Talk:Boris Berezovsky (businessman)/new

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Business Career

Accumulation of Wealth in Russia

In 1989 Berezovsky took advantage of the opportunities presented by perestroika to found LogoVAZ with Badri Patarkatsishvili and senior managers from AvtoVAZ. LogoVAZ developed software for AvtoVAZ, sold Soviet-made cars and serviced foreign cars. In the early 1990s LogoVaz achieved huge profits by taking advantage of the chaos of collapsing planned economy:the cars were purchased at the government-subsidized export price and then "re-exported" to be sold at a much higher price on domestic market. The dealership also profited from hyperinflation by taking cars on consignment and paying the producer at a later date when the money lost much of its value.

One of Berezovsky’s early endeavours was AVVA (All-Russia Automobile Aliance), a venture fund which he formed in 1993 with Alexander Voloshin (Yeltsin’s future Chief of Staff) and AvtoVAZ Chairman Vladimir Kadannikov. Berezovsky controlled about 30% of the company, which raised nearly $50 million from small investors through a bonded loan to build a plant producing a "people's car". The project did not collect sufficient funds for the plant and the funds were instead invested into AvtoVAZ production, while the debt to investors was swapped for equity. By 2000 AVVA held about one-third of AvtoVAZ.

In 1994 Berezovsky was the target of the first ever car bombing incident in Russia, but survived the assassination attempt, in which his driver was killed and he was injured. Alexander Litvinenko led the FSB investigation into the incident and linked the crime to the resistance of the Soviet-era AvtoVaz management to Berezovsky's growing influence in the Russian automobile market.

Berezovsky's involvement in the Russian media began in December 1994, when he played a crucial role in the creation of ORT Television (see Channel One (Russia)) to replace the failing Soviet Channel 1. He appointed the popular anchorman and producer Vladislav Listyev as CEO of ORT. Three months later Listyev was assassinated amid a fierce struggle for control of advertising sales. Berezovsky was questioned in the police investigation, among many others, but the killers were never found. Under Berezovsky's stewardship, ORT became a major asset of the reformist camp as they prepared to face Communists and nationalists in the upcoming presidential elections.

Between 1995 and 1997, through the controversial loans-for-shares privatisation auctions (see Privatisation in Russia), Berezovsky together with Patarkatsishvili and Roman Abramovich acquired control of Sibneft, the sixth-largest Russian oil company, which constituted the bulk of his wealth. In a 2000 article in Washington Post Berezovsky revealed that American financier George Soros declined an invitation to participate in the acquisition.

In 1995 he played a key role in a management reshuffle at Aeroflot and participated in its corporatization. In January 1998 it was announced that Sibneft would merge with Mikhail Khodorkovsky's Yukos to create the third-largest oil company in the world. The merger was abandoned five months later amid falling oil prices.

Berezovsky's control of the Russian media increased with with his acquisition of the Kommersant publishing house in 1999.

Divestment under Pressure

In April 1999 Russia's Prosecutor General opened an investigation into embezzlement at Aeroflot and issued an arrest warrant for Berezovsky, who called the investigation politically motivated and orchestrated by Prime-minister Yevgeny Primakov. The warrant was dropped a week later, after Berezovsky submitted to questioning by the prosecutors. No charges were brought.

In September 2000, six months after Vladimir Putin became president, Berezovsky alleged that the Kremlin had attempted to expropriate his shares in ORT and announced that he would put his stake into a trust to be controlled by prominent intellectuals.In October 2000, Russian prosecutors revived the Aeroflot fraud investigation and Berezovsky was questioned as a witness. On November 7 2000 Berezovsky failed to appear for further questioning about Aeroflot and announced that he would not return to Russia. On the same day his associate Nikolai Glushkov was arrested in Moscow and Berezovsky dropped the proposal to put ORT stake in trust.

