#10 - RW 7268
Sunday Telegraph (UK)
July 27, 2003
'Russian billionaires beware'
Boris Berezovsky, the original kingmaker among Moscow's oligarchs, warns the new capitalists against Putin's 'totalitarian' ambitions. Simon Bell meets him
Three years after fleeing president Putin's attack on him and his businesses in Moscow, the Russian billionaire Boris Berezovsky loiters in his manicured Surrey garden watching history apparently repeat itself in Russia.
In the past three weeks, his fellow oligarch, Mikhail Khodorkovsky, head of Yukos - the internationally respected oil giant - became a target of Putin's conflict with the oligarchs. In what is widely seen as an attempt to neuter them politically, Khodorkovsky's deputy was arrested and Yukos's offices were raided by masked police.
Khodorkovsky's response was to announce that he will steer clear of politics until 2007. Meanwhile, Sibneft, the oil company controlled by Roman Abramovich - the billionaire 36-year-old purchaser of Chelsea FC - has been criticised by the Russian authorities for the way he has minimised tax payments.
Putin's threatening behaviour is seen by Berezovsky - whom the Russian authorities want to prosecute for fraud - as vindication of his allegations about the president's totalitarian aims since his election in 2000. "At the end of the day," Berezovsky says, "Misha [Khodorkovsky] will meet with the same fate as me. The others will follow. Abramovich, Deripaska. Unless they fight.
"Putin is creating the necessary conditions for an authoritarian government. He seized the mass media for the Kremlin. Now he wants privatisation reversed and the Russian economy in his hands."
And Berezovsky claims that the probe of Yukos is damaging the confidence of international investors: "We will see what happens but already in a week, $20bn of capital was exported from Russia and Western investors are getting nervous."
On Monday, Khodorkovsky appeared to have caught up with what his fellow oligarch has been saying and was reported to have warned about a drift in Russia back towards totalitarianism. Berezovsky says: "Putin cares more about power than democracy or even the economy. The danger is that he is sincere. He really believes that the centralised system is the best."
The battle for Russia's future is coming to a head at the end of this year, with the elections for the state parliament and then, a few months later, the presidential elections. Will Putin be re-elected in 2004? "Either he will not be, or he'll cheat the elections," says Berezovsky. "And then the world will see, and never again will the Queen be hostess to Putin."
Boris Berezovsky had been at the centre of Russian business and politics since Yeltsin came to power. He was the kingmaker among the oligarchs who, in 1996, put their money behind Yeltsin to prevent the communists returning to the Kremlin. It was Berezovsky's television channel, ORT, and that of another oligarch, Vladimir Gusinsky - NTV - which helped Yeltsin win the presidency.
However, the two media barons were the first to be driven out of Russia and have their assets seized, within months of Putin's election. Putin's Kremlin now controls or influences all of Russia's mass media.
"It was at the time of the Kursk submarine disaster in August 2000," Berezovsky says. "ORT, which I controlled, broadcast an interview with the wives and sisters of the submariners. Putin called me to the Kremlin. He was very angry that these women criticised him. He said I was starting a fight against him. 'Why?' I asked. He replied: 'Because your channel is interviewing prostitutes who say they are wives and sisters'."
Berezovsky checked the facts with ORT journalists and found their story was correct. He then learned that the women had already given an interview to the state TV company RTR which didn't broadcast it, so the spouses and children came to ORT.
"Putin then told me he wanted to control ORT himself. 'How?' I asked him, 'it belongs to me'. 'We'll take control,' Putin said, 'you need to sell'. I said I didn't need to sell. He got up and said goodbye. That was the last time we spoke. Within a month I had to leave Moscow. I sold my shares in Sibneft to Roman Abramovich."
With the departure of Berezovsky and Gusinsky, the other oligarchs swiftly made a deal with Putin. That deal may now be starting to unravel with the harassment of Khodorkovsky.
Anyway, in the three years since Berezovsky left Russia he has energetically campaigned to challenge Putin in the Russian parliament.
"I was happy when Putin became president," he says. "Then I was disappointed as he took steps backwards. For the first time, I wanted power, to stop it." To this end, he tried to consolidate power among the parties opposed to Putin, including his own Liberal Russia party and even the communists.
He says: "It's better that there's a communist opposition than none at all. But my worry is that polarisation between Putin and the communists will make the communists too powerful."
In the past year, two leading members of Berezovsky's Liberal Russia party have been assassinated. The party's regional offices are frequently raided by state security and Berezovsky himself is in exile. How can he fight Putin from abroad when the president controls all the mass media?
"My main instrument is their own mass media," he counters. "I am using it. I am identifying things which their media must broadcast and broadcast in a way they have never broadcast them before. For example, I am planning a meeting of 100,000 people in September, in alliance with the Soldiers' Mothers Committee, against the war in Chechnya. They will have to report it, or they will try to stop it. I want to watch how they try to stop that."
The war in Chechnya, the original source of Putin's popularity, is now rebounding on him. Every day at least five Russian soldiers die in this brutal conflict. The leader of the peace process in Chechnya, Ivan Rybkin, is a member of Liberal Russia. Berezovsky seeks to use the war as a focal point for public demonstrations against the Kremlin.
"Society in Russia is different from in Britain," he says. "People don't express their position in Russia. The communists destroyed individualism and people don't think they're responsible for anything. In London, I watch 400,000 people demonstrate against a law prohibiting hunting. In Russia we have trouble raising a demonstration against this war."
But why should the electorate have any confidence in the oligarchs, some of whom have netted vast wealth from purchasing former state-owned assets at knockdown prices?
"There are two types of oligarch," he says. "Those who want to develop business and Russia, and those who don't care for Russia. Khodorkovsky is one of the former. I too want to make my country better.
But even educated people welcome the blow against Khodorkovksy, for two reasons: they see us as robbers and, alas, they like it that the Kremlin is doing away with Jewish capital [Berezovsky, Abramovich, Khodorkovsky and several of the other oligarchs are of Jewish origin]. The Kremlin kindles this flame of nationalism."
Defending themselves, Berezovsky believes, is the only way the oligarchs can defend Russia.
"The difference between me and the others is that I was never ashamed to formulate the power of capital and say that capital is the most important element of politics. By capital I don't just mean money, but brains and culture. You can't keep capital out of politics except by brute force. Rockefeller was vice-president in America."
The perception of power is crucial, he says, to an unsophisticated Russian electorate.
"After what's happened to them, Russian people don't believe in much," he says. "They just follow power. In order to preserve democracy in 1996 we had to prove to them that Yeltsin was stronger.
When the oligarchs demonstrated their power, the undecided 20 per cent of the population who were afraid of the communists saw that maybe power lay with Yeltsin. That is what they [the oligarchs] must do now."
Simon Bell is writing a book on Russia's oligarchs