oleg Soskovets, who at the time was in charge of the President's nascent re-election effort. Finally, in early February, Braynin was instructed to "find some Americans" but to proceed discreetly. "Secrecy was paramount," says Braynin. "Everyone realized that if the Communists knew about this before the election, they would attack Yeltsin as an American tool. We badly needed the team, but having them was a big risk."

To "find some Americans," Braynin worked through Fred Lowell, a San Francisco lawyer with close ties to California's Republican Party. On Feb. 14, Lowell called Joe Shumate, a G.O.P. expert in political data analysis who had served as deputy chief of staff to California Governor Pete Wilson. Since Wilson's drive for the 1996 Republican presidential nomination had ended almost before it began, Lowell thought Shumate and George Gorton, Wilson's longtime top strategist, might be available to help Yeltsin. They were -- and they immediately enlisted Richard Dresner, a New York-based consultant who had worked with them on many of Wilson's campaigns.

Dresner had another connection that would prove useful later on. In the late 1970s and early '80s, he had joined with Dick Morris to help Bill Clinton get elected Governor of Arkansas.
As Clinton's current political guru, Morris became the middleman on those few occasions when the Americans sought the Administration's help in Yeltsin's re-election drive. So while Clinton was uninvolved with Yeltsin's recruitment of the American advisers, the Administration knew of their existence -- and although Dresner denies dealing with Morris, three other sources have told TIME that on at least two occasions the teams contacts with Morris were "helpful."

A week after the Valentine's Day call from Lowell, Dresner was in Moscow. The Yeltsin campaign was at sea. Five candidates, led by Communist Gennadi Zyuganov, were ahead of Yeltsin in some polls. The President was favored by only 6% of the electorate and was "trusted" as a competent leader by an even smaller proportion. "In the U.S.," says Dresner, "you'd advise a pol with those kinds of numbers to get another occupation.
"

For two days the supersecretive Yeltsin high command avoided Dresner, and none of the team ever actually met the President. "There are too many factions and too many leaks to risk your dealing with him directly," Braynin explained to Dresner. "You are our biggest secret."

Then, at 3 p.m. on Feb. 27, Dresner met with Soskovets. In English, the First Deputy Prime Minister asked, "How's our friend Bill doing?" Most of the hour-long session was spent discussing Clinton's reelection prospects. Dresner had prepared a five-page proposal that called for the Americans to "introduce your campaign staff to sophisticated methods of message development, polling, voter contact and campaign organization."

Although Bush did not develop a close relationship with Yeltsin, his successor as president of the United States, Bill Clinton did....

During his first meeting with Yeltsin as president at the Vancouver summit, Clinton not only pledged financial support for the Yeltsin government in Russia but openly endorsed the Russian president as America’s horse in the show-down between the president and parliament, saying to Yeltsin in front of the press, “Mr. President, our nation will not stand on the sidelines when it comes to democracy in Russia. We know where we stand…. We actively support reform and reformers and you in Russia.” [94]

-- Transitions to Democracy: A Comparative Perspective, by Kathryn Stoner, with Michael McFaul


Soskovets had already read Dresner's paper and pointed to a calendar on his desk The days remaining before the presidential election's first round on June 16 were highlighted in large, bold numbers. "There's not much time," he said. "You are hired. I will tell the President that we have the Americans." And then Soskovets ominously added a thought that would reverberate in early May. Alluding to Yeltsin's poor standing and the reluctance of his aides ever to yield power to the Communists, Soskovets told Dresner, "One of your tasks is to advise us, a month from the election, about whether we should call it off if you determine that we're going to lose."

To preserve security, a contract was drawn between the International Industrial Bancorp Inc. of San Francisco (a company Braynin managed for its Moscow parent) and Dresner-Wickers (Dresner's consulting firm in Bedford Hills, New York). The Americans would work for four months, beginning March 1. They would be paid $250,000 plus all expenses and have an unlimited budget for polling, focus groups and other research. A week later, they were working full time, but the boss was not Soskovets.

Over the past few months, the Russian and Western press have identified six different people as Yeltsin's campaign manager. In fact, the person really in charge was Yeltsin's daughter Tatiana Dyachenko, 36, a computer engineer with no previous political experience. While those in the campaign's upper reaches have always known that Dyachenko was the key cog in the apparatus -- if only because she alone saw the man she routinely calls "Papa" on a daily basis -- her role has been widely misunderstood. After dodging the media for months, Dyachenko last week described her job to the Russian press: ''I'm kind of involved in everything. I'm everywhere -- everywhere there's a weak link."

THE HISTORY OF "TATIANA'S emergence is really quite simple," explains Valentin Yumachev, Yeltsin's close friend and ghostwriter. "The President decided in February that the campaign Soskovets was running was going nowhere. He needed someone he could trust completely, and she was it." None of Yeltsin's other senior campaign officials was "what you would call pleased with Tatiana's placement," adds Pavel Borodin, Yeltsin's Minister of the Presidency, the government's general-services manager. "But because she had no personal agenda they couldn't plot against her. Her power obviously derived from that, but also from her native intelligence and the knowledge she gained from the Americans, who brought us a professionalism and dispassion none of us was really used to."

 
One of your tasks is to advise us whether we should call off the election if you determine we're going to lose.


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ROOM 1120

The Americans set up their headquarters in Room 1120 of the President Hotel in Moscow. Yeltsin's daughter Tatiana Dyachenko, the real behind-the-scenes boss of the campaign, was in Room 1119. From left:

STEVEN MOORE

Moore is the public relations specialist the team hired

GEORGE GORTON

A longtime strategist for California Governor Pete Wilson, Gorton told Yeltsin's aides the election was "in the bag" even though he wasn't so sure

JOE SHUMATE

When everyone was worried about turnout the day of the first round, Shumate, a polling expert, said, "It won't go below 65%, and our model shows we win with that"

RICHARD DRESNER

In the late 1970s and early '80s, Dresner joined with Dick Morris to help elect Bill Clinton Governor of Arkansas. Sources say the team's contacts with Morris, Clinton's current political guru, were "helpful".

FELIX BRAYNIN

Braynin, an immigrant to the U.S., brought in the Americans. "Secrecy was paramount," he said. "If the Communists knew about this, they would attack Yeltsin as an American tool"


The American team hired two young men, Braynin's son Alan and Steven Moore, a public relations specialist from Washington, to assist them, and promptly established its office in a two-room suite at the President Hotel. The Americans lived elsewhere in the hotel and were provided with a car, a former KGB agent as a driver, and two bodyguards. They were told they should assume that their phones and rooms were bugged, that they should leave the hotel only infrequently, and that they should avoid the campaign's other staff members.

The Americans managed to hide their identity for many months. In interviewing various polling and focus-group companies before hiring three, they described themselves as representing Americans eager to sell thin-screen televisions in Russia. "That story held for far longer than it ever should have," says Shumate. The Americans carried multiple-entry visas identifying them as working for the ''Administration of the President of the Russian Federation," a bit of obviousness that constantly threatened to undermine all the supposed secrecy surrounding their real work.

The President is not a normal hotel. It is owned by the office of the President, and residence is by invitation only. A fence surrounds the property, which is patrolled by police armed with machine guns and wearing bulletproof vests. When Dyachenko moved her own office to the hotel to be near the Americans, the rest of the campaign took three floors of offices there as well. Yeltsin's badly split Russian advisers quickly set up separate fiefdoms on the eighth, ninth and 10th floors. Dyachenko worked almost exclusively on the 11th in Room 1119, directly across the hall from the Americans in 1120. She and they shared two secretaries, a translator, and fax, copying and computer-printing machines.

By the end, the team's office resembled a typical American campaign headquarters. Soda bottles and old food shared space with computer printouts. Graphs charting Yeltsin's progress in the polls hung on the walls, and the entire scene was dominated by a color-coded map of Russia with Post-it notes describing the vote expected in the nation's various regions. A safe stood unused, and documents intended for a shredder remained intact, in plain view.

Gorton followed Dresner to Moscow and encountered in Dyachenko a shy, intelligent and idealistic young woman who for some time recoiled at even the most mild American-style dirty trick. "But it wouldn't be fair," Gorton recalls her saying when he advised that Zyuganov be trailed by heckling "truth squads" designed to goad him into losing his temper. At their first meeting across a long table covered in green felt, Dyachenko confided, "I don't know this business. I don't know what to ask." For a few weeks, says Gorton, "the task was simple education, Campaigning 101, stuff like the proper uses of polling and the need to test via focus groups just about everything the campaign was doing, or thinking of doing."

Yeltsin's staff brought a set of potentially disastrous biases to the campaign. They thought the polls they read in the papers were good enough to determine strategy, and because so many of their allies had failed miserably in the Duma elections despite spending huge sums on television commercials, they believed political advertising was useless in Russia.

But the polling was inaccurate and unsophisticated and thus virtually useless in determining how thematically to guide the effort. "The pollsters asked mostly horserace questions," explains Dresner. "The focus-group operators were in love with indirection and literally asked people to answer questions like, 'If Yeltsin were a tree, what kind of tree would he be?' We needed to know whether voters would move to Yeltsin if he adopted a particular policy, but for that crucial purpose the research in hand was totally uninformative. As for the TV spots used in the Duma elections, they were creative and pretty, but they were far from hard-hitting. ''All of that," says Shumate, "had to be explained to a group of people who, no matter their professed commitment to democracy, were trapped in a classic Soviet mind-set. They thought they could win simply by telling big shots like the directors of factories to instruct their employees how to vote."

Starting from scratch, Gorton calmly explained to Dyachenko that she and her colleagues must suspend their beliefs. "You live in Moscow and travel in the most elite circles," he said. "Because you're smart, you are used to trusting your instincts. You can't do that in this kind of work. You have to know what the people you don't know are thinking."

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Bad ratings on the perception analyzer for a Yeltsin speech

SHAPING THE IMAGE

The U.S. team imported a variety of tactics that had never been used in Russian campaigns before. The "perception analyzer" above, common in the U.S., measures the responses of audience members as they turn a dial. The Americans established their credibility by using it to explain why a Yeltsin speech flopped. They also tested themes with focus groups, top right, calling 20 emergency tests between the first and second rounds. As for TV ads, bottom right, the team urged that they be used to attack the Communists. Dyachenko, meanwhile, near right, served as her father's all-purpose aide.

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Daughter, manager, stylist -- Dyachenko prepares Yeltsin for a TV taping


And then the team went to work. A great deal of their communication with Dyachenko and Yeltsin's other aides was conducted by written memorandums. "Translation was a constant problem," says Dresner. "We spent a full day trying to convey what we meant by having Yeltsin stay 'on message." Minister Borodin says, "Having the memos let the President consider them calmly. We had many discussions about the recommendations and in the end adopted most everything the Americans advised."

One of the team's first memos, designed to buy time for the Americans as they gave themselves a crash course on Russia, was titled "Why Bush Lost." Actually, the parallels were eerie. George Bush's complacency almost exactly resembled Yeltsin's. Like Bush's, the Yeltsin team thought the nation's economy was improving and that the President would receive credit for it; in fact, only a small segment of the population enjoys whatever progress there has been. Like Bush, Yeltsin simply refused to believe that the voters would elect his opponent. Like Bush's, the Yeltsin campaign was in disarray as factions fought for control. And also as with Bush, there was no clearly focused Yeltsin message, just a melange of ideas -- and even then, no disciplined plan for their delivery or appreciation of the need for such a plan.

Even a cursory reading of the Russian press quickly convinced the Americans that virtually the entire nation was furious about the salaries government workers had been owed for months on end. When Yeltsin's aides explained that the President had already promised to correct the back-pay problem, the droopy-eyed Dresner shook his head in disbelief. "You can't just promise these things," he told Dyachenko. "You have to do them. And then you have to make sure the people know what you've done."

That remark presaged a campaign-long insistence on a standard American campaign practice -- repetition. "Whatever it is that we're going to say and do," Gorton explained to Yeltsin's aides, "we have to repeat it between eight and 12 times." Those numbers were invented. "The Russians believe that anything that's worthwhile is scientifically based," says Shumate. "This gave us a leg up when we started to seriously use focus groups to guide campaign policy, but right at the start it let us pretend that we knew more than we really did. There's no data supporting how many times something needs to be repeated, but the Russians bought it as gospel."

With back pay identified as among the most irksome issues, the team advised that Yeltsin haul officials on the carpet for failing to distribute the cash as he'd directed. The President embraced that suggestion with relish, and the press eagerly reported the boss's taking his subordinates to task.

Stalin had higher positives and lower negatives than Yeltsin. We tested the two in polls and focus groups.


CLEVER AS THEY MAY HAVE been, that and similar tactical strokes were small beer. Yeltsin's problems were too big to be solved simply by delivering what people knew was due them in the first place. Even before their polling confirmed their suspicions, the Americans intuited that Yeltsin would lose and lose badly if the election were a referendum on his stewardship. Most Russians, the polls and focus groups found, perceived Yeltsin as a friend who had betrayed them, a populist who had become imperial. "Stalin had higher positives and lower negatives than Yeltsin," says Dresner. "We actually tested the two in polls and focus groups. More than 60% of the electorate believed Yeltsin was corrupt; more than 65% believed he had wrecked the economy. We were in a deep, deep hole."

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Focus groups indicated that many people thought of Yeltsin as a friend who had betrayed them

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One ad evokes the bad old days; the other shows slogans about moving forward, not backward


In one of the team's early memos, a 10-page document dated March 2, the Americans summed up the situation: "Voters don't approve of the job Yeltsin is doing, don't think things will ever get any better and prefer the Communists' approach.

A hallmark of the old socialist system was the provision of a basic level of social protection to all its citizens, including universal subsidies for housing, utilities, and social services, and income after retirement, irrespective of need....

By the end of 2000, USAID will have closed bilateral assistance missions in eight of the 27 countries, all in the Northern Tier: Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia. ...

Progress in the rest of the region is mixed....

The turmoil and pain resulting from incomplete reforms have discouraged citizens and led many to long for the certainty of the old Soviet days.

-- A Decade of Change: Profiles of USAID Assistance to Europe and Eurasia, by USAID


There exists only one very simple strategy for winning: first, becoming the only alternative to the Communists; and second, making the people see that the Communists must be stopped at all costs."

In hindsight, the need for an anticommunist emphasis by the Yeltsin campaign -- the need to "go negative" -- seems self-evident. But when the Americans first harped on anticommunism as the "only" route to victory, many in the campaign resisted. And despite their status and patronage, the Americans had to fight long and hard before that core strategy was accepted. As Dyachenko told the team after reading the memo, "We have many factions and each has its own view, but most everyone agrees that with communism coming back all over Eastern Europe and with Stalin's reputation rising here, a campaign based on anti-communism is wrong for us."

The argument over the campaign's central message raged all through March. Matters finally came to a head in early April as Yeltsin prepared to give a speech unveiling his campaign program. That address was expected to signal the campaign's substance and tone, and it became a major battleground for control of the campaign
. In a nine-point member dated April 2 that covered content, theme and staging, the team wrote that the "overall goal of the kickoff speech [should be] to demonstrate to the average Russian that Yeltsin understands the suffering the country has been going through ... The President will be talking to people in their homes through their TV sets. These average people are the true audience. The people in the hall are props. If this event is successful, it will show that Yeltsin the politician is guided by personal concerns that are in tune with those of most other Russians."

In 1989, the state controlled almost every aspect of economic activity—bureaucrats set prices, established production quotas for factories and farms, decided which companies got credit and how much, and determined wages and working conditions.

Governments owned not only utilities and public transportation, but almost every other economic enterprise as well. Private businesses were banned or severely limited. The region was filled with factories employing thousands of workers they didn't need, to produce shoddy goods that no one wanted. For years, the whole system was propped up by subsidies and noncommercial trading relationships and sustained by wasteful use of energy that polluted the land, air and water.

That system crumbled when the Berlin Wall fell and the Soviet Union imploded. Today, the countries of the region are moving—some quickly, and some far too slowly—toward open, market-driven economies. Prices have been freed. State-owned enterprises have been sold to private owners. New economic institutions are leading to improved economic policies and management. A commercial law framework is being put in place and enforced. Sound banking systems and practices are beginning to emerge. Commercial lending to productive private enterprises is growing.....

During the Soviet period, the price of natural gas was kept so artificially low that Russians joked it was cheaper to leave a gas stove on all the time than to waste matches lighting it. The result, of course, was that huge amounts of natural gas were wasted. Although the wholesale price of gas rose after 1991, consumers did not conserve, mainly because most Russian apartments do not have individual gas meters. A USAID program that links a U.S. utility and Russian counterpart is helping to change that....

Creating market economies and establishing democracy offer the people of Central and Eastern Europe and Eurasia the best long-term hope for higher living standards and a better quality of life. In the short and medium term, however, the weight of change has taken a heavy toll on social services and benefits and caused unemployment and poverty to rise....

USAID has been a leader, both in responding to crises and in establishing social programs that make a lasting difference. USAID has worked closely with international donors to meet the region's emergency needs for food, shelter, fuel and medical supplies. A range of cooperating organizations have laid the foundation for in-depth solutions to the region’s social problems, by helping groups and communities develop the skills, resources and expertise needed to address these challenges.....