2001 was the year of systematic takeover by the government of privately-owned television networks, in the course of which Berezovsky, Gusinski and Patarkatsishvily lost most of their media holdings , prompting one of them to warn of Russia "turning into a banana republic" in a letter to the New York Times . In February Berezovsky and Patarkatsishvili sold their stake in ORT to Roman Abramovich, who promptly ceded editorial control to the Kremlin. Berezovsky later claimed that there was a secret understanding that Nikolai Glushkov would be released from prison as part of that deal, a promise that was never fulfilled. In April, the government took control of Vladimir Gusinsky's NTV. Berezovsky then moved to acquire a controlling stake in a smaller network, TV-6, made Patarkatsishvili its Chairman, and offered employment to hundreds of locked out NTV journalists . Almost immediately, Patarkatshishvily became a target of police investigation and fled the country. In January 2002 a Russian arbitration court forced TV-6 (Russia) into liquidation. The liquidation of TV-6 was precipitated by LUKoil, a partly state-owned minority shareholder, using a piece of legislation that was almost immediately repealed.

In 2001 Berezovsky and Patarkatsishvili sold their stake in Sibneft to Roman Abramovich for $ 1.3 billion. This transaction is the subject of a dispute in the UK commercial courts, with Berezovsky alleging that he had been put under pressure to sell his stake to Abramovich at a fraction of the true value.

In 2006 Berezovsky sold Kommersant and his remaining Russian assets.

In a postscript to Berezovsky's business history, his past ownership of Sibneft - which contributed to the bulk of his fortune - was put into question by Roman Abramovich who in a statement to the High Court in London asserted that Berezovsky had never owned shares in Sibneft, and that $ 1.3 billion paid in 2001 ostensibly for his stake in the company was actually in recognition of Berezovsky’s “political assistance and protection” during the creation of Sibneft in 1995.. The case will be heard in October 2011. The Daily Mail reported that Berezovsky only succeeded in serving a writ on Abramovich when both men happened to be shopping on Sloane Street, with Berezovsky dashing from Dolce and Gabbana to confront Abramovich in Hermes.

Convictions in Absentia and Investigations Abroad

After Berezovsky gained political asylum in Britain, Russian authorities vigorously pursued various criminal charges agaist him. This culminated in two trials in absentia. The Moscow trial in November 2007 found him guilty of embezzling nearly 215m roubles (£4.3m) from Aeroflot.The court said that in the 1990ies Berezovsky was a member of an "organised criminal group" that stole the airline's foreign currency earnings. From London, Berezovsky called the tial, which sentenced him to six years in prison, 'a farce'. In June 2009, the Krasnogorsk City Court near Moscow sentenced Berezovsky to thirteen years imprisonment for defrauding AvtoVAZ for 58 million rubles ($1.9 million) in the 1990s. Berezovsky was represented by a court-appointed lawyer.

In spite of Berezovsky's successes in Britain in fighting off extradition requests and exposing Russian court convictions as politically motivated (see below), some other jurisdictions cooperated with Russian authorities in ceizing his property and targeting his financial transactions as money laundering. Berezovsky succeded in overturning some of these actions. In July 2007, Brazilian prosecutors issued an arrest warrant for Berezovsky in connection with his investment in the Brazilian football club Corinthians. However, a year later the Brazilian Supreme Court cancelled the order and stopped the investigation . On Russian requests, French authorities have raided his villa in Nice in search of documents , and ceized his two yachts parked at the French Riviera . However, some months later, the boats were released by a French court Swiss prosecutors have been assissting their Russian colleagues for years in investigating Berezovsky's finances .

