Who said the filthy rich are good for
nothing? Their antics are very entertaining! The
Nouveau Riche have always been notorious
headline-providers, and the newest crop of Russian
oligarchs make the robber barons of previous generations
look timid and colorless. As money ages, it becomes
anaemic; divided and subdivided by careful lawyers into
a maze of corporate entities. New money is still good
fun; they pull their stunts right in public, and they
don’t pull their punches. These hometown heroes fill the
vacuum left by the maharajas and sheiks in a way that
our drab bureaucrats never could; they parade their
Humvee Jeeps through the Moscow crouds, as sure and
proud as the Indian kings who once rode their battle
elephants in the jungle.
They are more powerful and less
restrained in their choice of action than ever were
Scorsese’s Mafia dons. Brutal, unscrupulous, overriding,
often overreaching, these are characters made for a
Shakespearean drama. They are lawless; they
freely trample upon other people until somebody finally
tramples upon them. They are
full-bloodied villains or generous benefactors, or both.
Their habit of using London as their litigation
headquarters has given their other habits an
international audience.
Recently two mighty tycoons,
Berezovsky and Abramovich, jousted in a London court for
the prize of billions -- and incidentally disclosed how
they stripped the Russian public of its most valuable
assets during Yeltsin’s privatization regime. These
courtroom warriors do not flinch at revealing their base
crimes to achieve victory; in this case another
Neoliberal myth has been destroyed, and another dark
chapter in Russian history has been illuminated.
The looting of a country is heavy
fare; the public hungered for some light farce. The Polonsky vs. Lebedev case came to the fore,
publicized internationally via the London court system.
This is the hilarious story of a media mogul and a real
estate baron who go full smackdown on live TV. Only the
mighty pen of Nikolai Gogol, the mid-19th
century Russian author of
The Squabble (You can read the plot
here) could have done it justice; he might have
called it Why Alexander Lebedevich Punched Sergei
Polonovich, but you’ll have to bear with my humble
efforts.
BelleNews gives us a blow by blow description of the
live smackdown action:
In front of an astonished studio
audience, Alexander Lebedev (the Russian
mogul) rains a series of blows onto the head of
SergeiPolonsky (the real-estate baron),
knocking him off his chair. This is during a TV
debate on the global economic crisis.
Images of the dramatic scene,
which have been posted on YouTube, show Lebedev
losing control and standing over Polonsky in
a threatening manner.
Polonsky
appears to attempt to calm him down and Lebedev
takes his seat once more.
After few seconds, without
warning, as Polonsky gently pats him on the
arm, Lebedev again decides it’s time to let
his fists do the talking.
Lebedev
suddenly hits Polonsky several times on the
side of the head, sending him sprawling to the
floor.
Polonsky
stands back up, seemingly unharmed, and the two men
stare hard at each other as studio flunkies defuse
the situation.
Note: Alexander Lebedev is
one of the richest men in the world, with a fortune
that’s estimated to be in the region of $3.1 billion.
In fact, Polonsky and
Lebedev are two mid-sized Russian tycoons; neither
of them could buy Minnesota cash on the nail. They could
have become great pals, toasting each other’s successes
in turn; for both are given to real
estate development, both love swimming, both wear casual
more often than formal, both are rather vain, and both
are facing a sharp decline in their fortunes. But
instead they have come to blows, for they are doomed to
be opposing characters. Which is the protagonist and
which the antagonist? None.
Sergei
Polonsky is forty, a young
man as tycoons go, the first post-Soviet generation of
Russian businessmen. He is still big and broad like the
Blue Beret commando he once was, but years of soft
living have robbed him of his waist; now he looks more
like a jolly, well-fed dolphin. His lady friend is a
prominent businesswoman by her own right, and a swimming
champion.
Alexander
Lebedev is 12 years older;
his was the generation that privatised the USSR. He is a
shape-shifter; he has modernized his appearance over the
years from a hard-muscled, disciplined,
business-suit-wearing ex-KGB-man into a metrosexual
guitar player with an alluring haircut, light shirts and
blue jeans. He traded in his old Soviet-era wife for a
newer, more camera-friendly model.
Lebedev
lives in downtown Moscow, in a former Scout Youth Club
built in glorious Stalinesque imperial style with
columns and portico, and transformed – after its
privatisation – into a minor manor, with an Olympic-size
swimming pool where he spends much of his time. He
escapes the Moscow autumnal gloom at his Cote d’Azure
villa and in his London mansion.