Early in the decade, the Ukrainian Government recognized that it had to take a close look at government spending levels and begin to tackle the issue of universal subsidies. In close coordination with local governments, Ukraine initiated a policy which introduced the recovery of real costs for housing and utilities while also protecting the neediest. Universal subsidies for communal services were replaced with financial assistance targeted to help the poor. USAID provided technical expertise to help the municipalities conduct income surveys and objectively determine cut-off points for government aid. Three months after enactment of the enabling legislation, the national housing subsidy program opened 750 offices across the country. As many families started to pay for housing and related services, those in the low income brackets received subsidies. By 1999, over four million families were being helped with targeted subsidies and the government was realizing a net budget savings of $1.2 billion. The success of this program demonstrated that economic reform could be compatible with social protection and laid the groundwork for other targeted social assistance programs in the region.

-- A Decade of Change: Profiles of USAID Assistance to Europe and Eurasia, by USAID


The Americans wanted a diverse audience, "not just middle-aged guys in suits," as the memo put it. They wanted women and students and popular officials like the mayor of Moscow to stand by the President's side.



"Too many Russians believe Yeltsin is an isolated man who can't be trusted, a man surrounded by a handful of advisers who have their own agenda," the Americans explained. They also wanted a brief speech that television viewers might actually sit through. "No more than 15 minutes," they advised. And they wanted Yeltsin to enter the hall through a large and boisterous crowd that would mob him.

They got none of it. Yeltsin spoke for almost an hour. Without so much as a pat on the back, he strode to the stage to the unenthusiastic, rhythmic clapping of middle-aged guys in suits. More popular leaders did not stand beside him because his Russian aides feared his being overshadowed. He wandered across themes and left no one with a sense of confidence. He was terrible. "The factions won," his daughter told the team afterward. "They were scared of the kind of things you recommended."


Angry about losing the battle over the speech, and certain it represented a disastrous trend in the campaign, the Americans set out to prove their point after the fact. They replayed excerpts of the address -- and some other film footage and still photographs of Yeltsin -- for an audience of 40 Russians wired to a "perception analyzer," an instrument often used in the U.S. Audiences have their hands on dials and are asked to move them in different directions to indicate their degree of interest and approval of what they are seeing and hearing. An electronically produced chart records their reactions.

The results shocked Yeltsin's Russian assistants. Each time cameras panned the stiff, unsmiling audience, the dials turned down -- as they also did when the President pledged to improve people's lives. "The analyzer taught us that Yeltsin should avoid promising anything," says Shumate. "The country just didn't believe him."

Science "won the day again," says Dresner. "We showed we'd been right from the start." From then on, the American team's influence grew -- and anticommunism became the central and repeated focus of the campaign and the candidate.

Having helped establish the campaign's major theme, the Americans then set out to modify it. The Americans used their focus-group coordinator, Alexei Levinson, to determine what exactly Russians most feared about the Communists. Long lines, scarce food and re-nationalization of property were frequently cited, but mostly people worried about civil war. "That allowed us to move beyond simple Red bashing," says Shumate. "That's why Yeltsin and his surrogates and our advertising all highlighted the possibility of unrest if Yeltsin lost. Many people felt some nostalgia for what the communists had done for Russia and no one liked the President -- but they liked the possibility of riots and class warfare even less." "'Stick with Yeltsin and at least you'll have calm' -- that was the line we wanted to convey," says Dresner. "So the drumbeat about unrest kept pounding right till the end of the runoff round, when the final TV spots were all about the Soviets' repressive rule."

In Video International, the advertising firm hired before the Americans arrived, Yeltsin had a first-rate team. The series of 15 one-minute spots produced for airing before the first-round balloting on June 16 was "at least as good as most anything you could get in the West," says Dresner. "Showing average Russians grudgingly coming to the realization that they had to support Yeltsin was the only way to move people who essentially wished the President was out of their lives."

The Americans were "vital," says Mikhail Margolev, who coordinated the Yeltsin account at Video International. Margolev had worked for five years in two American advertising agencies but freely acknowledges that his methods are still influenced by his earlier tenure as a propaganda specialist for the Soviet Communist Party and as an undercover KGB agent masquerading as a journalist for TASS, the Russian news agency. "The Americans helped teach us Western political-advertising techniques," says Margolev, "and most important, they caused our work to be accepted because they were the only ones really close to Tatiana. She was the key. The others in the campaign were like snakes, and snakes, you know, often eat each other. Putting his daughter in to get things done was Yeltsin's smartest move, and she was clearly leaning on the Americans."

The TV ad the Americans most wanted was the one the campaign made last, which had Yeltsin himself speaking. "We actually wanted him in every spot," says Gorton. "After all those great ads with average folks talking about their lives and then about Yeltsin, we wanted the President to come on and say that he understood what they were talking about, that he heard their complaints, that he felt their pain." But Yeltsin resisted -- and that caused the team to reach out to Bill Clinton's all-purpose political aide, Dick Morris.
 
Yeltsin Can Get Re-Elected, But Is He Able to Govern?

BORIS YELTSIN CAME BACK TWICE LAST WEEK. HE WRAPPED up his re-election triumph at the polls, then reappeared in his Kremlin office looking better than his supporters at home and abroad had feared he might. Amid rumors of more heart problems, he had canceled his public appearances a week before the second round of balloting. But there he was at his desk last Thursday, smiling and conferring with Prime Minister Victor Chernomyrdin on who will be in the next Cabinet. Yeltsin called in television crews to film a short victory statement, in which he told the Russian people he was proud of them for making the election "free and fair." He took a call from Bill Clinton, and they chatted for 25 minutes. Later a White House official said Yeltsin had confessed to campaign fatigue and was planning to take a vacation after his inauguration on Aug. 9.

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Having delivered his votes, Lebed looks less secure.

Yeltsin has managed to get re-elected, but can he govern? At 65, he is already well past the average life-span of Russian men, and since July 1995 he has had at least two episodes of myocardial ischemia, a shortage of blood supply to the heart. He also has a long pattern of rising to crises and then withdrawing into spells of depression and heavy drinking, though this time he promised voters he would not "go into hibernation." He cannot afford to. Reform of the Russian economy is still a work in progress, and his lieutenants are already circling one another in preparation for a power struggle. If he is not in charge, things could fall apart.

No one outside Yeltsin's inner council knows just what ailed him before last week's election. Officially he had a cold and had lost his voice. That is what his wife Naina said, explaining that he seldom got more than four hours of sleep a night during the campaign. In his made-for-television appearances just before last week's voting, he looked pale and stiff, but an old back injury often makes him move awkwardly. Doctors working for U.S. intelligence agencies tried some long-range diagnosis and concluded that Yeltsin probably was not suffering a recurrence of ischemia. More likely a touch of flu or another virus, they thought. But some Russian officials were told it was heart trouble.

While Yeltsin looked much improved at the end of the week, his illness touched off another round of speculation about who would succeed him. The Russian constitution provides that if the President dies in office, the Prime Minister temporarily takes over, pending a new election within three months. Prime Minister Chernomyrdin would be a leading candidate in such an election, as would Yeltsin's new security adviser, Alexander Lebed, and several others.

Lebed has already proved his vote-getting ability, winning almost 15% in the first round last June. But now that he is on the official stage in Moscow, he is turning into something of a loose cannon in the eyes of his government colleagues. In a series of public statements Lebed called Mormons "scum," told a visitor not to talk "like a Jew," and suggested the position of Vice President should be re-established, with himself in the role. As a strongman, "I look more like a Vice President," he told state television. "I need more powers," he said, even though he described himself as a "semi-democrat" at best. In an indirect attack on Chernomyrdin, who retains close links with the natural-gas industry he once headed, Lebed accused the "energy barons" of accumulating "overwhelming influence." Lebed was bold enough last week to send Yeltsin a list of names he thought should be selected for the next Cabinet, including his nominees for the Defense Ministry and the Federal Security Service, the domestic successor to the KGB.

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Prime Minister Victor Chernomyrdin may have very quietly played a strong hand. He slapped down Lebed, and Yeltsin reappointed him

Lebed was important to Yeltsin's re-election, so Chernomyrdin has loyally kept silent during most of these provocations. Now that Yeltsin has renominated him as Prime Minister, and now that Duma speaker Gennadi Seleznyov, a top Communist leader, has indicated he will not oppose him, Chernomyrdin is firing back. Yeltsin, he told reporters, had instructed him to put together a list of Cabinet members for the President's approval. "I have never delegated any of my powers to anyone, and I will not," he said. As to the vice presidency, says Chernomyrdin, that will have to wait at least four years: "I never heard of a country voting separately for a Vice President after the President has been elected." Nicholas Burns, spokesman of the U.S. State Department, says, "Right now Chernomyrdin is the second most powerful person in Russia." As Prime Minister, Chernomyrdin has been No. 2 all along. The positions Lebed has been given are purely advisory, and he could be dismissed from them at any time. The Yeltsin government, a Russian politician says, "might well start thinking in terms of cutting Lebed down to size." To dismiss him out of hand would be inviting a backlash from Lebed's nationalist backers, but he will probably be kept focused on the tough tasks of fighting organized crime and corruption and reforming the hard-pressed military. Says Chernomyrdin: "As for security and order, there will be plenty of work for everyone." Lebed's political role, which was to get Yeltsin re-elected, may be over.

Chernomyrdin rejects the spate of warnings, including some from Lebed, that Russia's economy is heading for a crisis later this year because of Yeltsin's campaign promises. "There will be no crisis next fall," he says. Maybe not. While Yeltsin made a lot of pork-barrel promises, no one knows how much he has actually paid out. International Monetary Fund officials say Russia was within its guidelines for June.

Even so, there are plenty of minicrises coming. Privatization is lagging; agriculture is unreformed; the government is not collecting the taxes it is owed; and industrial production is still falling. Lebed and Chernomyrdin are sparring, and the Duma is looking for ways to assert its authority. A strong, engaged President may be able to sort it all out, and Yeltsin's supporters hope he has the heart for it.

-- by Bruce W. Nelan. Reported by Dean Fischer/Washington and Yuri Zarakhovich/Moscow


COMMUNICATING IN CODE -- Clinton was called the Governor of California...

To "find some Americans," Braynin worked through Fred Lowell, a San Francisco lawyer with close ties to California's Republican Party. On Feb. 14, Lowell called Joe Shumate, a G.O.P. expert in political data analysis who had served as deputy chief of staff to California Governor Pete Wilson. Since Wilson's drive for the 1996 Republican presidential nomination had ended almost before it began, Lowell thought Shumate and George Gorton, Wilson's longtime top strategist, might be available to help Yeltsin....

After months being cooped up in the President Hotel wearing blue jeans, sneakers and PETE WILSON FOR PRESIDENT T shirts, the Americans headed for the building where Russia's central election commission would be announcing the results as they came in.


... Yeltsin the Governor of Texas -- the Americans sought Morris' help. They had earlier worked together to script Clinton's summit meeting with Yeltsin in mid-April. The main goal then was to have Clinton swallow hard and say nothing as Yeltsin lectured him about Russia's great-power prerogatives. "The idea was to have Yeltsin stand up to the West, just like the Communists insisted they would do if Zyughnov won," says a Clinton Administration official. "By having Yeltsin posture during that summit without Clinton's getting bent out of shape, Yeltsin portrayed himself as a leader to be reckoned with. That helped Yeltsin in Russia, and we were for Yeltsin."

The American team wanted Clinton to call Yeltsin to urge that he appear in his ads. The request reached Clinton -- that much is known -- but no one will say whether the call was made.


Dresner said he personally was involved in talks with the White House through President Bill Clinton's adviser Dick Morris. Those talks led Clinton to persuade Yeltsin that it was necessary to campaign "outside the Kremlin," he said.

-- Hollywood Spins Yeltsin Spin Doctors, by Andrei Zolotov Jr.


Yet it was not long before Yeltsin finally appeared on the tube. That was the good news -- the bad news was that the spot was awful. With all three of the American principals out of the country (the only time that happened during their employment), Video International dealt with Yeltsin on its own. Gorton had written several memos detailing how the shoot should proceed. Yeltsin, he said, should be filmed for at least four hours over several days, with the best 15 or 30 seconds culled for airing. "Even a former actor like Ronald Reagan would never attempt so important a task with less time and preparation devoted to the job," Gorton advised.

But it was not to be. "You'd have to say we were a bit reluctant to push the President," says Margolev. So at 6 one morning, after Yeltsin had slept barely three hours, Video International taped him for about 40 minutes. The finished commercial had Yeltsin speaking for more than two minutes. He looked exhausted. "It was ridiculous," says Shumate. "Here you have a guy whose health is a major issue, and his fitness to serve is called into question by his very own television spot."

Yeltsin also had problems with his regular TV coverage, even though he essentially controlled the state-run networks. As late as March, the news shows continued to criticize the President mercilessly, a favorite target being the war in Chechnya. "It was ludicrous to control the two major nationwide television stations and not have them bend to your will," says Dresner. In writing, the team adopted a more diplomatic tone. "Wherever an event is held," they wrote, "care should be taken to notify the state-run TV and radio stations to explain directly the event's significance and how we want it covered." Beginning in April, Russia's television became a virtual arm of the Yeltsin campaign, a crucial change that actually came fairly easily. With none of the more democratic candidates breaking through in the polls, most Russian journalists came to regard Yeltsin as the only effective bulwark against the Communists -- and thus the best guarantor of their own careers.

What really caused surprise was the public's reaction to the biased reporting. "We focus-grouped the issue several times," says Shumate. The results were contained in a June 7 wrap-up memo on TV coverage. Only 28% of respondents said the media were very biased in Yeltsin's favor -- a group that consisted mostly of Zyuganov's partisans. Twenty-nine percent said the media were "somewhat biased," but they broke in Yeltsin's favor. Amazingly, 27% said they thought the media were biased against Yeltsin.

Each day brought decisions on details that required careful thought and management. The Americans advised on staging crowds (and government employees were regularly instructed to attend Yeltsin's rallies). They conceived Russia's first-ever serious direct-mail effort (a letter from Yeltsin to Russian veterans thanking them for their service). They designed a campaign to use Yeltsin's wife Naina on the stump, where she was regularly well received. And they fought continuously all suggestions that Yeltsin debate Zyuganov. "He would have lost," Gorton says simply.

While the team dreaded the possibility of Yeltsin's being lured into debating Zyuganov, two greater threats loomed in early May. The Americans had been hoping to ignore Soskovets' instructions to signal a possible loss so that the elections could be canceled or delayed, but the issue was forced on May 5 when Yeltsin's closest aide, General Alexander Korzhakov, suggested a postponement.

Gorton had felt it coming and "for the first time ever," he says, "I wrote that an election was in the bag. No caveats, nothing about the trend looking good. I just flat out said you could take it to the bank Actually, at that point, we had Yeltsin up by about 10 points. It certainly wasn't in the bag, but we didn't want the balloting disrupted.
We might have fudged a bit if our numbers were close, but we didn't have to. Back then, we really thought we'd win comfortably."

Yeltsin scolded Korzhakov and said the election would be held on schedule. At the same time, he suggested that others besides Korzhakov believed a communist victory could provoke a civil war. That comment was widely interpreted as signaling that Yeltsin might indeed be planning to follow Korzhakov's advice later on. In fact, it was part of the strategy to make re-electing the President look like the best way for Russians to avoid chaos.

The only drawback of the team's encouraging analysis was that Yeltsin took it too much to heart. "When he said he was confident that he'd win the election outright in the first round by capturing 50% of the vote, it told us again that you can only lead politicians so far," says Dresner. "The only real threat to victory was a low turnout, and Yeltsin helped depress it by giving voters a reason to take the day off. If they thought Yeltsin's victory was a done deal, as he himself had indicated, why bother voting?"

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THE COUNT: An official at the election commission stands before a huge board showing incomplete returns on Wednesday night


The Americans were the ones close to Tatiana. She was the key, and she was obviously leaning on them.


The other crisis had been percolating for some time. The President's three democratic opponents had long talked of coalescing behind one or the other of them, and the speculation reached a fever pitch at the beginning of May. Had "they managed that," says Gorton, "it could really have killed us." A good deal of time was devoted to strategizing about how Yeltsin could stop the so-called "third force" from emerging. The two key third-force players were Grigori Yavlinsky, the leading democrat in the race, and the war hero Alexander Lebed. The team advised Yeltsin to woo his opponents publicly in order to boost their already inflated egos. "We thought that once they enjoyed the limelight, neither would be willing to drop out in favor of the other," Shumate explains. "Having them all in the race prevented the rise of a single, democratic alternative to Yeltsin."

KEEPING LEBED AS AN independent candidate was considered especially critical -- unless he dropped out of the first round in favor of Yeltsin, which seemed highly unlikely. ''All the data suggested that if Lebed withdrew to join a third-force coalition, his supporters would defect to Zyuganov," says Gorton. Thus on May 5, the Americans wrote that "Lebed would be the strongest third-force threat, and we believe paying a significant price for his support would be well worth it." The Americans didn't know that other Yeltsin aides were already reportedly aiding Lebed financially and logistically. "All we did advise," says Dresner, "is that if and when Lebed joined with Yeltsin, he not be given a government position until after the election was decided. Our polling showed that about 2% of voters would shy away from Yeltsin if that happened. On that point, we were ignored." Lebed won a startling 15% of the first-round vote, and in a dramatic move, Yeltsin almost immediately thereafter appointed him his national security adviser. According to an exit poll, 56% of those who voted for Lebed in the first round voted for Yeltsin in the runoff."