Political Career in Russia

His Political Credo

Berezovsky's political philosophy was laid out in a 2000 article in Washington Post, in which he proclaimed the right of "oligarchs" to interfere in the nation's politics: "Our critics should not forget that a strong civil society and the middle class that serve to protect democratic liberties in the West do not exist in Russia. What we have are communists - still too powerful - and ex-KGB people who hate democracy and dream of regaining lost positions. The only counterbalance to them is the new class of capitalists, who, under extraordinary circumstances, find it acceptable - indeed, necessary - to interfere directly in the political process". His opponent on the global scene was George Soros, who compared Russian oligarchs with the American Robber Barons of late 19th century and blamed them for the failure of reforms in Russia

Role in Yeltsin's 1996 Reelection

Berezovsky entered the Kremlin’s inner circle in 1993 through acquaintance with Alexander Korzhakov, head of Yeltsin's bodyguard. He arranged for publication of Yeltsin's memoirs and befriended Valentin Yumashev, the President's ghost-writer.

In January 1996, at the World Economic Forum at Davos, Berezovsky persuaded fellow oligarchs to form an alliance - which later became known as "Davos Pact" - to bankroll Boris Yeltsin's campaign in the upcoming presidential elections. Upon return to Moscow, Berezovsky met and befriended Tatyana Dyachenko, Yeltsin's daughter, who arranged the oligarchs' first meeting with the president. According to a later profile by Guardian, "Berezovsky masterminded the 1996 re-election of Boris Yeltsin... He and his billionaire friends coughed up £140m for Yeltsin's campaign".

By the Summer of 1996, Berezovsky emerged as a key advisor to Yeltsin, allied with Anatoly Chubais, opposing a group of hardliners led by Gen. Alexander Korzhakov.. One night in June, in the drawing room of Club Logovaz, Berezovsky, Chubais and others plotted the ouster of Korzhakov and other hardliners. On June 20, 1996 Yeltsin fired Korzhakov and two other hawks leaving the reformers' team in full control of the Kremlin.

On June 16, 1996 Yeltsin came first in the first round of elections, after forging a tactical alliance with Gen. Alexander Lebed, who finished third. On July 3, in the runoff vote, he beat the Communist Gennady Zyuganov. His victory was due largely to the support of the TV networks controlled by Gusinsky and Berezovsky (NTV and ORT) and the money from the business elite. The New York Times called Berezovsky the "public spokesman and chief lobbyist for this new elite, which moved from the shadows to respectability in a few short years".

Role in Chechen Conflict

On October 17, 1996 Yeltsin dismissed Gen. Alexander Lebed from the position of National Security Advisor amid allegations that he was plotting a coup and secretly mustering a private army. Lebed promptly accused Berezovsky and Gusinsky of engineering his ouster, and went into a coalition with the disgraced Gen. Alexander Korzhakov. The dismissal of Lebed, the architect of the Khasavyurt peace accord , left Yeltsin’s Chechen policy in limbo. On October 30, 1996, in a political bombshell, Yeltsin named Ivan Rybkin as his new National Security Advisor and appointed Berezovsky Deputy Secretary in charge of Chechnya with the mandate to oversee the implementation of Khasavyurt Accord: that is, the withdrawal of Russian forces, negotiation of peace treaty and preparation of general elections. On December 19, 1996. Berezovsky made headlines by negotiating the release of 21 Russian policeman held hostage by the warlord Salman Raduev amid efforts by radicals from both sides to torpedo peace negotiations.

On May 12, 1997 Yeltsin and Maskhadov signed Russian–Chechen Peace Treaty in the Kremlin. Speaking at a press conference in Moscow Berezovsky outlined his priorities on economic reconstruction of Chechnya, particularly the lauhch of a pipeline for transporting Azerbaidjani oil. He called upon Russian buisiness community to contribute to the rebuilding of the republic revealing his own donation of $ 1 million (some sources mention $2 million) for the cement factory in Grozny. This payment would come to haunt him years later, when he will be accused of funding Chechen terrorists.

Berezovsky’s term the Security Council ended on November 5, 1997 when Yeltsin abruptly dismissed him amid fierce political fighting between the "oligarch" and the Young Reformer wings of his entourage(see below). Berezovsky vowed to continue his activities in Chechnya as a private individual.