Polonsky
lives in a futuristic penthouse, perched like a ship’s
bridge atop a skyscraper with a 360°
view, high above Moscow. He designed and built the
skyscraper and his own apartment himself, being an
architect by education and profession. He spends his
weekends floating in a converted barge, moored just
beyond the city limits, in the company of a tame racoon,
doing chi kung – Chinese meditation
practice - and voraciously reading
arbitrarily-chosen books. In winter he drives a slim,
high-tech sled pulled by snow-white blue-eyed huskies;
in summer he glides through the deeps on a sea-bob, or
hang-glides over blissful hills.
Lebedev
built a resort in Crimea; he lavished his generosity on
the city, restoring the historic Chekhov theatre,
but he prefers to spend his time in London, hobnobbing
with Harry Potter’s creator, Ms Rowling, Sir Elton John
and other worthies. He plays guitar, and supports DDT,
a Russian rock group. He also owns a quality British
newspaper, The Independent, as well as a tabloid,
the Evening Standard, and the Russian Novaya
Gazeta.
Polonsky,
in contrast, has built himself a fortress of solitude, a
stone and glass castle rising from the waves of a lonely
island off the shores of Sihanoukville, not far from
Alain Delon’s home in remote Cambodia. He meets with
Sufi teachers, receives instructions from Zen monks and
chi gung
adepts. He is into esoteric knowledge and mystic
experiences.
The two men are from very different
cities and backgrounds.
Lebedev grew up a child of privilege; his
father was a professor of the prestigious Foreign
Service School. As a young man he joined the KGB and the
Communist Party. He graduated from his father’s school,
proceeded into the KGB college, and then entered the
diplomatic service. He was stationed at the Soviet
Embassy in Kensington, London; his assignment: stop the
money fleeing Russia. In eight years he learned the
ropes, and with the fall of the USSR the gamekeeper
turned poacher.
Lt.-Col. (KGB)
Lebedev left the service
in 1992 and used his professional insider knowledge of
Soviet debts to make a fortune and direct fleeing money
to safe havens. Not many Russians knew the banking
system like he did. There was a lot of money that could
be made by a person with the right connections: he
bought cut-rate loans cheap and cashed them in at full
value with a friendly Treasury official. He made a deal
with Gazprom that made the Russian state two hundred
millions poorer and himself and his collaborators that
much richer. He befriended Victor Chernomyrdin, then
Prime Minister, and Chernomyrdin channelled state funds
into Lebedev’s recently-opened bank. Lebedev used his
connections to capture positions in state-sponsored
companies like Ilyushin and Aeroflot: the
profits went to Lebedev, while the expenses went to the
state.
Polonsky
hailed from St Petersburg, of humble origin. He grew up
as the USSR collapsed around him; he studied
architecture, went into construction and building, hired
Ukrainian builders while they were still inexpensive,
and built himself into a real estate developer. He is
proud of being a self-made man; he obtained nothing from
the state, and never sought anything, he says. He did
not privatise government factories, but instead
established good connections with City Hall and catered
to newly-prosperous Muscovites. He looks honest enough
to buy a used car from, though such trustworthy guys do
not become billionaires. People in the know say that he
had to cut backroom deals with Mme Baturina, wife of the
Moscow Mayor and one of the richest women in the world:
no building was erected in Moscow without a nod from
her.
Polonsky
has tried to avoid politics; he professes a lack of
knowledge and interest in things political. He is a
builder, he says, no more. He puts his soul into huge
projects spreading from Moscow to Switzerland and from
London to Croatia. He is democratic in the Russian
style: he mixes easily with all kinds of ordinary folks,
but they’d better follow his orders or else. He
is a petty tyrant, his (dismissed) employees say: he
forbids texting during board meetings! Violators have
their precious iPhones smashed against the wall (a feat
I myself have only dreamed of). His ambitions lie in the
spiritual sphere, and business often takes a back seat
to his search for God.
Lebedev
has a penchant for politics. He has tried on for size
several political factions, varying from the
ultra-nationalist Rodina (“Motherland”) to the
socialist SR and to the ruling ER, being
torn between political ambitions and the desire to make
a fast buck. Sometimes the two go together.
In 1996, in the run-up to the fateful
elections, Lebedev supported Boris Yeltsin, the
then-president of Russia, a dissipated alcoholic who
embezzled Russian national wealth and enriched the
oligarchs. Lebedev’s bank was used by Yeltsin’s Treasury
in order to channel state funds into piles of greenbacks
all wrapped up for bribes. It was some of Lebedev’s cash
that was seized by security in the infamous Case
of the Xerox Paper Box, when an activist tried
to carry out millions of dollars for Yeltsin’s bribe
fund in a cardboard box. Lebedev did not shy away from
this deed; he was rather proud of it, and even paid the
dirt-digging magazine Kompromat (“Compromising
Matters”) to produce a special issue containing a
sanitised version of this, and other exploits.