JUNE 16 WAS A HORRIFIC DAY. AS THE FIRST round vote approached, Yeltsin's support softened. It had been built up, virtually a point at a time, over three months. It was eroding now as Lebed gained. The Americans' private polls indicated only a 5-point lead for Yeltsin over Zyuganov. The two candidates who received the most votes in the first round would go to the runoff, and Yeltsin was almost certain to make the cut. Finishing second to Zyuganov would be a stunning blow to his momentum. A low turnout could produce exactly that result, and the first indications signaled a turnout below expectations.


The team members paced nervously in Room 1120. Gorton damned Yeltsin for ever predicting outright victory in the first round. Braynin wondered if the low turnout was owing to Russians' watching the Germany-Russia soccer match, and the four argued about whether Russia's defeat would cause voters to hit the vodka bottle rather than vote during the two hours remaining before the polls closed in the country's western region. "We peaked too soon," Dresner screamed. Only Shumate seemed cool. He had long before concluded that Zyuganov would never get more than 32% of the vote in the first round -- the combined total the Communists and their ideological soul mates had reached in the December 1995 Duma election. "This stinks," Dresner repeated every few minutes as he checked the turnout around the nation. "It won't fall below 65%, and our model shows we win with that," answered Shumate, who then left with his wife Joyce to attend a production of La Traviata at the Bolshoi Theatre.

A bit of relief came when a CNN correspondent reported that "the only thing voters we've spoken with like less than Yeltsin is the prospect of upheaval." Dresner howled. "It worked," he shouted. "The whole strategy worked. They're scared to death!" After months being cooped up in the President Hotel wearing blue jeans, sneakers and PETE WILSON FOR PRESIDENT T shirts, the Americans headed for the building where Russia's central election commission would be announcing the results as they came in.

COMMUNICATING IN CODE -- Clinton was called the Governor of California....


"The hell with security," Dresner said. "I want to see this." And there they sat near the back of the auditorium, six guys in suits with computer projections in their hands and a lap-top computer. The place was overrun with reporters, but Yeltsin's secret American advisers were never recognized.

The final tally for the first round showed that Yeltsin had edged out Zyuganov 35% to 32% (the Communists had indeed been held to the level they reached in December). Gorton began drafting a memo designed to guide Yeltsin's remarks, and Dresner began plotting 20 emergency focus groups to determine what voters were thinking. In less than an hour, another memo was written urging the quickest possible runoff date. "We've got to try and keep Zyuganov from capitalizing" on the first round's surprise tightness, Shumate said. "July 3 would be good," said Gorton. "That's about as soon as possible, and it's in the middle of the week so that people will be in town rather than at their dachas." "We need turnout," Dresner said over and over. "We've got to have turnout."

Why, with unlimited funds, expert advice and the media in his pocket, did Yeltsin win the first round by only three points? The Americans identify several points:

>> The continuing underlying hostility toward Yeltsin. "He never overcame the fact that most Russians can't stand him," says Dresner. "Anyone but a communist would probably have beaten him."

>> Zyuganov succeeded in softening his image despite numerous self-inflicted mistakes. "He said some really scary things to appease his hard-core backers and ensure that they voted," says Gorton. "If he had moved more astutely to broaden his base and if he'd aped Clinton and said, 'It's the economy, stupid; he might have pulled it off."

>> A slackening of the Yeltsin campaign's anticommunist message in the last 10 days. The Americans had advised "that you cannot hit hard enough, or long enough, the idea of the communists' bringing civil unrest if they win." In the first round, says Shumate, "the repetition lesson never took completely."

>> Yeltsin's attendance at rock concerts and other frivolous events. "We needed to reach young voters," Dresner says, "but our photo-op lectures were taken to an extreme. A disturbing dissonance was created. You shouldn't have the President out there dancing and prancing if your main message is that the country is going to dissolve into chaos if the other guy wins. Either you run a serious-business campaign seriously, or you don't."

>> Yeltsin's prediction of a first-round victory so huge that a runoff wouldn't be necessary. "Believe what you want," says Dresner, "but there is never any justification for hype like that unless you're out to depress the turnout, which is the exact opposite of what we were trying to do."

THE FIRST ROUND'S CLOSENESS guaranteed that the two-week runoff campaign would be conducted with care, regardless of the predictions that Yeltsin couldn't lose. The Americans' insistence on the anticommunist message was pursued with a vengeance. At the end, Yeltsin's television advertising was almost exclusively a nonstop diet of past Soviet horrors. Lebed's law-and-order theme dovetailed nicely with the pre-existing Yeltsin emphasis on preserving stability. Several bogus poll predictions were put forth to make the race seem close and thus increase turnout. Everything clicked except for Yeltsin's health, which naturally was barely covered by the pro-Yeltsin media. The press resumed its criticism of the President following his victory last Wednesday, but until then the media had been positively slavish about following the campaign's injunction: "Not a word about bad things."

The Americans claim no special knowledge about the President's illness or its severity and are unconcerned about the course of Yeltsin's second term and whoever will finally emerge as its key players. "We were brought in to help win," says Gorton, "and that's what we did. The Russians are prideful and say that people like us won't be necessary in the future because they've learned what to do. You hear that everywhere after the hired guns have done their work -- and it may be true. All I know is that for every guy who thinks he can go it alone, there will always be another guy who knows he can't."

Last week Russia took a historic step away from its totalitarian past. Democracy triumphed -- and along with it came the tools of modern campaigns, including the trickery and slickery Americans know so well. If those tools are not always admirable, the result they helped achieve in Russia surely is. But just as in America, the consultants can only take Yeltsin so far.
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Re: Boris Berezovsky (businessman), by Wikipedia

Postby admin » Sun Aug 05, 2018 9:18 pm

S.F. Grand Jury Indicts Russian Businessman in Alleged Ponzi Scheme
by Bill Wallace, Chronicle Staff Writer
San Francisco Gate
Published 4:00 am PDT, Saturday, September 4, 1999

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A federal grand jury in San Francisco has indicted a local Russian businessman for laundering criminal profits through the scandal-plagued Bank of New York.

Alexander Lushtak, 33, was named in a 23-count federal indictment charging him with participating in a scheme to defraud investors of more than $1.5 million and launder the funds through the Bank of New York.

In recent weeks, the financial institution, based in Manhattan, has been rocked by an investigation linking the bank to a multibillion-dollar operation headed by Russian immigrants who allegedly laundered criminal revenues for organized-crime figures and corrupt government officials in Russia.

The scandal has created a major international furor and caused relations between the United States and Russia to deteriorate. Top U.S. officials are concerned that some of the money being laundered through the Bank of New York may be from International Monetary Fund loans.


It is not known whether Lushtak's alleged money-laundering activity was related to the New York scheme. The indictment, filed Wednesday, was unsealed yesterday.

According to the indictment, which resulted from a joint investigation by the FBI and the Internal Revenue Service, Lushtak was the operator of a San Francisco financial firm called A&A Financial Management, which promised investors extremely high interest rates on invested capital.

Lushtak allegedly had his victims wire money to a corporate account for A&A Financial Management at the Bank of New York.

Instead of investing the money as promised, Lushtak allegedly used some of the money to make initial interest payments to early investors in order to convince them that the investment was sound.

According to the indictment, the rest of the money was stolen by Lushtak, who used it to build an expensive house in Tiburon and pay off massive gambling debts at Nevada casinos, among other things.

Last November, The Chronicle reported that FBI agents and investigators from the San Francisco district attorney's office and the state Department of Justice were investigating Lushtak and two other Russian immigrants -- Felix Braynin and Vladislav Chernoguz.

Victims, some of whom claim to have lost as much as $3 million, had told authorities that the three men were involved in a complicated series of transactions that involved securities firms in San Francisco, Nevada and the Grand Cayman Islands.

Braynin is a former professional soccer player who helped recruit U.S. campaign consultants for beleaguered Russian President Boris Yeltsin's 1996 re-election campaign.

ALL DURING THE LONG EVENING of Dec. 17, 1995, Felix Braynin sat transfixed before a television set in the living room of a government guest house in Moscow. He didn't like what he saw. Returns from the elections for the Duma, the lower of Russia's parliament, represented a devastating setback for reform-minded parties, including the one linked to Boris Yeltsin. The Communists and their allies were on their way to controlling the body, a disturbing development because in six months Russians would vote for President. Yeltsin's standing in the polls was abysmal, a reflection of his brutal misadventure in Chechnya; his increasing authoritarianism; and his economic reform program, which has brought about corruption and widespread suffering. Considering the country's deep dislike of Yeltsin and the Communists' surge, Braynin, a close friend of some of Yeltsin's top aides, thought that something radical had to be done.

A compact, powerfully built former professional hockey and soccer player in his native Belarus, Braynin, 48, had immigrated to San Francisco in 1979. With $200 in his pocket, he began painting houses. He is now a wealthy management consultant who advises Americans interested in investing in Russia.

Most of Yeltsin's confidants believed the President would be magically reelected despite the Duma catastrophe, but Braynin thought otherwise. The President, he reasoned, could lose without the same kind of professional assistance U.S. office seekers employ as a matter of course. Braynin began a series of confidential discussions with Yeltsin's aides, including one with First Deputy Prime Minister Oleg Soskovets, who at the time was in charge of the President's nascent re-election effort. Finally, in early February, Braynin was instructed to "find some Americans" but to proceed discreetly. "Secrecy was paramount," says Braynin. "Everyone realized that if the Communists knew about this before the election, they would attack Yeltsin as an American tool. We badly needed the team, but having them was a big risk."

To "find some Americans," Braynin worked through Fred Lowell, a San Francisco lawyer with close ties to California's Republican Party. On Feb. 14, Lowell called Joe Shumate, a G.O.P. expert in political data analysis who had served as deputy chief of staff to California Governor Pete Wilson. Since Wilson's drive for the 1996 Republican presidential nomination had ended almost before it began, Lowell thought Shumate and George Gorton, Wilson's longtime top strategist, might be available to help Yeltsin. They were -- and they immediately enlisted Richard Dresner, a New York-based consultant who had worked with them on many of Wilson's campaigns.

Dresner had another connection that would prove useful later on. In the late 1970s and early '80s, he had joined with Dick Morris to help Bill Clinton get elected Governor of Arkansas. As Clinton's current political guru, Morris became the middleman on those few occasions when the Americans sought the Administration's help in Yeltsin's re-election drive. So while Clinton was uninvolved with Yeltsin's recruitment of the American advisers, the Administration knew of their existence -- and although Dresner denies dealing with Morris, three other sources have told TIME that on at least two occasions the teams contacts with Morris were "helpful."


-- Yanks to the Rescue: The Secret Story of How American Advisers Helped Yeltsin Win, by Michael Kramer


Braynin, 50, emigrated to the United States from Belarus in the mid-1970s and began building and maintaining houses. He eventually worked his way into the upper echelons of Moscow's emerging foreign investment industry, winning powerful friends in Russian political circles, including Moscow Mayor Yuri Luzhkov.

He allegedly used his political and financial connections to convince investors that he could earn them large amounts of money.

At the time of the investigation, more than two dozen civil lawsuits had been filed in local courts accusing Braynin, Lushtak and Chernoguz of fraud, misappropriation of funds and breach of contract.

The men allegedly used three companies, Intercapital Trust Ltd., A&A Financial and BCL Capital Group, as fronts for their schemes to defraud.

Intercapital Trust Ltd. is a Nevada corporation with an office in San Francisco. A&A Financial Management is based in San Francisco. BCL Capital Group lists a mailbox address in the Grand Cayman Islands.


To preserve security, a contract was drawn between the International Industrial Bancorp Inc. of San Francisco (a company Braynin managed for its Moscow parent) and Dresner-Wickers (Dresner's consulting firm in Bedford Hills, New York).

-- Yanks to the Rescue: The Secret Story of How American Advisers Helped Yeltsin Win, by Michael Kramer


Lushtak is being held by federal authorities until a bail hearing scheduled for next week. If convicted, he could receive up to 20 years in federal prison for each money-laundering allegation and five years for each mail fraud charge.

Braynin and Chernoguz were not named in this week's indictment, and neither could be reached for comment yesterday.
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Re: Boris Berezovsky (businessman), by Wikipedia

Postby admin » Mon Aug 06, 2018 1:16 am

WikiLeaks cables: Moscow mayor presided over 'pyramid of corruption': Criminality, bribery and sleaze endemic in city administration, US ambassador reported to Washington
by Luke Harding
The Guardian
Wed 1 Dec 2010 16.30 EST First published on Wed 1 Dec 2010 16.30 EST

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Moscow mayor Yuri Luzhkov. WikiLeaks cables allege Moscow mayor Yuri Luzhkov oversaw a system in which almost everyone was involved in corruption or criminal behaviour. Photograph: Ilya Pitalev/EPA

The US ambassador to Russia claimed that Moscow's veteran mayor Yuri Luzhkov sat on top of a "pyramid of corruption" involving the Kremlin, Russia's police force, its security service, political parties and crime groups.

The 74-year-old has subsequently been sacked as mayor by President Dmitry Medvedev, after the Kremlin-controlled media broadcast allegations of corruption aimed at him and his billionaire wife, Yelena Baturina, who heads a construction company called Inteko
. The couple have vehemently denied the accusations as "total rubbish" designed to make Luzhkov "lose his balance".

In a leaked secret cable sent in February, the US ambassador John Beyrle gives a forensic account of Moscow's "murky" criminal world, alleging a shadowy connection between bureaucrats, gangsters and even prosecutors.

According to Beyrle corruption in Moscow was "pervasive". "Luzhkov is at the top of the pyramid," he claimed. He told the US state department: "Luzhkov oversees a system in which it appears that almost everyone at every level is involved in some form of corruption or criminal behaviour."

Russia's well-developed system of bribe-taking was ubiquitous, Beyrle said. In the absence of laws that worked, Luzhkov -– as well as other mayors and governors -– paid off "key insiders in the Kremlin". Officials had even been spotted entering the building carrying large suitcases, presumed to be "full of money".


The ambassador wrote his cable in response to speculation that Luzhkov, the capital's charismatic mayor since 1992, was about to lose his job. When Medvedev ignominiously dismissed him in September, the Russian president said he had lost confidence in Luzhkov.

Most analysts believe the firing had little to do with the allegations of corruption but was linked to a power struggle between Luzhkov and Russia's federal leadership, which Luzhkov eventually lost.

In a section called "Background on Moscow's criminal world", Beyrle asserted bluntly: "The Moscow city government's direct links to criminality have led some to call it 'dysfunctional', and to assert that the government operates more as a kleptocracy than a government".

"Criminal elements enjoy a 'krysha' [a term from the criminal/mafia world literally meaning 'roof' or protection] that runs through the police, the federal security service (FSB), ministry of internal affairs (MVD) and the prosecutor's office, as well as throughout the Moscow city government bureaucracy.


"Analysts identify a three-tiered structure in Moscow's criminal world. Luzhkov is at the top. The FSB, MVD and militia are at the second level. Finally ordinary criminals and corrupt inspectors are at the lowest level."

Under this system, all businesses in Moscow were forced to pay bribes to law enforcement structures, in a virtual parallel tax system: "Police and MVD collect money from small businesses while the FSB collects from big businesses." An FSB krysha was the most sought after, Beyrle said, with the FSB protecting Moscow's top organised crime gang.

This sleaze went all the way to the top of Russian power, Beyrle said. Bribes were distributed upwards under the "power vertical", Vladimir Putin's bureaucratic hierarchy. He quoted one source who said: "Everything depends on the Kremlin … Luzhkov, as well as many mayors and governors, pay off key insiders in the Kremlin."


The same source alleged that officials went into the Kremlin "with large suitcases and bodyguards", and speculated that the "suitcases are full of money". Another source disagreed. He pointed out it was simpler to pay bribes "via a secret account in Cyprus" -– an offshore route popular with rich Russians.

The ambassador offers the most detailed and apparently authoritative account so far of corruption in the Russian state and its security agencies. He cites Transparency International's 2009 survey which confirms Russia as the world's most corrupt major economy. The report estimates bribery costs Russia $300bn (£190bn) a year, about 18% of its gross domestic product.

Beyrle also reported allegations about Baturina, who heads the largest construction company in Moscow. After Luzhkov entered office, his wife became Russia's wealthiest woman, amassing a fortune put at $1.8bn. Since her husband's sacking she has spent most of her time abroad, with the couple's teenage daughters moving to London. Luzhkov's dubious friends and associates, the US alleged, included Vyacheslav Ivankov -– a recently murdered and notorious Russian mafia boss known as Yaponchik -– and other "reputedly corrupt" Duma deputies. "[Source removed] said that the Moscow government has links to many different criminal groups and it regularly takes cash bribes from businesses."

According to Beyrle, the same system of bribery worked in Russia's provinces: "The governors collect money based on bribes, almost resembling a tax system, throughout their regions." As in Moscow, businesses paid off the FSB, the interior ministry and the militia who "all have their distinctive money collection systems". (Moscow police heads also reportedly had a "secret war chest of money … used to solve problems that the Kremlin decides, such as rigging elections".)

Deputies in Russia's parliament generally had to buy their seats in government, Beyrle's cable suggested. "They need money to get to the top, but once they are there, their positions become quite lucrative money-making opportunities."