After his dismissal, Berezovsky maintained contact with Chechen warlords, and was instrumental in the release of 69 hostages, including two Britons, Jon James and Camilla Carr whom he flew in his private jet to the RAF Brize Norton in September 1998.In a 2005 interview with Thomas de Waal, he revealed that at the request of British Ambassador Sir Andrew Wood he approached his former negotiations counterpart, the leader of islamic militants Movladi Udugov who helped arrange the Britions' release.

In connection with his role in hostage releases Berezovsky has been accused of paying ransoms and aiding terrorists, a charge that he denied at the time.. Years later, he tacitly admitted to Alex Goldfarb that the money was paid with the blessing of Russian authorities: "Deputy [police] Minister Rushailo asked me to continue working with him on hostages, because I had the reputation of someone whom the Chechens could trust. I have no regrets about it, we saved at least 50 people, who otherwise would have been killed; most of them were simple soldiers. And believe me, all of this was strictly official, with the full knowledge and consent of the Kremlin".

Perhaps the most controversial and least understood episode of Berezovsky's doings in Chechnya was his phone conversation with Movladi Udugov in the Summer of 1999, six months before the beginning of fighting in Dagestan. A transcript of that conversation was leaked to a Moscow tabloid on September 10, 1999 and appear to mention the would-be militants’ invasion. It has been subject of much speculation ever since. As Berezovsky explained later in interviews to de Waal and Goldfarb, Udugov proposed to coordinate the islamists' incursion into Dagestan with Russia, so that a limited Russian response would topple the Chechen president Aslan Maskhadov and establish a new Islamic republic, which would be anti-American but friendly to Russia. Berezovsky said that he disliked the idea but reported Udugov's ouverture to prime-minister Stepashin. "Udugov and Basayev," he asserted, "conspired with Stepashin and Putin to provoke a war to topple Maskhadov ... but the agreement was for the Russian army to stop at the Terek River. However, Putin double-crossed the Chechens and started an all-out war."

Battle with 'Young Reformers"

In March 1997 Berezovsky and Tatyana Dyachenko flew to Nizhniy Novgorod to persuade Governor Boris Nemtsov to join Chubais' economic team, which became known as the government of Young Reformers. This was the last concerted political step of the oligarchs of “Davos Pact”. Four month later the group split into two cliques fiercely competing for the attention of the president. The clash was precipitated by privatization auction of the communication utility Svyazinvest, in which Onexim bank of Chubais’ loyalist Vladimir Potanin, backed by George Soros competed with Gusinsky, allied with Spanish Telefónica. The initially commercial dispute quickly developed into a contest of political wills between Chubais and Berezovsky. Potanin's victory unleashed a bitter media war, in which ORT and NTV accused the Chubais group of fixing the auction in favor of Potanin, whereas Chubais charged Berezovsky with abusing his government position to advance his business interests. Both sides appealed to Yeltsin, who had proclaimed a new era of "fair" privatization "based on strict legislative rules and allowing no deviations." . In the end, both sides lost. Berezovsky's media revealed a corrupt scheme whereby a publishing house owned by Onexim Bank paid Chubais and his group hefty advances for a book that was never written. The scandal led to a purge of Chubais' loyalists from the government. Chubais retaliated by persuading Yeltsin to dismiss Boris Berezovsky from the national security council. Soros called the Berezovsky-Chubais clash a "historical event, in the reality of which I would have never believed, if I had not watched it myself. I saw a fight of the people in the boat floating towards the edge of a waterfall". He argued that the reformers camp could never recover from the wounds sustained in this struggle, setting the political stage for conservative nationalists, and eventually Vladimir Putin.