His allegations are likely to be most embarrassing for the Kremlin, after a high-profile campaign by Medvedev against corruption. So far it has shown few results.

Beyrle noted that Putin and Medvedev faced a tricky dilemma when deciding Luzhkov's fate. He was a "trusted deliverer of votes" for United Russia, Putin's pro-Kremlin party, Beyrle suggested. Against this, the Kremlin had to weigh up what the ambassador claimed to be "Luzhkov's connections to the criminal world".

Another cable sought to lift the lid on Luzhkov's business empire, much of it acquired using city funds to invest in "less than transparent" projects sealing agreements with former Soviet countries including Moldova, Uzbekistan, Georgia, Armenia and Azerbaijan.

The projects deliberately promoted Luzhkov's "nationalist foreign policy", it reported.
Luzhkov channelled cash to separatist pro-Russian movements in Ukraine and the Baltics. "This was 'at the behest of the Russian government, thereby giving the government of Russia plausible deniability when accused of funding certain political parties."

He also struck deals in the separatist regions of neighbouring countries, including South Ossetia and Abkhazia in Georgia, and Transnistria in Moldova. In Kosovo he used Moscow city funds to build housing for ethnic Serbian refugees, while in Bulgaria he bought beach resorts on the Black Sea for city hall staff.

"The Moscow city government has cultivated its influence in far-flung Russian regions as well as in foreign countries, ostensibly for the benefit of its citizens but to a greater extent for the city's well-connected business elites," the cable concluded.
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Re: Boris Berezovsky (businessman), by Wikipedia

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The President's News Conference With President Boris Yeltsin of Russia in Moscow
April 21, 1996
Public Papers of the Presidents
William J. Clinton
1996: Book I
Location:
Foreign Country
Russian Federation
The American Presidency Project

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Russia-U.S. Relations

President Yeltsin. Dear members of the press, ladies and gentlemen, our discussion with the President of the United States of America lasted sufficiently long, about 5 hours, and in substance became the continuation of the discussions that were started within the G-7, issues which we discussed within the 8, and today's meeting also to a great extent coincided. First of all, this was security; regional stability was also discussed in the bilats.

I think that today's discussion gave a rather large contribution to the successes of the G- 7 in Moscow in the security area—discussions of a whole series of issues on nuclear security and how to move ahead on START II, to strengthen the ABM Treaty of 1972. We now have rather good schedules on what Russia has to do, what the United States has to do by October of this year.

We've reached progress on European security as well. In May, we have an important meeting which should be dedicated to reviewing the CFE Treaty and forces in Europe. We agreed to work in this area and to concentrate more in the future on the wording of the treaty itself. You'll probably have questions at this.

Our two countries as cosponsors of the Middle East peace process we discussed in great detail. We discussed the situation in Israel and Lebanon. They were discussed also at the meeting of the 8 and now the ministers of foreign affairs of our countries are continuing talk. We're constantly in touch with them, and today we summarized a bit on some of the decisions reached.

Russia and the United States play a key role in the settlement in Bosnia. Our peacekeeping troop units are working very well. We have to reinvigorate this and aim it at nonmilitary aspects of the settlement, such as holding elections, providing for human rights, and rebuilding the destroyed areas.

I want to especially underscore here the fact that the elections do not interfere with the longterm cooperation between our two countries. I mean, our Presidential elections do not stand in the way. Our policies allow us to speak about various issues and we have a practice now and a tradition with Bill to hold normal, regular meetings whenever we meet, and whenever we make comments to each other and react to each other's statements. This is as any family would have it. There are sometimes comments made to each other—these issues at least have no ideological nature whatsoever. The United States and Russia are great powers. It's not just for us to get involved with big global issues, but we look out for our own interests.

In today's meeting, we have defined more carefully our policies, our tasks. We have established on the basis of equality—we've added the words "on the basis of equality" in our cooperation, which is in consistence with the interest of our two countries. And in the majority of cases, the lion's share of cases, others support both us and the United States in all of this. Our partners all have interest and see interest in the positive development of U.S.-Russia relations. They view our relationship as a factor which promotes international cooperation. This is very good.

Next week, I'm going to China. There, I plan to touch upon many of the issues which we discussed yesterday and today in Moscow. I'm counting on understanding from the Chinese.

I want to say that I'm very pleased with my discussion with the President of the United States, and I hope that Bill will also express his points of view, how he assesses our meeting today.

Thank you, Bill.

President Clinton. Thank you very much, President Yeltsin.

Ladies and gentlemen, just a few years ago the mere fact of a meeting between the American and Russian Presidents was news. But this is my 3rd trip to Moscow as President and my 10th meeting with President Yeltsin. So now the news is no longer that we are meeting, but instead what we're meeting about and what is being done for the benefit of our people.

After this meeting there is much to report. First, let me thank President Yeltsin for initiating and then hosting yesterday's nuclear summit. It is fitting that this summit was held in Moscow. For 3 years, the President and I have worked together in trying to make the world a safer place by reducing the nuclear threat that all our citizens face. Because of those efforts, Russian and American missiles are no longer pointed at each other's cities or citizens. We've both made deep cuts in our nuclear arsenals by putting START I into force. And we'll make even deeper cuts when the Duma ratifies START II.

We've worked with Ukraine, Belarus, and Kazakstan to dismantle nuclear weapons on their land. And yesterday, with other world leaders, we took important steps to make nuclear materials more secure so they don't fall into the wrong hands, to make the civilian use of nuclear power safer, and to strongly support the passage of a comprehensive test ban treaty this year.

The United States and Russia are also working together to promote peace in the world's most troubled regions. The President and I reviewed the situation in Bosnia, where our troops are serving side by side to help its people rebuild their land and their lives.

As cosponsors of the Middle East peace process, we discussed the terrible outbreak of violence in Lebanon and northern Israel. We agree on the need to secure a cease-fire to stop the violence, and as all of you know, our foreign ministers are both in the region as we speak. The best way to prevent violence from returning is to continue implementing the agreements between Israel and the Palestinian Authority and to secure a comprehensive peace in the region that includes Lebanon and Syria.

The political and the security partnership between our nations is strengthened by our growing commercial ties. We've worked hard to take down the old barriers to trade and to investment. Thanks to President Yeltsin's leadership, 60 percent of Russia's economy is now in the hands of its people, not the state. Inflation has been cut; democracy is taking hold. Since 1993, trade between the United States and Russia is up 65 percent. And the U.S. is now the largest foreign investor in this great nation. That's helping to create more good jobs and new opportunities in both our countries.

The President and I also discussed areas in which we have differences, as he mentioned. The flank issue of the Conventional Forces in Europe Treaty is one of them. But we are working hard to find a solution to that that is acceptable to all parties prior to the review conference in May, and I can say with confidence that we did move closer to that goal today.

We also made important progress in distinguishing between antiballistic missile systems that are limited by the ABM Treaty and theater missile defenses which are not. As a result, we'll send our negotiators back to Geneva next month with the aim of concluding an initial demarcation agreement this June.

From St. Petersburg to Moscow, these last 3 days have allowed me and our entire American delegation to see the richness of Russia's past, the achievements of its present, and the promise of its future. I want the Russian people to know how much the American people support Russia's commitment to democracy and to reform. We've learned from our history that building a thriving democracy is not easy or automatic, but Russia is making dramatic progress, as evidenced by the Duma elections last December and the coming Presidential elections this June.

This is a time of real possibility and opportunity to make our people more prosperous and more secure. The United States wants a strong, stable, and open Russia, to work with us as equal partners in seizing those opportunities and turning the challenges of a new era in the common solutions.

Thank you.

President Yeltsin. Thank you. Please, questions.

U.S. and Russian Elections

Q. A question to both Presidents: To what extent do the elections in Russia and the United States in November define the U.S.-Russian relation today? Thank you.

President Clinton. Who will go first? I'll go first. Well, I think all elections have consequences, and so the relationship will be defined obviously by these elections in important ways. The United States supports the direction that Russia has taken in building a vibrant and open democracy and in moving toward an economic reform which would put more of the economy in the hands of the people. And we now see, after some very difficult years, some real progress being made. And we look forward to being a good partner in that effort, as well as in making our countries more secure and ending the nuclear threats and in finding ways to work together to solve other problems around the world.

Two great nations like ours have a lot of common interests for the future, and I would hope no matter what happens we'll be able to pursue that. But I don't think we should be under any illusion that people run for office on platforms that they intend to implement and, therefore, all elections involve choices and have consequences. And so the people of Russia and the people of the United States will have to come to grips with that and make their own judgments, as great democracies do.

President Yeltsin. I, too, would like to answer since the question was to both Presidents. I have to say that with every meeting with the President of the United States, our relations improve. Not a single meeting has yet been empty. It always has given us not only to our countries, to our peoples, but all of us some sort of a positive.

Undoubtedly, also, yesterday's meeting of the 8 has given a lot, and today's meeting with the President, since the meetings touched upon a large variety of issues and problems, bilateral, international in nature where issues came together, coincided, et cetera.

But I just wanted to tell those who in the press and in the media have already tried to tally up the score and say, "Well, they especially really contrived this whole meeting in Moscow in order to help the President of Russia, President Yeltsin"—that's not so. This was planned a long time ago; way back in Halifax we had statements to this effect. And no questions which have to do with any kind of mutual obligations or tie-ins to the elections both here or in November in the United States—we did not have any tie-ins, any mutual obligations to each other, especially material or financial. We gave no assurances, any deals. We were here open, honest. So don't suspect here—suspect us in any way, a meeting such as the 8 or a meeting of two Presidents of two great nations.

Q. In Sharm al-Sheikh it was reported that you told President Yeltsin that you would support his reelection bid with positive U.S. policies, and that you asked him for help with clearing up some negative issues such as the poultry dispute. Was there a—did you talk about politics today? I mean, what were your political discussions? And how do you both think that a meeting like this helps you with voters?

President Clinton. First of all, let me clear up the report from Sharm al-Sheikh. What I said in Sharm al-Sheikh and what I believe is that the best politics is to do the right thing and advance the interest of our people. I did bring up that trade dispute, just as I have brought up a dozen or more trade disputes with other leaders all around the world. That's a big part of my job now, and I think I did the right thing.

Today at our luncheon, the President gave me a brief overview of what he thought—quite brief—was the present lay of the land with the elections coming up and again said that he was trying to do his job, that he wanted to do his job. And I told him I thought that producing concrete results for the people by doing your job was the best thing to do politically. So that's the—which is essentially what I also said when we talked at Sharm al-Sheikh.

Whether these things have any benefit or not, who knows? You know, most of our people are—most democracies all over the world are people preoccupied with problems at home, somewhat skeptical about foreign policy. But I can tell you this: Because of this nuclear summit the people of Russia and the people of the United States are going to have a more secure future. And that's what's important. And because of the meeting we had today, we're much closer to resolving a couple of very important issues that relate to our ability again to make the world a safer place: the CFE Treaty, the demarcation between antiballistic missile systems and theater missile defenses, and a number of other areas in which we need to cooperate for the safety and for the future of our people.

So it seems to me that that's what we ought to look at. Have we done the right thing or not? Are people going to be better off or not? Are they going to be safer or not? Is the future going to be brighter or not? That is how I think that we would both wish to be judged. And I think it's a great mistake to put too much of a political spin on this since typically, at least, foreign policy does not play that big a role in voting patterns. But it's very, very important to how people live and what kind of future we have.

President Yeltsin. I agree with President Clinton that the discussion was on the go constantly, during the breaks. And just as before, we said we have to have an equivalent partnership of the two countries. We have to support this relationship and help each other, all the Presidents, just like we support each other as countries, as people. And this is only natural. Now, as far as any specific issues having to do with campaigns and helping each other in campaigns in specifics, there was none.

Now, the second part of the question, Bill didn't touch upon the second part—I don't know, maybe he or I can maybe respond and say that the production of fowl which came from the United States was—there was one batch that was stopped and held up by our health service. After that we quickly got together. We set up a commission; let the Gore-Chernomyrdin commission figure it out, get into the details in the poultry question. And they did and they were convinced that, yes, there was some violations. Those violations were taken care of, and now trade once again has been reestablished and it's back to normal.

Conventional Forces in Europe Treaty

Q. You've already spoken about European security. Can you tell us a little more in detail specifically what the CFE Treaty—how it was touched upon, and the limitations on the flanks, please, if you would?

President Yeltsin. The question of European security has a lot of aspects, including NATO. So I don't think that we've got to lay all of these issues out to you at this very moment and how they relate to the central question, but more specifically and in detail we discussed the issues of the limitations on the flanks, since this really has to do with our direct interests on the Caucasus and in the northwest of our country near Kaliningrad.

But the way it turned out was that in Germany when we were moving our forces back to Russia, the closest way to go was to Kaliningrad. And so we saturated Kaliningrad with our troops and forces and equipment, and the whole oblast—really a lot of saturation— and went beyond the limits that were provided for in the CFE Treaty itself.

Also another situation here is the Caucasus because, as you know, what we have there, because of the situation in Chechnya—right now it's not bad, so what we're doing is implementing my plan on finding a settlement in the Chechnya problem. And things are going according to plan the way it's been approved. Nonetheless, there is a concentration of conventional forces, tanks and things; in some cases it varies from what the CFE Treaty may be calling for.

So President Clinton, at my request, very carefully reviewed with his advisers and specialists, and they went and decided that temporarily we would be given the opportunity to, within the overall framework of the overall total numbers, to do some movement of forces on the territory. Of course, the conference in May is going to finally decide that. But they expressed their opinion, and once again, this issue has been discussed. There was one question to us that we move from one site a part of our equipment. We didn't argue; we're going to move it. And in short, there really is no question for discussion remaining. We hope that around May 15, when the conference is held, this treaty is going to be adjusted somewhat and everything will be fine.

Chechnya

Q. President Yeltsin, you just mentioned that things were going according to plan in Chechnya. But there are other reports that hostilities there continue and human rights groups are complaining still about the behavior of Russian forces. I wonder, for President Clinton, what do you say to those who believe that the United States has not been firm enough, hasn't been critical enough, and that even now the criticism is muted specifically because the United States is anxious to see President Yeltsin reelected?

And for President Yeltsin, what would you say to those who believe that your call for a cease-fire was motivated largely by short-term political interests?

President Yeltsin. In your question you made a couple of errors right off the bat. First of all, you said that the United States is seeking the reelection of President Yeltsin. I have different data. Second, military actions in the Chechnya region are not going on. No military operations are being carried out from March 31. It's another matter—some bands are still running around. Out of 22 regions of Chechnya, 19 of them have signed agreements. In three, there are still—the bosses there are still the bands; they're still in charge. And in fact, it's true they are making life difficult for a lot of people.

But I repeat again, there are no military operations now underway. A state commission has been set up headed by Chernomyrdin; contact has been established with Dudayev through intermediaries. The intermediaries we have, Shaimiev, Orlov—we have people like that, King Hassan II, the King of Morocco, who have agreed to act in the role of intermediaries and to talk to Dudayev, to influence him from the point of view of negotiations only on one question that he is not in agreement with, in other words, that the Chechen Republic from our point of view—and this is an absolute—must be and will remain within Russia.

President Clinton. Let me make two brief points. First of all, I think the record will reflect that the United States has consistently supported a political solution to the Chechnya crisis and offered its support for that. And when President Yeltsin made his announcement on March 31st, we supported that.

You say that there are some who say we should have been more openly critical. I think it depends upon your first premise; do you believe that Chechnya is a part of Russia or not? I would remind you that we once had a Civil War in our country in which we lost on a percapita basis far more people than we lost in any of the wars of the 20th century over the proposition that Abraham Lincoln gave his life for, that no State had a right to withdraw from our Union.

And so the United States has taken the position that Chechnya is a part of Russia, but that in the end, a free country has to have a free association, so there would have to be something beyond the fighting, there would have to be a diplomatic solution. That's what we have done.

But we realize this is a very difficult problem. And we have—President Yeltsin said today in our private meeting he wanted a diplomatic solution. He specifically asked me to do a thing or two that he thought might be helpful to him in securing a peaceful resolution of this and an end to the fighting and a real reconciliation between the people of Chechnya and the rest of Russia. So I intend to do what he requested in that regard, and I will continue to try to advocate an end to the violence and do what the United States can to support a resolution of this.

Russia-U.S. Relations

Q. As a whole, how do you assess the progress in the field of security, including the issue of ABM? And how is this going to affect the future of equal partnership between Russia and the United States?

President Yeltsin. The word "equal" or "on an equivalent basis"—when we first signed the first treaty we weren't around, that word wasn't around. And it occurred later, because we saw some sort of discrimination practiced against Russia. And that's why the word "equal" or "on an equal basis in all respects"—that's what appeared.

Now, as far as security, we discussed in detail these issues. And in general, of course, for some time we're not going to be forcing the widening of NATO at our request. President Clinton promised this and somehow to influence his colleagues.

I believe that, in fact, it will be thus for a while. Then gradually maybe we ourselves will find, together with NATO, a relationship, maybe to come up with an agreement that, let's say, no country will be allowed to enter NATO, let's say, without Russia's agreement, and then maybe only through a consensus will be NATO changing. In other words, there is a variety of solutions for this problem, but we yet have to work on this.

We talked about it in detail, but, look, we're not going to be sitting here giving you everything exactly in detail what we did for 5 hours. We're going to have a 5-hour press conference then.

President Clinton. A brief comment on the two issues President Yeltsin mentioned. The United States has within it some people who have had questions about the ABM Treaty to which we're a signatory. I believe the United States should keep its treaty commitments. I think if we expect Russia to keep its treaty commitments, we have to keep ours. Not so long ago I vetoed a defense bill passed in the Congress because I thought it would have put us out of compliance with the ABM Treaty.

What we have to do now, because the ABM Treaty does not prohibit the development of theater missile defenses, is to define clearly what the lines between the two are, both regular velocity and high velocity theater missile defense. We made real progress here in doing that. And I'm convinced that if we do this in an open way that has a lot of integrity, that requires— where no one can question our commitment to the ABM Treaty, I think we'll all be just fine on this, and I think it will work out very well.

With regard to NATO, our differences are well-known, but I think it's also worth pointing out that as with other aspects of this relationship, they have been clear and open, there have been no surprises, and from my point of view there have been no changes.

I will say again: My goal is for a democratic, undivided Europe. The world has been caused a lot of trouble in the last 1,000 years repeatedly because of the divisions of Europe, number one. Number two, my goal is to see the United States and Russia over the long run develop a strong, equal partnership of two great democracies, freedom-loving countries that define their greatness in terms of their values and their example and the achievements of their people and not the domination of other nations. And I believe that we will find a way to work that out that's consistent with the position I've taken on NATO.

And so I feel—I believe that as this thing goes along we'll find answers to that. And so my position hasn't changed about NATO, but I do not in any way, shape, or form mean any threat to the security of the long-term legitimate interests of Russia there. And the more important thing is—by the way, practical thing—is the progress we have made here with the ABM theater missile defense issue. That's a very significant advance for both countries in resolving a real, as opposed to an imagined, security problem.

President Yeltsin. One minute, I didn't respond to part three of that second question on the ABM.

The thing is that, really, we did have at one time differences when the U.S. side began to develop its own system beyond the ABM. And we expressed our surprise at this. And when Bill Clinton became President we agreed solidly that we are going to abide by the ABM Treaty. And for all this time, all the times we've met, we've had never any doubts, and we've had never any claims or questions to each other or any doubts that this treaty is in any way going to be changed or modified or changes introduced or anything like that.

It's another matter now that, as Bill Clinton said, that we've got to, simply from the technical point of view, have that demarcation between strategic and theater nuclear systems. But that's being carried out now by our specialists and experts, U.S. experts. And that will be fulfilled to not the detriment of either the United States or the Russian Federation.

Russian Elections

Q. The two Presidents: Both of you today have talked very optimistically and hopefully about U.S. and Russian relations. But again to return to the elections, if the Communists were to win in this election, do you believe that this close relationship can continue? And particularly to Mr. Yeltsin, do you believe your Communist opponents are in fact a different kind of Communists than the ones whom you helped put out of power and the party that you once walked out of?

President Yeltsin. I have nothing to think here on this score. There's nothing to think about because I am sure that I will be victorious.

President Clinton. Well, my answer's irrelevant. [Laughter]

Should we take one more? Do you want to take one more?

President Yeltsin. One more question. One more question each—you and I, each side, one more question.

Nuclear Testing

Q. Boris Nikolayevich, a question to you: Have you discussed the issue of banning nuclear testing, and is there any difference of opinion on nuclear testing?

President Yeltsin. Yes, this issue was discussed yesterday at the meeting of the 8, since the topic was, after all, nuclear security, and everything there, practically speaking, starts with nuclear materials and testing. So when we talked about testing, banning testing yesterday, I will say that we had a very, very loyal discussion, a pleasant talk. All, to the very last one, agreed that this year we've got to sign the treaty on banning and testing in any size of tests forever and forever.

But not all nuclear states participated at yesterday's meeting of the 8. Now, with the others we're going to have to do a little work, especially with China. Well, that's why we, the leaders of the states, and that's where members of the 8 which decide these big political issues and other issues in order to somehow move forward and make progress on these big issues and to reach agreements and to prepare accords with other states. And we're going to be attempting to do that. I have got the conviction that we are going to find an agreement and, after all, I think we will be able to sign this year.

President Clinton. I'll just make a brief supplemental remark there. We have all agreed to go with the so-called Australian language, which is a strict zero-yield comprehensive test ban treaty. That is the only kind of treaty that can give the people of the world the certainty that they really are seeing the end of the nuclear age of the big weapons.

Some other countries want to kind of leave a big crack in the door for so-called peaceful tests or experimentation. And we all believe that we just have to try to persuade them to our way of thinking. I think the biggest and most important issue now is trying to persuade the Chinese to adopt the position that we have adopted. And I suggested on behalf of the 8 that we ask President Yeltsin to take this issue up on his trip to China. He agreed to do that, and the rest of us agreed to do our best as well to support that and try to persuade the Chinese that this is the right course for the future. And I have every hope that we can succeed.

Assistance to Russia

Q. Mr. President, the U.S. assistance to Russia after communism fell has been a fraction of what the Marshall plan did for Europe to help rebuild Europe after World War II. With many Russians questioning whether capitalism and democracy have really made their lives better, do you feel that the West has missed a historic chance to help Russia? And if you're reelected next year and there's a new Congress, do you foresee anything more ambitious in the future?

President Clinton. Well, first of all, the short answer to your question is no, I don't think that the West has missed an historic chance. The present Congress I think has underestimated the impact that a relatively small amount of investment assistance in other countries can have, not just in Russia but in other places in the world. And so I think that's a mistake. I think not paying our U.N. dues is a mistake, not investing in the International Development Association is a mistake.

But let me ask you—you compared this to the Marshall plan. There are some things that are quite different. For one thing, we are now the largest—the United States is the largest private investor in Russia, and the flow of private investment is much broader and quicker than it was at the end of World War II. For another thing, the United States has strongly supported the multi-billion-dollar aid package coming out of the international financial institutions, which were not available to do those things, again, as a part of the Marshall plan on anything like this scale. Thirdly, even though our assistance to Russia has dropped in the last couple of years, the Nunn-Lugar funds are still helping the denuclearization movement, and funds that I asked the Congress to adopt in the '93-94 timeframe, those funds have by no means all been used up. That is, they're still awaiting specific projects. So money has been appropriated for investment here that can still be invested here as the projects come on line.

So our commitment to the economic revitalization of Russia is very strong. And I would point out that I believe Russia has privatized a higher percentage of its economy than any of the other countries of the former Soviet Union. And the economic problems that Russia has endured began before the Soviet Union disappeared. And we see the economy coming back now, and I think that things are going in the right direction.

I do believe that the United States and the rest of the advanced economies should continue their commitment to investment and to support democracy and economic reform. I don't think we should let up. But I think it's a mistake to say that a historic opportunity has been missed, because a great deal has been done.

Thank you very much.

NOTE: The President's 121st news conference began at 2:42 p.m. in the Executive Office Building at the Kremlin. President Yeltsin spoke in Russian, and his remarks were translated by an interpreter. In his remarks, President Yeltsin referred to Prime Minister Viktor Chernomyrdin of Russia, President Jawhar Dudayev of Chechnya, and President Mintimer Shaimiev of Tatarstan.
Citation: William J. Clinton: "The President's News Conference With President Boris Yeltsin of Russia in Moscow," April 21, 1996. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=52702.
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Re: Boris Berezovsky (businessman), by Wikipedia

Postby admin » Mon Aug 06, 2018 9:26 pm

U.S. Entrepreneur Is Gunned Down in Moscow
by The Associated Press
November 4, 1996

NOTICE: THIS WORK MAY BE PROTECTED BY COPYRIGHT

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An American businessman involved in a long dispute over control of one of Moscow's best-known hotels was shot to death today by an unknown assailant with a machine gun.

The businessman, Paul E. Tatum, 39, a native of Edmond, Okla., and a former fund-raiser for the Oklahoma Republican Party,
was killed near the entrance to the Kievsky metro station in downtown Moscow, a police spokesman said. The station is located near the Radisson-Slavyanskaya hotel, where Mr. Tatum had his office.

The police spokesman, who spoke on the condition of anonymity, said that the shooting had occurred at 5:10 P.M. and that top-level police officials were investigating the case.

Russian businessmen have frequently been killed since the collapse of Communism, although the slaying of foreign businessmen has been relatively rare. Many of the murders are contract killings and remain unsolved.

Mr. Tatum, a founding partner of the riverfront hotel, was involved in a long power struggle with the management of the joint venture that administers the property. Courts in Moscow and the United States have been looking into the dispute.

The struggle came to a head in 1994, when Mr. Tatum tried to oust the joint venture's director, reportedly going as far as to cut off his phone lines. In response, guards were posted at the hotel entrance to keep Mr. Tatum out.

The dispute is said to involve the Moscow city government and the Radisson Hotel Company, the Minnesota-based company that is Mr. Tatum's American partner.

Matt Seward, former chairman of the Oklahoma Republican Party, said his longtime friend refused to be intimidated.
Mr. Tatum told him a few weeks ago that he expected a decision in the dispute soon. ''And he was 95 percent sure he had won,'' Mr. Seward said.

Mr. Seward described Mr. Tatum as the ''quintessential entrepreneur'' who became fascinated by the business potential in Russia in the decade before the break-up of the Soviet Union.

''Paul's a risk-taker -- he wouldn't have built a hotel in Moscow if he wasn't a risk-taker,'' Mr. Seward said.

The Radisson-Slavyanskaya houses a string of shops and Western offices, including those of large broadcast media companies, and serves as the home in Moscow for dozens of expatriates. President Clinton has been staying at the hotel during his trips to Moscow.

Mr. Tatum had vowed to continue doing business in Russia despite the hotel struggle.

''This is entrepreneurs' heaven,'' he said in a 1994 interview. ''There's no telling how quickly this country could develop and how much it could look like the United States in a very short period of time.''

Officials at the hotel refused to answer questions today, and phone calls to hotel management in the United States went unanswered.

The American Embassy in Moscow had no immediate comment, apart from a terse statement saying: ''We deplore the murder of any U.S. citizen.''
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Re: Boris Berezovsky (businessman), by Wikipedia

Postby admin » Mon Aug 06, 2018 9:44 pm

9/11 Synthetic Terror Made in USA [Excerpt]
by Webster Griffin Tarpley

RUSSIANS EXPOSE US-UK TERROR ROLE AFTER SCHOOL MASSACRE

In early September, 2004, terrorists attacked a school in Beslan, North Ossetia, in the Russian Federation. Before this hostage crisis was over, more than 300 people, over half of them children, were killed. On Monday. September 6, Russian President Vladimir Putin made remarks to the western press which exposed the key role of the US and British governments in backing Chechen terrorism. Whatever Putin's previous role in events regarding Chechnya, his post-Beslan political posture tended to undercut the legitimacy of the supposed Anglo-American "war on terror," and pointed up the hypocrisy of the Bush regime's pledge that it would make no distinction between the terrorists and those who harbor them -- since Washington and London were currently harboring Chechens implicated in terrorism. All in all, Putin's response to the Chechen events, on the eve of the third anniversary of 9/11, brought the collapse of the official 9/11 myth measurably closer. The hypocritical terror demagogy of Bush and Blair was now undercut by the head of state of another permanent member of the UN Security Council.

On Monday September 6, Putin spoke for three and one half hours with a group of some 30 western correspondents and Russia experts at his dacha near Novo Ogarevo outside Moscow. Most US press ignored these remarks. Putin, a KGB veteran who knew whereof he spoke, told the gathering that the school massacre showed that "certain western political circles would like to weaken Russia, just as the Romans wanted to destroy Carthage." He thus suggested that the US and UK, not content with having bested Russia in the Cold War, now wanted to proceed to the dismemberment and total destruction of Russia -- a Carthaginian peace like the one the Romans finally imposed at the end of the Punic Wars in 146 BC, when they poured salt into the earth at Carthage so nothing would ever grow there again. (Le Monde, September 8, 2004) There was no link between Russian policy in Chechnya and the hostage-taking in Beslan, said Putin, meaning that the terrorists were using the Chechen situation as a pretext to attack Russia. According to a paraphrase in Le Monde: "The aim of this international terrorism, supported more or less openly by foreign states, whose names the Russian president does not want to name, is to weaken Russia from the inside, by criminalizing its economy, by provoking its disintegration through propagating separatism in the Caucasus and the transformation of the region into a military staging ground (place d'armes) for actions directed against the Russian Federation."

"Mr. Putin," continued Le Monde, "restated the accusation he had launched in a veiled form against western countries which appear to him to use double-talk. On the one side, their leaders assure the Russian President of their solidarity in the fight against terrorism. On the other hand, the intelligence services and the military -- 'who have not abandoned their Cold War prejudices,' in Putin's words -- maintain contacts with those the international press calls the 'rebels.' 'Why are those who emulate Bin Laden called terrorists and the people who kill children, rebels? Where is the logic?' asked Vladimir Putin, and then gave the answer: 'Because certain political circles in the West want to weaken Russia just like the Romans wanted to destroy Carthage.' 'But, continued Putin, "we will not allow this scenario to come to pass."' Le Monde went on: "This is, according to [Putin] a bad calculation, because Russia is a factor of stability. By weakening it, the Cold War nostalgics are clearly acting against the interests of their own country." In Putin's words: "We are the sincere champions of this cooperation [against terrorism], we are open and loyal partners. But if foreign services have contacts with the 'rebels,' they cannot be treated as reliable allies, as Russia is for them." (Daniel Vernet, "M. Poutine accuse et s'explique sur sa 'guerre totale' au terrorisme," Le Monde, September 8, 2004)

In Guardian correspondent Jonathan Steele's account of the meeting with Putin, the Russian President gave this response to the US and UK on the question of negotiating with the Chechen guerrillas of Asian Maskhadov: "Why don't you meet Osama bin Laden, invite him to Brussels or to the White House and engage in talks, ask him what he wants and give it to him so he leaves you in peace? You find it possible to set some limitations in your dealings with these bastards, so why should we talk to people who are child-killers?" (London Guardian, September 7, 2004)

On Saturday, September 4, Putin had delivered a national television address to the Russian people on the Beslan tragedy, which had left more than 300 dead, over half of them children. The main thrust was that terrorism constitutes international proxy warfare against Russia. Among other things Putin said: "In general, we need to admit that we did not fully understand the complexity and the dangers of the processes at work in our own country and in the world. In any case, we proved unable to react adequately. We showed ourselves to be weak, and the weak get beaten." "Some people would like to tear from us a tasty morsel. Others are helping them. They are helping, reasoning that Russia still remains one of the world's major nuclear powers, and as such still represents a threat to them. And so they reason that this threat should be removed. Terrorism, of course, is just an instrument to achieve these gains." "What we are dealing with, are not isolated acts intended to frighten us, not isolated terrorist attacks. What we are facing is direct intervention of international terror directed against Russia. This is a total, cruel and full- scale war that again and again is taking the lives of our fellow citizens." (Kremlin.ru, September 6, 2004; EIR, September 7, 2004)

Around the time of 9/11, Putin had pointed to open recruitment of Chechen terrorists going on in London, telling a German interviewer: "In London, there is a recruitment station for people wanting to join combat in Chechnya. Today -- not officially, but effectively in the open -- they are talking there about recruiting volunteers to go to Afghanistan." (Focus -- German weekly newsmagazine, September 2001) In addition, it is generally known in well-informed European circles that the leaders of the Chechen rebels were trained by the CIA, and that the Chechens were backed by US- sponsored anti-Russian fighters from Afghanistan. In the summer of 2004, US-UK backed Chechens destroyed two Russian airliners and attacked a Moscow subway station, in addition to the school atrocity.

Some aspects of Putin's thinking were further explained by a press interview given by Aslambek Aslakhanov, the Chechen politician who was one of Putin's official advisors. A dispatch from RIA Novosti reported Aslakhanov's comments as follows: "The terrorists who seized the school in Beslan, North Ossetia, took their orders from abroad. 'They were talking with people not from Russia, but from abroad. They were being directed,' said Aslambek Aslakhanov, advisor to the President of the Russian Federation. 'It is the desire of our "friends" -- in quotation marks -- who have probably for more than a decade been carrying out enormous, titanic work, aimed at dismembering Russia. These people have worked very hard, and the fact that the financing comes from there and that they are the puppet masters, is also clear." Aslakhanov, who was named by the terrorists as one of the people they were going to hold talks with, also told RIA Novosti that the bid for such "talks" was completely phony. He said that the hostage-takers were not Chechens. When he talked to them, by phone, in Chechen, they demanded that he talk Russian, and the ones he spoke with had the accents of other North Caucasus ethnic groups. (RIA Novosti, September 6, 2004; EIR, September 7, 2004)

On September 7, RIA Novosti reported on the demand of the Russian Foreign Ministry that two leading Chechen figures be extradited from London and Washington to stand trial in Russia. A statement from the Russia Foreign Ministry's Department of Information and Press indicated that Russia would put the United States and Britain on the spot about extraditing two top Chechen separatist officials who had been given asylum in Washington and London, respectively. They were Akhmad Zakayev, known as a "special representative" of Asian Maskhadov (currently enjoying asylum in London), and Ilyas Akhmadov, the "Foreign Minister" of the unrecognized "Chechen Republic- Ichkeria" (then residing in the USA). (RIA Novosti, September 7, 2004; EIR, September 8, 2004)

"SCHOOL SEIZURE WAS PLANNED IN WASHINGTON AND LONDON"

This was the headline of an even more explicit unsigned commentary by the Russian news agency KMNews.ru. This analysis blamed the Beslan school massacre squarely on the U.S. and British intelligence agencies. The point of departure here was that Shamil Basayev, the brutal Chechen field commander, had been linked to the attack (something that Putin advisor Aslambek Aslakhanov had said was known to the Russian FSB, successor of the KGB). The article highlighted the recent rapprochement of London and Washington with key representatives of Asian Maskhadov: Britain's giving asylum to Akhmad Zakayev (December 2003) and the USA's welcoming Ilyas Akhmadov (August 2004). Basayev, viewed in European circles as a straight-out CIA agent, openly claimed responsibility for the school massacre almost two weeks after the fact.