The Kremlin Family

In the Spring of 1998, Berezovsky emerged in the center of a new informal power group - "Family", a closely knit circle of advisors around Yeltsin, which included Yeltsin's daughter Tatyana and Chief of staff Yumashev. It was rumored that no important government appointments could happen without Family's support

Berezovsky and Putin

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Activities Abroad

Involvement in Litvinenko Case

Alexander Litvinenko, one of Berezovsky's closest associates, was murdered in London in November 2006 with a rare radioactive poison, Polonium 210. The British authorities have charged a former FSB officer and head of security at ORT Andrey Lugovoy with the murder and requested his extradition, which Russia refused. Several Russian diplomats were expelled from UK over this case. The UK government has not publicly expressed a view on the matter, but allegations that the murder was sponsored by the Russian state have been expressed by "sources in the UK government", according to the BBC, and by officials of the US Department of State, as revealed by Wikileaks; they were reflected in a 2008 resolution by the US Congress. An alternative theory - that the murder was orchestrated by Berezovsky with the aim of "framing" the Russian government and discrediting it on the global stage - has been aired in the Russian state-controlled media, by Lugovoy, and Russian officials. Berezovsky won a UK libel suit against Russian State Television over these allegations in 2010 (see below), following which he commented, "I trust the conclusions of the British investigators that the trail leads to Russia and I hope that one day justice will prevail."

Libel Suits in London

In 1996 Forbes, an American business magazine, published an article by Paul Klebnikov entitled 'Godfather of the Kremlin?' with the kicker 'Power. Politics. Murder. Boris Berezovsky could teach the guys in Sicily a thing or two.' The article, which Klebnikov subsequently expanded into a book (see below), fulfilled the promise of these phrases by linking Berezovsky to corruption in the car industry, to the Chechen mafia, and to the murder of Vladislav Listyev. The decision of Berezovsky and Nikolai Glushkov to sue for libel in London raised questions about the jurisdiction of the UK courts, but the case slowly proceeded until the claimants opted to settle when Forbes offered a retraction. The following statement appended to the article on the Forbes website summarises: 'On 6 March, 2003 the resolution of the case was announced in the High Court in London. FORBES stated in open court that (1) it was not the magazine's intention to state that Berezovsky was responsible for the murder of Listiev, only that he had been included in an inconclusive police investigation of the crime; (2) there is no evidence that Berezovsky was responsible for this or any other murder; (3) in light of the English court's ruling, it was wrong to characterize Berezovsky as a mafia boss; and (4) the magazine erred in stating that Glouchkov had been convicted for theft of state property in 1982.

In 2006 a UK court awarded Berezovsky £50,000 in libel damages against the Russian private bank Alfa Bank and its Chairman, Mikhail Fridman. Fridman had claimed on a Russian television programme that could be watched in the UK that Berezovsky had threatened him when the two men were competitors for control of the Kommersant publishing house, and that making threats was Berezovsky's usual way of conducting business. The jury rejected the defendants' claim that Fridman's allegations were true.

In June 2006 the Guardian apologised to Berezovsky over an article published on 2005 about the Russian prosecutor's attempt to have him extradited to face fraud charges in Russia. The article described Berezovsky as a "wanted defrauder of the Russian region of Samara". In a statement read out in open court, the Guardian accepted that Berezovsky's grant of political asylum in 2003 meant that the British government had concluded that there were no "serious reasons for considering that he has committed a serious non-political crime" in Russia. The Guardian accepted that its description of Berezovsky was unjustified and apologised for its error. Berezovsky accepted the apology and withdrew his libel suit.

In March 2010 Berezovsky, represented by Desmond Browne QC, won a libel case and was awarded £150,000 damages by the UK High Court over allegations that he had been behind the murder of Alexander Litvinenko. The allegations had been broadcast by the Russian state channel RTR Planeta in April 2007 on its programme Vesti Nedeli, which could be viewed from the UK. In his judgement Mr Justice Eady stated: "I can say unequivocally that there is no evidence before me that Mr Berezovsky had any part in the murder of Mr Litvinenko. Nor, for that matter, do I see any basis for reasonable grounds to suspect him of it." Berezovsky had sued both the channel and a man called Vladimir Terluk, whom Mr Justice Eady agreed was the man who had been interviewed in silhouette by the programme under the pseudonym 'Pyotr'. Terluk had claimed that to further his UK asylum application Berezovsky had approached him to fabricate a murder plot against himself, and that Litvinenko knew of this. Mr Justice Eady accepted that Terluk had not himself alleged Berezovsky's involvement in the murder of Litvinenko, but considered that his own allegations were themselves serious and that that there was no truth in any of them. As RTR did not participate in the proceedings, Terluk was left to defend the case himself, receiving significant assistance (as the judge noted) from the Russian prosecutor's office. The Guardian described the case as 'almost anarchic at times as officials from the Russian prosecutors' office repeatedly intervened despite not being party to proceedings. So obvious was their intention that when one of their mobile phones went off in court one day, Browne quipped: "That must be Mr Putin on the line."

Writings by him

Aside from his academic publications, Berezovsky has frequently authored articles and given interviews; these are collected in The Art of the Impossible (3 vols.). He has continued to contribute articles while in exile, taking a highly critical view of Russia's political leaders.

Berezovsky about himself on TV

http://www.charlierose.com/view/interview/3505

Major writings and works of art about him

Berezovsky features in a painting by the popular Russian artist Ilya Glazunov displayed in Moscow's Ilya Glazunov Gallery. According to the Rough Guide, 'The Market of Our Democracy...shows Yeltsin waving a conductor's baton as two lesbians kiss and the oligarch Berezovsky flaunts a sign reading "I will buy Russia", while charlatans rob a crowd of refugees and starving children.' In 1996 the Russian-American journalist Paul Klebnikov wrote a highly critical article on Berezovsky and the state of Russia more generally, in response to which Berezovsky sued Forbes in the UK (see above); in 2001 he expanded his article into a book entitled Godfather of the Kremlin, alternatively subtitled The Decline of Russia in the Age of Gangster Capitalism and Boris Berezovsky and the looting of Russia. When Klebnikov was murdered in 2004 obituaries praised his dedicated journalism but noted concerns about a strain of anti-semitism in his reporting of prominent Jewish figures such as Berezovsky. Comparing Yuli Dubov's fictionalised treatment of Berezovsky, The Big Slice, with Godfather of the Kremlin Anna Isakova judged that, 'In Klebnikov's book, Berezovsky is depicted as a leech that depleted the homeland of all its riches. He represents absolute evil and is the primary enemy of the people. The facts are no different from those in Dubov's book; the only difference is their interpretation. Klebnikov sees malicious damage in Berezovsky's every action. Although Klebnikov assiduously avoids the word "Jew," an aroma of old, almost religious, anti-Semitism emerges from each page in the book.' Dubov, whose book provided the basis for a film (see Tycoon (2002 film)), was a close business associate of Berezovsky who also fled to London and successfully fought extradition to Russia. Alex Goldfarb, a microbiologist and activist who became acquainted with Berezovsky in the 1990s and has subsequently worked for him, provides snapshots of Berezovsky at crucial moments as background to his 2007 account of the Litvinenko murder case, co-written with Marina Litvinenko, Death of a Dissident: the poisoning of Alexander Litvinenko and the return of the KGB. Reviews tended to combine comment on Goldfarb's partisan status with gratitude for his insider account: 'The real value of Death of a Dissident is to explain the background to the titanic struggle that has pitted Berezovsky against the Russian president since they fell out, after the tycoon helped secure the presidency for Putin in 2000. Goldfarb, a former Soviet dissident, is a man with an agenda. He read out the deathbed statement of Litvinenko, accusing Putin of responsibility for his murder.' A less contentious book is The Oligarchs: wealth and Power in the new Russia by David Hoffman of the Washington Post, which provides a comparative treatment of Berezovsky and several of his fellow so-called business oligarchs.. A documentary about Berezovsky's efforts to undermine Putin from his exile in UK was shown on BBC in December 2005