KMNews: CHECHEN TERROR BOSS ON US STATE DEPARTMENT PAYROLL

The Russian news agency KMNews wrote: "In early August ... 'Minister of Foreign Affairs of the Chechen Republic-lchkeria' Ilyas Akhmadov received political asylum in the USA. And for his 'outstanding services,' Akhmadov received a Reagan-Fascell grant," including a monthly stipend, medical insurance, and a well-equipped office with all necessary support services, including the possibility of meetings with political circles and leading U.S. media. "What about our partners in the 'anti-terrorist coalition,' who provided asylum, offices and money to Maskhadov's representatives?" asked the Russian press agency. Citing the official expressions of sympathy and offers of help from President Bush, National Security Adviser Condoleezza Rice, and State Department spokesman Richard Boucher, KMNews warned: "But let's not shed tears of gratitude just yet. First we should ask: were 'Special Representative of the President of CRI' Zakayev or 'Minister of Foreign Affairs of the CRI' Akhmadov, located in Great Britain and the USA, aware of the terrorist acts that were in preparation? Beyond a doubt ... and let's also find out, how Akhmadov is spending the money provided by the Reagan-Fascell Foundation. We note: this Foundation is financed by the U.S. Congress through the budget of the State Department! "Thus, the conclusion is obvious. Willingly or not, Downing Street and the White House provoked the guerrillas to these latest attacks. Willingly or not, Great Britain and the USA have nurtured the separatists with material, information and diplomatic resources. Willingly or not, the policy of London and Washington fostered the current terrorist acts." "As the ancients said, cui bono? Perhaps we are too hasty with such sweeping accusations against our 'friends' and 'partners'? Is there a motive for the Anglo-American 'anti-terrorist coalition' to fan the fires of terror in the North Caucasus?" "Alas, there is a motive. It is no secret, that the West is vitally interested in maintaining instability in the Caucasus. That makes it easier to pump out the fossil fuel extracted in the Caspian region, and it makes it easier to control Georgia and Azerbaijan, and to exert influence on Armenia. Finally, it makes it easier to drive Russia out of the Caspian and the Caucasus. Divide et impera! -- the leaders of the Roman Empire already introduced this simple formula for subjugation."

KMNews: TERROR SUPPORTERS "ON THE BANKS OF THE THAMES AND THE POTOMAC"

KMNews continued: "Alas, it must be recognized that the co-authors of the current tragic events are to be found not in the Arab countries of the Middle East, but on the banks of the Thames and the Potomac. Will the leadership of Russia be able to make decisions, in this situation?" "Yes -- if there is the political will. The first thing is that black must be called black, and white, white. It is time to admit that no "antiterrorist coalition" exists, that the West is pursuing its egotistical interests (spreading its political influence, seizing fossil fuels deposits, etc.). Our own coalition needs to be formed, with nations that are genuinely interested in eliminating terror in the North Caucasus. Finally, it is time to change the entire tactics and strategy of counterterrorism measures. It is obvious that catching female suicide bombers on the streets of Moscow or carrying out operations to free children who are taken hostage, are, so to speak, the 'last line of defense.' It is time to learn to make preemptive strikes against the enemy, and it's time to carry combat onto the territory of the enemy. Otherwise, we shall be defeated." (Source: KMNews.ru, September 7, 2004; EIR, September 8, 2004)

Izvestia stressed the probable ethnic composition of the terrorist death squad, and its likely role in exacerbating tensions in the ethnic labyrinth of the Caucasus. Izvestia found the targeting of North Ossetia in the Beslan incident "not accidental," pointing to the danger of "irreversible consequences" for interethnic relations between Ossetians, Ingushis and Chechens. "Russia is now facing multi-vectored threats along the entire Caucasus," the paper wrote. (Izvestia, September 3, 2004)

In the wake of Putin's speech, prominent Russian commentators discussed the recent terror campaign against Russia in terms of a possible "casus belli" for a new East-West conflict. Several commentaries reaffirmed Putin's key statement that international terrorism has no independent existence, but functions only as "an instrument," wielded by powerful international circles committed (in part) to the early destruction of Russia as a nuclear-armed power. A commentary in the widely read Russian business news service RosBusinessConsult (RBC) was entitled "The West is unleashing Jihads against Russia." In language reminiscent of the Cold War, RBC charged that the recent wave of terror attacks against Russia, beginning with the sabotage of two airplanes and a terror bombing at a Moscow subway station, and culminating so far in the Beslan attack, was immediately preceded by what RBC calls "an ultimatum from the West," for Russia to turn over the Caucasus region to "Anglo-Saxon control."

ANGLO-AMERICAN TERROR ULTIMATUM TO RUSSIA FROM THE LONDON ECONOMIST

"Some days prior to the onset of the series of acts of terrorism in Russia, which has cost hundreds of lives, a number of extremely influential Western mass-media, expressing establishment positions, issued a personal warning to Vladimir Putin, that Russia should get out of the Caucasus, or else his political career would come to an end. Therefore, when the President on Saturday spoke of a declaration of war having been made against Russia, this was not just a matter of so-called 'international terrorism' ... One week prior to the first acts of terrorism, the authoritative British magazine, the Economist, which expresses the positions of Great Britain's establishment, formulated the Western position concerning the Caucasus, and above all the policy of the Anglo- Saxon elite, in a very precise manner," RBC wrote.

CZECH NGO BLOWS UP RUSSIAN TANK; BRITISH EXPERTS TRAIN CHECHEN GANGS

The RBC commentary went on to cite the Economist of August 19, 2004, which contained what RBC characterized as the virtual ultimatum to Russia. RBC noted that "the carrying out of such a series of coordinated, highly professional terrorist attacks, would be impossible without the help of qualified 'specialists'." RBC noted that at the end of August one such "specialist," working for an NGO based in the Czech republic, was arrested for blowing up a Russian armed personnel carrier. Also, British "experts" were found instructing Chechen gangs in how to lay mines. "It cannot be excluded, that also in Beslan, the logistics of the operation were provided by just such 'specialists'," noted RBC.

The RBC editorial concluded: "Apparently, by having recourse to large-scale terrorist actions, the forces behind that terrorism have now acted directly to force a 'change' in the political situation in the Caucasus, propagating interethnic wars into Russia. "The only way to resist this would be for Moscow to make it known that we are ready to fight a new war, according to new rules and new methods -- not with mythical 'international terrorists', who do not and never existed, but with the controllers of the 'insurgents and freedom fighters'; a war against the geopolitical puppet-masters who are ready to destroy thousands of Russians for the sake of achieving their new division of the world." (RBC, September 7, 2004; EIR, September 1 2004)

In a related comment, the Chairman of the Duma Foreign Affairs Committee, Dmitri Rogozin, declared in an interview on Sunday September 5: "I think [those behind the terrorism] are those who would like to see Russia totally discredited as a power ... I think that the aim is to destabilize the political situation in the country and plunge Russia into total chaos." (Ekho Moskvy, September 6, 2004) Western press organs responded to the school massacre with a campaign to blame, not the terrorists, but the Putin regime and Russian society. This disingenuous policy further stoked Russian resentment. On September 6, Strana.ru headlined, "Western Press: The Tragedy Is Russia's Own Fault," commenting that "unlike official politicians, journalists do not want to admit that the bombings and hostage-takings in our country are acts of international terrorism." (EIR, September 7, 2004) Another example this Putin-bashing was the article by Masha Lippman in the Washington Post of September 9, 2004. This was quickly followed by a campaign against Putin for being undemocratic, including, with indescribable hypocrisy, the complaint that Putin had not purged his intelligence officers after the school massacre -- this from the US, where no one had been held accountable for 9/11.

A basic reason for the US-UK surrogate warfare against Russia was the great Anglo-Saxon fear of a continental bloc of the type which emerged during the run-up to Bush's Iraq aggression. The centerpiece of the continental bloc would be the German-Russian relationship. Washington and London feared that Russia would soon agree to accept euros in payment for its oil deliveries. This would not just prevent the Anglo-Americans from further skimming off oil transactions between Russia and Europe. It would represent the beginning of the end of the dollar as the reserve currency of the world, a role which the battered greenback, weakened by Bush's $500 billion yearly trade deficit and Bush's $750 billion budget deficit, can no longer fulfill. If Russia were to adopt the euro, it was expected that the Eurasian giant would quickly be followed by Iran, Indonesia, Venezuela, and other counties. This would put an end to the ability of the US to run astronomical foreign trade deficits, and would place the question of a US return to a production-based economy on the agenda.

The 9/11 myth was still a menace to mankind.
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Re: Boris Berezovsky (businessman), by Wikipedia

Postby admin » Mon Aug 06, 2018 10:14 pm

Boris Berezovsky’s Art Collection Said to Contain Substantial Number of Fakes
by Marion Maneker
Art Market Monitor
June 11, 2014

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Reports say that 19 of the paintings in deceased Russian Oligarch Boris Berezovsky’s collection are fakes. The discovery was made by Berezovsky’s daughter as she seeks to unravel the tangled business affairs that seem to have led to his death.

The fakes are said to be part of a collection that was once valued around £50m (though these valuations in the press are notorious for their slim basis in fact):

Administrators of the billionaire’s estate are considering calling in police after 19 paintings were revealed to be forgeries. They are believed to include all the works that once hung in Wentworth Park, his former £25m Surrey mansion.

The fakes include copies of two works by the Russian landscape painters Alexei Savrasov and Alexandre Altmann which were previously valued at £550,000 and £75,000.
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Re: Boris Berezovsky (businessman), by Wikipedia

Postby admin » Mon Aug 06, 2018 10:30 pm

The fixer: how Berezovsky pulls the strings in Russia
Russia: special report
by Amelia Gentleman @ameliagentleman
The Guardian
Sun 16 Apr 2000 20.52 EDT First published on Sun 16 Apr 2000 20.52 EDT

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The name of Boris Berezovsky, Russia's most notorious oligarch, arouses, at best, profound suspicion in Russia. Many view the millionaire businessman - who became rich with the collapse of communism - with a loathing inspired by his influential backstage role in Russian politics.

Although he lost a significant part of his empire last year when he was distanced from the state airline Aeroflot, Berezovsky currently holds crucial stakes in two of Russia's main television channels and in several of the leading daily newspapers, as well as powerful chunks in the country's car-trade, oil and aluminium industries.

Since the mid-90s he has openly been using his business clout to exert influence over leaders in the Kremlin. Extremely charming and clever, he became a powerful figure in Boris Yeltsin's shadowy inner circle, "the family", a close associate of key presidential advisers and of Yeltsin's daughter and image maker, Tatyana Dyachenko.

Berezovsky makes no attempt to hide the role he played in ensuring Yeltsin's re-election in the 1996 presidential vote, when he and a group of other influential businessmen used their powers to pull the president back from certain defeat in the polls.

Russia's current president, Vladimir Putin, also owes a debt of gratitude to the tycoon. Putin's presidential victory was effectively secured during campaigning for last December's parliamentary elections, when a ferocious slur campaign run on Berezovsky's ORT TV channel eradicated his two main rivals
. In a series of popular prime-time news shows, Moscow mayor Yuri Luzhkov was portrayed as a murderous conman, while gory footage of a hip operation was broadcast to demonstrate that the former prime minister Yevgeny Primakov (who had recently undergone surgery) was too frail to run the country.

Both men had been thought to be serious presidential contenders; both men later dropped out of the race. Berezovsky said that he was consulted by the show's producers and has freely admitted the role of his company in Putin's success. "I was extremely pleased [with ORT's work]," he said. "I believe they helped Russia with a historic task."

Berezovsky's involvement in the war in Chechnya is less clear. He was secretly recorded holding long negotiations with key warlords last year - although he claims he was trying to represent Russia's interests during the talks. Berezovsky's success at negotiating the release of hostages from Chechnya has also prompted suspicion about the closeness of his ties in the region. The Chechen president Aslan Maskhadov last week claimed that Berezovsky had helped finance warlords Shamil Basayev and Khattab in their separatist campaign.

Last December, the businessman was elected as the parliamentary representative for the nearby region of Karachevo-Cherkess -- thereby securing himself immunity from prosecution.
Swiss prosecutors continue to investigate the way two Berezovsky-owned companies in Switzerland handled revenues from Aeroflot's coffers.

Berezovsky's future under Putin remains unclear. Some commentators expect the new president to prove his independence by making a great show of cutting ties with the powerful tycoons who wielded so much influence over Yeltsin. In his election campaigning, Putin won himself much popularity by promising to exterminate the oligarchs as a class, but Putin may not have enough power yet to distance himself from his backer.

George Soros's feelings of hostility towards Berezovsky are reciprocated. The Russian responded with fury to Soros's description in this article of his club as a mafia hangout, pointing out the building had won a prize for the authenticity of its restoration. In a recent tirade he went on to describe Soros as a liar and a hypocrite who had blurred the line between business and philanthropy.
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Re: Boris Berezovsky (businessman), by Wikipedia

Postby admin » Mon Aug 06, 2018 10:53 pm

CIA Financing of Chechen and Other Caucasus Regional Terrorists
by Wayne Madsen (USA)
Veterans Today
April 29, 2013

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Through a myriad of "civil society" organizations, the United States has been financing Chechen groups inside the autonomous republic, in Russia, and abroad.

However, large portions of U.S. assistance money has "bled" over to support Chechen and other North Caucasus terrorist groups, which the U.S. State Department and U.S. intelligence agencies insist on referring to as "separatist guerrillas", "nationalists", "insurgents", and "rebels", instead of terrorists.

The U.S. National Security Agency (NSA) has continuously refused to refer to Chechen and Islamic Emirate terrorists operating in Russia as "terrorists". NSA analysis reports of signals intelligence (SIGINT) intercepts of Russian police, Federal Security Bureau (FSB), Foreign Intelligence Service (SVR), and Russian military communications, including radio, landline and cellular telephone, fax, text message, and fax, have, since 2003, referred to Chechen and North Caucasus terrorists as "guerrillas". Prior to that year, TOP SECRET Codeword internal NSA directives stated that Chechen terrorists were to be called "rebels".

Imagine the surprise if the United States began referring to "Al Qaeda" as Islamist guerrillas and rebels instead of terrorists. Yet, that is exactly how the NSA and CIA have referred to terrorists in Russia that have launched deadly attacks on airports, trains, subway stations, schools, and movie theaters throughout the Russian Federation.

U.S. "humanitarian" and "civil society" assistance to radical Islamist groups has, for the past three decades, filtered into the coffers of terrorist groups celebrated as "freedom fighters" in Washington. This was the case with U.S. support for the Afghan Mujaheddin through such groups as the Committee for a Free Afghanistan during the Islamist insurgency against the People’s Democratic Republic of Afghanistan in the 1980s and the Bosnia Defense Fund in the 1990s.

In the case of Afghanistan, U.S. and Saudi money ended up in the hands of insurgents who would later form "Al Qaeda" and in Bosnia U.S. funds were used by Al Qaeda elements fighting against Yugoslavia and the Bosnian Serb Republic and, later, Al Qaeda elements supporting the Kosovo Liberation Army (KLA) in its war against Serbia.

After revelations that an entity called the Caucasus Fund was used by the CIA-linked Jamestown Foundation of Washington, DC to sponsor seminars on the North Caucasus in Tbilisi from January to July 2012, Georgian authorities moved to shut down the fund. The reason given by Georgia was that the organization had "fulfilled its stated mission".

Caucasus Fund and Jamestown Foundation events were attended by accused Boston Marathon bomber Tamerlan Tsarnaev, a citizen of Kyrgyzstan born to parents from Dagestan. Jamestown had previously held a seminar in Tbilisi on "Hidden Nations" in the Caucasus, which, among other issues, promoted a "Greater Circassia" in the Caucasus.

U.S. "civil society" aid to groups fomenting terrorism, nationalism, separatism, and irredentism in the Caucasus is either direct through the U.S. Agency for International Development (USAID) or covert through organizations funded by George Soros’s Open Society Institute.

Much can be learned about U.S. backing for terrorist groups operating in the North Caucasus from information gleaned from the tranche of a quarter million leaked classified State Department cables.

A November 12, 2009 Confidential cable from the U.S. embassy in Moscow implies that the Carnegie Center NGO in Moscow be engaged to stymie Russia’s political and economic goals in the North Caucasus, particularly by taking advantage of 50 percent unemployment in Ingushetiya and 30 percent in Chechnya. Areas of high unemployment in the Muslim world have served as prime recruiting grounds for Wahhabist and Salafist radical clerics financed by Saudi Arabia, Qatar, and the emirates of Sharjah and Ras al Khaimah. Dagestan is cited in a June 8, 2009 embassy Moscow cable as Russia’s "weakest link" in the Caucasus region.

A Confidential September 16, 2009 cable from the U.S. embassy in Moscow indicates that Assistant Secretary of State for European and Eurasian Affairs Philip Gordon was urged to push the concept that the Ramzan Kadyrov government in Chechnya had "neither control nor stability". The NGO Caucasian Knot told Gordon at a meeting at the U.S. embassy that "foreign fighters" were joining a jihad in the region and that there was a "Hobson’s Choice" between "terrorists" and "corrupt local government". Apparently, the Obama administration decided, likely with the strong support of then deputy national security adviser and current CIA director John O. Brennan, a confirmed Saudiphile and a participant in the Hadj pilgrimage to Mecca, opted for the terrorists.

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Chechen separatist leader Akhmed Zakayev and late Jewish Russian oligarch Boris Berezovsky in 2004.

Other leaked Confidential cables provide in-depth details on U.S., British, and Norwegian support for exiled "Chechen-Ichkeria" leader Akhmed Zakayev, a close friend of the late exiled Russo-Israeli tycoon Boris Berezovsky. A July 29, 2009 Confidential cable from the U.S. embassy in Oslo quotes the head of the Russian section at the Norwegian Foreign Ministry, Odd Skagestad, as telling the American embassy there that Zakayev was the "legitimate representative of not just the Chechen exile community, but of Chechens in Chechnya", although he added that "Zakayev is on various INTERPOL lists" for suspected terrorist links. Skagestad stated the Norwegian PST, Norway’s FBI, ignored INTERPOL arrest warrants and permitted Zakayev to visit Norway from his place of exile in London.

The Oslo embassy also stated that the Norwegian head of the "Chechnya Peace Forum", Ivar Amundsen, was very "tight lipped" about his activities and that he was a close friend of the late renegade ex-Russian intelligence officer Alexander Litvinenko. Zakayev has also received significant support from the governments of Denmark, Finland, and the Czech Republic, where there are active Chechen exile community. The Kavkaz Center, located in Helsinki, Finland runs a pro-Caucasus Emirate website and provides an important public relations service for Emirate leader Doku Umarov’s terrorist cells in southern Russia…

Ruslan Zaindi Tsarnaev, the Maryland-based uncle of suspected bombers Tamerlan and Dzokhar Dudayev, established the Congress of Chechen International Organizations, Incorporated, in Maryland on August 17, 1995 and in the District of Columbia on September 22, 1995. The Maryland entity’s status was forfeited and is not in good standing, likely because of delinquency in filing required fees and forms. The District of Columbia corporate entity was active for 17 years and seven months.

Interestingly, the DC corporate status was revoked at around the time of the Boston Marathon bombings. Ruslan Tsarnaev, also known as Ruslan Tsarni, a graduate of Duke University Law School in North Carolina, worked for USAID in Kazakhstan and other countries in preparing them for vulture capitalist enterprises such as derivative financing and hedge funds.

The Maryland address for the Congress of Chechen International Organizations is listed in Maryland corporate records as 11114 Whisperwood Lane, Rockville, Maryland 20852, which is the address for Graham E. Fuller.

Fuller is a former Russian-speaking CIA official, including station chief in Kabul and vice-chair of the National Intelligence Council during the 1980s Iran-contra scandal, with which Fuller was heavily involved. Fuller has been active in events sponsored by the Jamestown Foundation, including keynoting an October 29, 2008 conference titled "Turkey & the Caucasus after Georgia".


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Samantha Ankara Fuller

Fuller’s daughter, Samantha Ankara Fuller, is a UK and US dual national who is listed as a director of Insource Energy, Ltd. of the UK, a firm owned by Carbon Trust, a not-for-profit company "with the mission to accelerate the move to a low carbon economy". According to the Bank of England’s Prudential Regulation Authority’s Financial Services Register, Samantha Ankara Fuller’s previous name was Mrs. Samantha Ankara Tsarnaev. She was the wife of Ruslan Tsarnaev and ex-aunt of the two accused Boston Marathon bombers. At the time of her marriage to Ruslan Tsarnaev, Fuller was an investment adviser to Dresdner Bank, J P Morgan Ltd. in the UK, J P Morgan Securities, and J P Morgan Chase Bank, according to the UK Financial Services Register.

Ruslan Tsarnaev is the vice president for business development and corporate secretary for Big Sky Energy Corporation, headquartered in Calgary, Canada with the headquarters of its Big Sky Group holding company located in Little Rock, Arkansas.

North Carolina court records indicate that the Tsarnaevs were married in North Carolina in 1995, the year Ruslan established the Congress of Chechen International Organizations in Washington, DC and Maryland, and divorced in 1999. The divorce was granted in Orange County, North Carolina.

It is noteworthy that the Washington DC corporate registration agent for the Congress of Chechen International Organizations is Prentice-Hall.

Prentice-Hall is owned by Pearson, the publishing and educational firm based in London that owns the Financial Times and fifty percent of The Economist Group. In 1986, the Economist Group bought the New York-based Business International Corporation (BIC), the CIA front company for which Barack Obama, Jr. served as an employee from 1983 to 1984, and folded it into the Economist Intelligence Unit.


The other uncle of the alleged Boston bombers, Alvi S. Tsarnaev of Silver Spring, Maryland, not far from his brother Ruslan’s home, is apparently affiliated with another Chechen exile organization, the United States-Chechen Republic Alliance Inc., with an address of 8920 Walden Road, Silver Spring, Maryland 20901-3823. The address is also that of Alvi S. Tsarnaev. The registered officer for the organization is listed in U.S. Internal Revenue Service filings as Lyoma Usmanov. The organization is registered as a charitable organization engaged in "International Economic Development".

In the book, Power and Purpose: U.S. Policy Toward Russia after the Cold War, by James M. Goldgeier and Michael McFaul, the latter the present activist and neo-conservative U.S. ambassador to Russia who has directly intervened in Russian politics to seek the ouster of President Vladimir Putin from power and stir up secessionist, religious, and political extremists throughout the Russian Federation. According to this book, former National Security Adviser Zbigniew Brzezinski was Usmanov’s sponsor in the United States: "Brzezinski helped to establish and finance Chechen representation in the United States headed by Usmanov".

Another U.S.-based group that has championed the Chechen movement, regardless of the presence of terrorist entities, is the American Committee for Peace in the Caucasus (ACPC), formerly known as the American Committee for Peace in Chechnya. The ACPC was founded in 1999 by Freedom House, a Cold War right-wing group that has been financed by the National Endowment for Democracy and USAID-funded groups.

The ACPC has defended the political asylum in the U.S. of former Chechen Foreign Minister Ilyas Akhmadov, accused of past terrorist links. The ACPC and Freedom House work with the Jamestown Foundation, founded in 1984 by CIA director William Casey, along with high-ranking intelligence defectors from the Soviet Union, Romania, Poland, and Czechoslovakia.

An October 17, 2008 Sensitive cable from the U.S. embassy in Moscow outlines the priorities for USAID and NGOs in their operations in the North Caucasus. The cable states that the North Caucasus Program was active in North Ossetia and Kabardino-Balkaria and was working with local NGOs. The cable states explicitly that USAID’s mission in the North Caucasus was to "advance critical U.S. interests".
USAID-specified "hot zones" included Chechnya, Ingushetia, and the Elbruz region of Kabardino-Balkaria. The USAID North Caucasus Program focused on four key regions: Chechnya, Ingushetia, North Ossetia, and Dagestan, plus Krasnodarsky Krai, Adygea Republic, Karachay-Cherkessia, Stavropolsky Krai, and Kabardino-Balkarskaya Republic.

USAID’s network of NGOs in the region are identified in the cable. They are: International Rescue Committee (IRC), World Vision, Keystone, IREX, Children’s Fund of North Ossetia (CFNO), Russian Microfinance Center, UNICEF, ACDI/VOCA, Southern Regional Resource Center (SRAC), Center for Fiscal Policy (CFP), Center for International Private Enterprise (CIPE), Institute for Urban Economics, "Faith, Hope and Love (FHL), International Federation of the Red Cross (IFRC), and the Fund for Sustainable Development (FSD). Many of these groups have close links with the CIA and/or Soros, particularly World Vision and IRC.

The interests who are linked to the Boston Marathon and terrorism in Russia run the gamut from Soros-funded NGOs, to CIA front companies and non-official cover (NOC) agents, foreign intelligence services, and Western energy companies.
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Re: Boris Berezovsky (businessman), by Wikipedia

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Part 1 of 2

Roman Abramovich
by Wikipedia
Accessed: 8/28/18

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Image
Roman Abramovich
Abramovich in 2007
Born Roman Arkadyevich Abramovich
24 October 1966 (age 51)
Saratov, Russian SFSR, Soviet Union
Nationality
Russian-Israeli
Occupation Businessman, entrepreneur, politician
Known for
Owner of Millhouse Capital
Owner of Evraz
Major shareholder of Norilsk Nickel
Owner of Chelsea F.C.
Net worth US$11.5 billion[1] (2018)
Spouse(s) Olga Lysova
(m. 1987; div. 1990)
Irina Malandina
(m. 1991; div. 2007)
Dasha Zhukova
(m. 2008; div. 2017)[2]
Children 7
Awards
Orden of Honour.png Order of Honour
Orden of Friendship.png Order of Friendship
Governor of Chukotka
In office
17 December 2000 – 3 July 2008
Preceded by Alexander Nazarov
Succeeded by Roman Kopin

Roman Arkadyevich Abramovich (Russian: Рома́н Арка́дьевич Абрамо́вич, pronounced [rɐˈman ɐrˈkadʲjɪvʲɪtɕ ɐbrɐˈmovʲɪtɕ]; Hebrew: רומן אברמוביץ'; born 24 October 1966) is a Russian-Israeli billionaire businessman, investor, and politician.

Abramovich is the primary owner of the private investment company Millhouse LLC, and is best known outside Russia as the owner of Chelsea Football Club, a Premier League football club. He was formerly governor of Chukotka Autonomous Okrug from 2000 to 2008.

According to Forbes, Abramovich's net worth was US$11.5 billion in 2018[1] making him the richest person in Israel, 11th-richest in Russia, and the 140th-richest person in the world.
[1][3] He has donated more money than any other living Russian, with donations between the years 1999 and 2013 of more than US$2.5 billion to build schools, hospitals and infrastructure in Chukotka.[4]

Chukotka Autonomous Okrug (Russian: Чуко́тский автоно́мный о́круг, tr. Chukotsky avtonomny okrug, IPA: [tɕʊˈkotskʲɪj ɐftɐˈnomnɨj ˈokrʊk]; Chukchi: Чукоткакэн автономныкэн округ, Chukotkaken avtonomnyken okrug, IPA: [tɕukotˈkaken aβtonomˈnəken ˈokɹuɣ]) or Chukotka (Чуко́тка) is a federal subject (an autonomous okrug) of Russia. It is geographically located in the Far East region of the country, and is administratively part of the Far Eastern Federal District. Chukotka is the 2nd-least-populated federal subject at 50,526 (2010) and the least densely populated.[10]

Image

Anadyr is the largest town and the capital of Chukotka, and the easternmost settlement to have town status in Russia.

Image

Chukotka is home to Elgygytgyn Lake, an impact crater lake, and the village of Uelen, the easternmost settlement in Russia and the closest substantial settlement to the United States. The autonomous okrug's surface area is 737,700 square kilometers (284,800 sq mi), about 6% larger than the U.S. state of Texas, and is the 7th-largest Russian federal subject. The region is the most northeasterly region of Russia, and since the Alaska Purchase has been the only part of Russia lying partially in the Western Hemisphere (east of the 180th meridian). Chukotka shares a border with the Sakha Republic to the west, Magadan Oblast to the south-west, and Kamchatka Krai to the south.

Chukotka is primarily populated by ethnic Russians, Chukchis, and other indigenous peoples. It is the only autonomous okrug in Russia that is not included in, or subordinate to, another federal subject, having separated from Magadan Oblast in 1993.

Chukotka Autonomous Okrug, by Wikipedia


Personal life

Family


Abramovich's family is Jewish and are from Tauragė, Lithuania,[5][6][7] with the Lithuanian spelling of the family name being Abramavičius. His father Arkady (Aron) Abramovich (1937–1970) was a state office manager, while his grandfather Nahim (Nahman) Abramovich (1887–1942) was a businessman.[8][9] Nahim (Nahman) Abramovich was born in Eržvilkas, Lithuania and his wife (Roman Abramovich's paternal grandmother) was Tauba (maiden name Berkover) - born in Jurbarkas, Lithuania. They were married in Tauragė, Lithuania in 1925.[10] Abramovich's mother was Irina Michalenko, his maternal grandfather was Vassili Michalenko, and his maternal grandmother was Faina Grutman.[11] After losing both parents at a young age, Abramovich was raised by relatives and spent much of his youth in the Komi Republic in northern Russia. Abramovich is Chairman of the Federation of Jewish Communities of Russia (which is allied with Putin's administration), a trustee of the Moscow Jewish Museum[12] and donates money to the Chabad movement.[13]

Abramovich has been married three times. In December 1987, he married Olga Yurevna Lysova;[14] they divorced in 1990. In October 1991, he married a former Russian Aeroflot stewardess, Irina Vyacheslavovna Malandina (born 1967).[15][16] They divorced in 2007.[14] He and Malandina have five children; Ilya, Arina, Sofia, Arkadiy and Anna (born 1992).[16][17] On 15 October 2006, the News of the World reported that Irina had hired two top UK divorce lawyers, following reports of Abramovich's close relationship with the then 25-year-old Dasha Zhukova, the former girlfriend of the tennis player Marat Safin and daughter of a prominent Russian oligarch, Alexander Zhukov. It was speculated that a future divorce settlement (amounting to a conjectured £5.5 billion (€6.5 billion)) might be the highest ever on record. The Abramoviches replied that neither had consulted attorneys at that point.[18][19] However, they later divorced in Russia in March 2007, with a settlement reported as being US$300 million (€213 million).[16][20] Abramovich married Zhukova in a private ceremony in 2008,[21] and they have two children, a son, Aaron Alexander, and a daughter, Leah Lou.[17] In August 2017 the couple announced that they would separate.[22]


Image
Collector Dasha Zukhova with photographer Rachel Chandler.


Business career

Abramovich started his multi-billion-dollar business during his army service.[23] After a brief stint in the Soviet Army, Abramovich married his first wife, Olga. Abramovich first worked as a street-trader, and then as a mechanic at a local factory.[24] At the peak of perestroika, Abramovich sold imported rubber ducks from his Moscow apartment.[25]

Abramovich attended the Gubkin Institute of Oil and Gas in Moscow (where he sold retreaded car tires as a sideline[26]), then traded commodities for Runicom, a Swiss trading company.[27]

In 1988, as perestroika opened up opportunities for privatization in the Soviet Union, Abramovich got a chance to legitimise his old business.[28] He and Olga set up a company making dolls. Within a few years his wealth spread from oil conglomerates to pig farms.
He also started investing in other businesses. Abramovich set up and liquidated at least 20 companies during the early 1990s, in sectors as diverse as tire retreading and bodyguard recruitment.[29][30]

From 1992 to 1995, Abramovich founded five companies that conducted resale, produced consumer goods, and acted as intermediaries, eventually specializing in the trading of oil and oil products. However, in 1992 he was arrested and sent to prison in a case of theft of government property: AVEKS-Komi sent a train containing 55 cisterns of diesel fuel, worth 3.8 million roubles, from the Ukhta Oil Refinery; Abramovich met the train in Moscow and resent the shipment to the Kaliningrad military base under a fake agreement, but the fuel arrived in Riga. Abramovich co-operated with the investigation, and the case was closed after the oil production factory was compensated by the diesel's buyer, the Latvian-US company, Chikora International.[14]

In 1995, Abramovich and Boris Berezovsky, an associate of President Boris Yeltsin, acquired the controlling interest in the large oil company Sibneft. The deal was within the controversial loans-for-shares program and each partner paid US$100 million for half of the company, above the stake's stock market value of US$150 million at the time, and rapidly turned it up into billions. The fast-rising value of the company led many observers, in hindsight, to suggest that the real cost of the company should have been in the billions of dollars.[31] Abramovich later admitted in court that he paid huge bribes (in billions) to government officials and obtained protection from gangsters to acquire these and other assets (including aluminium assets during the aluminium wars).[32]

Thus the main stages of Abramovich's financial career were January 1989 to May 1991, as chairman of the Comfort Co-op (manufacturer of plastic toys), and May 1991 to May 1993, as director of the ABK small enterprise in Moscow. According to various sources, from 1992 to 1995 Roman Abramovich set up five companies engaged in the production of consumer goods and selling-and-buying. In May 1995, jointly with Boris Berezovsky, he set up the P.K. Trust close joint-stock company. In 1995 and 1996, he established another 10 firms: Mekong close joint-stock company, Centurion-M close joint-stock company, Agrofert limited liability company, Multitrans close joint-stock company, Oilimpex close joint-stock company, Sibreal close joint-stock company, Forneft close joint-stock company, Servet close joint-stock company, Branco close joint-stock company, Vector-A limited liability company, which, again together with Berezovsky, he used to purchase the shares of the Sibneft public company.[33]

The Guardian describes Abramovich's career as follows:[34]

By 1996, at the age of 30, Abramovich had become so rich and politically well-connected that he had become close to President Boris Yeltsin, and had moved into an apartment in the Kremlin at the invitation of the Yeltsin family. In 1999, and now a tycoon, Abramovich was elected governor of Russia's remote, far eastern province of Chukotka, and has since lavished £112 million (€132 million) on charity to rebuild the impoverished region. The identikit image being pieced together for us was of a self-made man who was not only powerful and wealthy, but acutely aware of those who had done less well in the tumultuous 1990s, when the Soviet Union fell.


Friendship with Boris Berezovsky

In 1992, Abramovich founded Mekong. He began selling oil from Noyabrsk. Eventually, he met fellow Russian businessman and entrepreneur Boris Berezovsky.

According to two different sources, he first met Berezovsky either at a meeting of the Russian businessmen in the Caribbean in 1993[35] or in the summer of 1995 on the yacht of his friend Pyotr Aven.[36]


Berezovsky introduced Abramovich to "the family", the close circle around the then president, Boris Yeltsin, which included his daughter Tatyana Dyachenko and chief security adviser, Alexander Korzhakov.[35]

Together with Berezovsky, Abramovich founded the offshore company Gibraltar-registered Runicom Ltd. and five Western European subsidiaries. Abramovich headed the Moscow affiliate of the Swiss firm, Runicom S.A. In August 1995, Sibneft was created by Boris Yeltsin’s presidential decree. It was rumored that Abramovich was the chief of the organization with Berezovsky promoting the business in higher circles.[14]

Acquisition of Sibneft, aluminium wars, and loans-for-shares

In 1995, Abramovich and Berezovsky acquired a controlling interest in the giant Soviet oil company Sibneft. Affiliates of Abramovich, with affiliates of Boris Berezovsky, purchased Sibneft for US$100.3 million (the company was worth US$2.7 billion at that time). As of 2000, Sibneft produced around US$3 billion worth of oil annually.[37] Abramovich established several "fly-by-night" firms and together with his friend Boris Berezovsky used them to acquire the stock of Sibneft. As a result, the tycoon managed to pay for the company 25 times less than the market price. Bought for a total of US$200 million, Sibneft is now worth seventy five times as much.[38]

The Times claimed that he was assisted by Badri Patarkatsishvili.[39] This acquisition was under the controversial loans-for-shares programme initiated by President Boris Yeltsin.[40][41][42] After Sibneft, Abramovich's next target was the aluminium industry. After privatisation the 'aluminium wars' led to murders of smelting plant managers, metals traders and journalists as groups battled for control of the industry. Abramovich famously emerged as the winner of the aluminium wars.[39] The Times stated that in a BBC investigation into Abramovich's wealth, reporter John Sweeney noted that, after the oligarch (Abramovich) emerged at the top of the trade, the murders stopped.[43]

Relationship with Boris Berezovsky and Badri Patarkatsishvili

The Times also notes:[39]

Mr Abramovich discloses that there was a showdown at St Moritz airport in Switzerland in 2001 when Mr [Badri] Patarkatsishvili asked him to pay US$1.3 billion (€925 million) to Mr Berezovsky. "The defendant agreed to pay this amount on the basis that it would be the final request for payment by Mr Berezovsky and that he and Mr Patarkatsishvili would cease to associate themselves publicly with him and his business interests." The payment was duly made.

Mr Abramovich was also willing to pay off Mr Patarkatsishvili. He states that he agreed to pay US$585 million (€416 million) "by way of final payment".

Mr Abramovich denies that he helped himself to Mr Berezovsky's interests in Sibneft and aluminium or that he threatened a friend of the exile. "It is denied that Mr Abramovich made or was party to the alleged explicit or implicit coercive threats or intimidation," he states.


According to court-papers submitted by Abramovich and seen by The Times (UK),[39] Abramovich mentions in the court-papers:

Prior to the August 1995 decree [of Sibneft's creation], the defendant [Abramovich] informed Mr Berezovsky that he wished to acquire a controlling interest in Sibneft on its creation. In return for the defendant [Abramovich] agreeing to provide Mr Berezovsky with funds he required in connection with the cash flow of [his TV company] ORT, Mr Berezovsky agreed he would use his personal and political influence to support the project and assist in the passage of the necessary legislative steps leading to the creation of Sibneft.

Mr Patarkatsishvili did ... provide assistance to the defendant in the defendant's acquisition of assets in the Russian aluminium industry.


According to the Mirror Online, Abramovich paid Berezovsky tens, and even hundreds, of millions every year for "krysha", or mafia protection.[44]

Investments in Music Messenger, Brain Recovery and StoreDot

In 2015, Abramovich invested and led a $30 million round of funding in Israeli music sharing start-up Music Messenger founded by OD Kobo.[45][46] Besides Abramovich, several well-known people in the global music industry also took part in the company's previous round, among them David Guetta, Nicki Minaj, Tiësto, Avicii, will.i.am, Benny Andersson and others.[47]

Furthermore, Abramovich is invested in few other Israeli startups in different fields. Among them is BrainQ, an Israeli startup which develops artificial intelligence-powered technologies to treat neuro disorders, such as stroke, spinal cord injury and traumatic brain injury.[48] Also StoreDot, founded by Dr. Doron Myersdorf, where Abramovich has invested over $30 million.[49]

Relationship with Kremlin

Boris Yeltsin


By 1996, at the age of 30, Abramovich had become close to President Boris Yeltsin, and had moved into an apartment inside the Kremlin at the invitation of the Yeltsin family.[34]

In 1999, the 33-year-old Abramovich was elected governor of the Russian province of Chukotka. He ran for a second term as governor in 2005. The Kremlin press service reported that Abramovich's name had been sent for approval as governor for another term to Chukotka's local parliament, which confirmed his appointment on 21 October 2005
.

Vladimir Putin

Abramovich was the first person to originally recommend to Yeltsin that Vladimir Putin be his successor as the Russian president.[50]:135 When Putin formed his first cabinet as Prime Minister in 1999, Abramovich interviewed each of the candidates for cabinet positions before they were approved.[31]:102 Subsequently, Abramovich would remain one of Putin's closest confidants. In 2007, Putin consulted in meetings with Abramovich on the question of who should be his successor as president; Medvedev was personally recommended by Abramovich.[50]:135, 271

Chris Hutchins, a biographer of Putin, describes the relationship between the Russian president and Abramovich as like that between a father and a favorite son. Abramovich himself says that when he addresses Putin he uses the Russian language's formal "Вы" (like Spanish "usted", German "Sie", Italian "lei" or French "vous"), as opposed to the informal "ты" (Spanish "tú", German "du", Italian "tu" or French "tu"). Abramovich says that the reason is because 'he is more senior than me'.[51] Within the Kremlin, Abramovich is referred to as "Mr A".[44]

In September 2012, the High Court judge Elizabeth Gloster said that Abramovich's influence on Putin was limited: "There was no evidential basis supporting the contention that Mr Abramovich was in a position to manipulate, or otherwise influence, President Putin, or officers in his administration, to exercise their powers in such a way as to enable Mr Abramovich to achieve his own commercial goals."[52]

Political career

Duma member


In 1999, Abramovich was elected to the State Duma as the representative for the Chukotka Autonomous Okrug, an impoverished region in the Russian Far East. He started the charity Pole of Hope to help the people of Chukotka, especially children, and in December 2000, was elected governor of Chukotka, replacing Alexander Nazarov.

Governor

Abramovich was the governor of Chukotka from 2000 to 2008. It has been estimated that he spent over US$1.3 billion (€925 million) of his own money on the region,[53] which now has one of the highest birth rates in Russia.[54] Under Abramovich, living standards improved, schools and housing were restored and new investors were being drawn to the region.[55]

In 2003, Abramovich was named Person of the Year by Expert, a Russian business magazine. He shared this title with Mikhail Khodorkovsky.

Abramovich was awarded the Order of Honour for his "huge contribution to the economic development of the autonomous district [of Chukotka]", by a decree signed by the President of Russia.[56]

Resignation

In early July 2008 it was announced that President Dmitri Medvedev had accepted Abramovich's request to resign as governor of Chukotka, although his various charitable activities in the region would continue. In the period 2000–2006 the average salaries in Chukotka increased from about US$165 (€117/£100) per month in 2000 to US$826 (€588/£500) per month in 2006.[14][57]

Controversies

Roman Abramovich has been alleged to be involved in various wrongdoings. The Times said that Abramovich "famously emerged triumphant after the 'aluminium wars', in which more than 100 people are believed to have been killed in gangland feuds over control of the lucrative smelters."[39][58]

Boris Berezovsky allegations

Boris Berezovsky (his one-time business partner) alleged in 2008 that Abramovich harassed him with "threats and intimidation" to cheat him to sell his valuable shares at less than their true worth.

In 2011, Berezovsky brought a civil case against Abramovich, called Berezovsky v Abramovich,[59] in the High Court of Justice in London, accusing Abramovich of blackmail, breach of trust and breach of contract, and seeking over £3 billion in damages.[60]

On 31 August 2012, the High Court dismissed the lawsuit. The High Court judge stated that because of the nature of the evidence, the case hinged on whether to believe Berezovsky or Abramovich's evidence. The judge found Berezovsky to be "an unimpressive, and inherently unreliable witness, who regarded truth as a transitory, flexible concept, which could be moulded to suit his current purposes", whereas Abramovich was seen as "a truthful, and on the whole, reliable witness".[60][61]

Bribery

In 2008, The Times reported that Abramovich admitted that he paid billions of dollars for political favours and protection fees to obtain a big share of Russia's oil and aluminium assets as was shown by court papers obtained by The Times.[39]

Allegations of illegal share-dilution

Yugraneft, an affiliate of Sibir Energy, is seeking billions of dollars in damages in a lawsuit in London against Roman Abramovich and his investment company Millhouse Capital, alleging that it was cheated out of its Russian assets.[62] The proceedings "involve substantial claims to recover the proceeds of the diluted interest", said Sibir Energy, a company co-owned by the billionaire Shalva Chigirinsky.[62]

Arrest for theft

In 1992, he was arrested in a case of theft of government property. AVEKS-Komi sent a train containing 55 cisterns (tankers) of diesel fuel, worth Р3.8 million (Roubles), from the Ukhta Oil Refinery (Case No. 79067 for the large-scale theft of state property);[63] Abramovich met the train in Moscow and resent the shipment to the Kaliningrad military base under a fake agreement, but the fuel arrived in Riga. Abramovich cooperated with the investigation, and the charges were dropped after the oil production factory was compensated by the diesel's buyer, the Latvian-U.S. concern Chikora International.[14]

Allegations of loan fraud

An allegation emerging from a Swiss investigation links Roman Abramovich, through a former company, and numerous other Russian politicians, industrialists and bankers to using a US$4.8 billion (€3.4 billion) loan from the IMF as personal slush fund; an audit sponsored by the IMF itself determined that all of the IMF funds had been used appropriately.[64]

In January 2005, the European Bank for Reconstruction and Development (EBRD) indicated that it would be suing Abramovich over a £9 million (US$14.9 million/€10.6 million) loan.[65] The EBRD said that it is owed US$17.5 million (€12.45 million/£10.6 million) by Runicom, a Switzerland-based oil trading business which had been controlled by Abramovich and Eugene Shvidler. Abramovich's spokesman indicated that the loan had previously been repaid.[66]

Antitrust law violation in Russia

Russia's antitrust body, the Federal Antimonopoly Service, claimed that Evraz Holding, owned in part by Abramovich, had breached Russian competition law by offering unfavorable terms for contractors and discriminating against domestic consumers for coking coal, a key material used in steel production.[67]

Dispute with Kolomoyskyi

According to Putin, Abramovich has been cheated by Ukrainian-Cypriot-Israeli oligarch Igor Kolomoyskyi. Putin claimed in 2014 that Kolomoyskyi had reneged on a contract with Abramovich, saying "He [Kolomoyskyi] even managed to cheat our oligarch Roman Abramovich two or three years ago. Scammed him, as our intellectuals like to say. They signed some deal, Abramovich transferred several billion dollars, while this guy never delivered and pocketed the money. When I asked him [Abramovich]: 'Why did you do it?' he said: 'I never thought this was possible.'"[68]

Abramovich, European football, and ice hockey

Chelsea F.C.


In June 2003, Abramovich became the owner of the companies that control Chelsea Football Club in West London. The previous owner of the club was Ken Bates, who went on to buy Leeds United. Chelsea immediately embarked on an ambitious programme of commercial development, with the aim of making it a worldwide brand on a par with footballing dynasties such as Manchester United and Real Madrid, and also announced plans to build a new state-of-the-art training complex in Cobham, Surrey.[69]

Chelsea finished their first season after the takeover in second place in the Premier League, up from fourth the previous year. They also reached the semi-finals of the Champions League, which was eventually won by surprise contender Porto, managed by José Mourinho. For Abramovich's second season at Stamford Bridge, Mourinho was recruited as the new manager, replacing the incumbent Claudio Ranieri. Chelsea ended the 2004–05 season as league champions for the first time in 50 years and only the second time in their history. Since the takeover, the club have won 13 major trophies – the UEFA Champions League, the UEFA Europa League, the Premier League five times, the FA Cup four times (with 2010 providing the club's first ever league and FA Cup double), and the League Cup three times, making Chelsea the second most successful English trophy winning team in the decade with 15 honours, behind only Manchester United with 17 honours in the same time span.

Image
Roman Abramovich at Stamford Bridge during a 4–0 victory over Portsmouth in August 2008.

It was argued that Abramovich's involvement with Chelsea distorted the football transfer market throughout Europe,[70] as his wealth often allowed the club to purchase players virtually at will. That has changed in recent years, but he did sanction the transfer of Andriy Shevchenko for a then-British record transfer fee of around £30 million (€35.3 million).

In the year ending June 2005, Chelsea posted record losses of £140 million (€165 million) and the club was not expected to record a trading profit before 2010, although this decreased to reported losses of £80.2 million (€94.3 million) in the year ending June 2006.[71] In a December 2006 interview, Abramovich stated that he expected Chelsea's transfer spending to fall in years to come.[72]

Abramovich is present at nearly every Chelsea game and shows visible emotion during matches, a sign taken by supporters to indicate a genuine love for the sport, and usually visits the players in the dressing room following each match. This stopped for a time in early 2007, when press reports appeared of a feud between Abramovich and manager Mourinho regarding the performance of certain players, notably Andriy Shevchenko.[73]

In the early hours of 20 September 2007, Mourinho announced his exit as Chelsea manager by mutual consent with the club following a meeting with the board.[74] The former Israel coach and Chelsea's director of football, Avram Grant, was named as his replacement.[75] Ever since Grant had joined Chelsea in 2007, there had been friction between him and Mourinho. Mourinho reportedly told Grant not to interfere in team affairs but, with Abramovich's backing, Grant's profile at the club rose after he was made a member of the board. This event apparently did not go down well with Mourinho and may have contributed to his surprise departure.[76] Grant led Chelsea to the position of runners-up in the Premiership and the club's first appearance in the Champions League final, beaten by Manchester United on both accounts. Nevertheless, on 24 May 2008, Grant was sacked as manager by Abramovich.[77]

On 11 June 2008, it was announced that Luiz Felipe Scolari, who had taken Brazil to World Cup glory in 2002, would be taking over as manager, but he only lasted until 9 February 2009 before being sacked.
In February 2009, acclaimed coach Guus Hiddink was appointed caretaker manager for the rest of the 2008/09 season, delivering Chelsea's first post-Mourinho trophy with the FA Cup.

Hiddink was replaced by another former European Cup winning boss, Carlo Ancelotti. In May 2010, Ancelotti took Chelsea to their first league and FA Cup "double" in his first season as manager. The following season, in January 2011, Spanish footballer Fernando Torres completed his move to Chelsea on a ​5 1⁄2-year contract on 31 January for an undisclosed fee, reported to be £50 million, which set a new record for a British transfer and made him the fourth most expensive footballer in history. Ancelotti was sacked as manager at the end of his second season with the club in May 2011, after Chelsea's impressive form at the start of the campaign collapsed spectacularly during the winter months.

André Villas-Boas, after taking Porto to a Europa League triumph, and having previously worked alongside Mourinho at Stamford Bridge, was appointed as Abramovich's seventh manager of Chelsea on 22 June 2011. Villas-Boas, however, was sacked in on 4 March due to a bad run of form, with only one win in 11 games. The next manager was Roberto Di Matteo, who was appointed to this role after winning the Champions League and the FA Cup serving in a caretaker capacity. Di Matteo was also sacked on 21 November 2012 after their 3–0 loss to Juventus.[78] Former Liverpool boss Rafael Benítez was appointed as manager for the remainder of the club's campaign. He won Chelsea the 2012–13 UEFA Europa League against Benfica before leaving at the end of his term as interim manager.


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Roman Abramovich watches his team Chelsea play against Leicester City, August 2014

After the 2012–13 season, Benítez left Chelsea, whereupon José Mourinho returned as manager, signing a four-year deal.[79] On 1 July 2013, Chelsea celebrated ten years under Abramovich's ownership. Before the first game of the 2013–14 season against Hull City on 18 August 2013, the Russian thanked Chelsea supporters for ten years of support in a short message on the front cover of the match programme, saying, "We have had a great decade together and the club could not have achieved it all without you," "Thanks for your support and here’s to many more years of success."[80]
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