Lebedev’s
daring misdeeds inevitably attracted the attention of
law enforcement, and a case against him was eventually
drawn up by the State Attorney General. Lebedev, by his
own boast, set the Attorney General up with two
easy-going girls in a sauna, and filmed the frolics. The
film has been broadcasted on a fellow oligarch’s private
NTV channel and the Attorney General abruptly resigned.
Some people say that Lebedev was not responsible for the
setup. If true, this speaks volumes. Might Mr. Lebedev
think that bad publicity is much better than no
publicity at all? The facts support the theory. Lebedev
produced a book ominously entitled 666 or The
Beast Is Born, full of prosaic smackdowns targeting
nearly every public personality in Russia. He humbly
refers to himself as the “ideal capitalist” and claims
credit for these and other dashing criminal exploits.
Lebedev is always
quick with an explanation as to why each crime was a
good deed: it was either to save Russia from the
clutches of the commies (he conveniently misplaces his
own Party credentials), or to save the world from the
KGB (again he is silent about his own history in the
very same service). He openly despises Putin’s working
class roots and rise to power. It galls him that they
once had the same rank in the KGB. But the real reason
behind Lebedev’s opposition is that Putin fearlessly
prosecutes the oligarchs. Or is it “persecutes”?
Oligarchs have a persecution complex:
any and all interference is unjust. They think of
themselves as omnipotent, though they are only powerful,
and they bristle against even the most minor efforts to
curtail their power. Their money buys them power over
life and death, but this power saps their mental health.
They start to believe the hype offered by sycophants.
They begin to reject trusted advisors. They end up alone
and unhinged, pursued by the law. Too much power
corrupts, and the Russian oligarchs have more power than
any of Stalin’s satraps ever had.
Mr Putin does not approve of
oligarchs meddling in politics. He does not punish them
arbitrarily, nor does he rewrite the laws to target
them. Putin’s Russia allows these tycoons to get away
with many things, but it does draw the line at crime -
sometimes. This is Putin’s great sacrilege; he holds the
oligarchs accountable to the letter of the law. This
level of independence comes as a great shock to them.
They are getting whiplash trying to readjust after the
total freedom of lapdog Yeltsin’s day. The oligarchs
wistfully recall the days when they employed their
powers over life and death with impunity, like viceroys
of India in Clive’s time.
Alas, Mr Lebedev’s political
ambitions have remained unfulfilled. He reduced his
lofty goals to something more achievable, and decided to
become the Mayor of Moscow. He failed. Worried now, he
set his sights upon becoming the Mayor of Sochi (the
Miami of Russia). Again, he failed. The sharks, sensing
blood, began to circle. His dashing exploits belatedly
began to attract the attention of the law, especially
his alleged appropriation of $300 million in state
bailout funds meant to shore up his bank. He accepted
the money, but it soon became apparent that his bank’s
coffers were empty, or rather stuffed with fictitious
promissory notes. His dealings in the aircraft industry
also have come under scrutiny and it appears that the
state, the main shareholder, might have been swindled in
a major way.
In response, the canny Mr Lebedev
activated his long term insurance policy. If he were a
Russian Jew, he would have claimed he was being attacked
by authoritarian Russian anti-Semites; but Mr Lebedev is
not a Russian Jew. Instead, Mr Lebedev claims he is
being attacked by authoritarian KGB thugs like Mr
Putin. This insurance was effective but expensive:
for many years he had been forced to heavily subsidise
the anti-Putin newspaper Novaya Gazeta, widely
read in the central borough of Moscow and unheard of
elsewhere. To influence the international set, he
purchased two British newspapers and strenuously
promoted his new image as a sort of Khodorkovsky: just
another wealthy man victimized by Putin’s KGB thugs. He
claimed that he was poisoned like Litvinenko, but he
miraculously survived. The British were only too happy
to cooperate with Lebedev’s propaganda campaigns; the
establishment was (and is) willing to support any and
all anti-Putin elements, including the Chechen
separatists.
It was during his campaign for Moscow
Mayor, that Mr Lebedev
became aware of Mr Polonsky,
who happened to be on good terms with the incumbent
Mayor. At that time, Polonsky was busy erecting the
tallest twin skyscrapers in Europe, the Federation
Towers - the gem of Moscow City. Polonsky immediately
became the next target for Lebedev’s hate: another
low-caste self-made man, definitely not a pukka sahib.
It was also an opportune moment for a quick and easy
kill, because Polonsky’s star was falling fast.
Polonsky
had gotten himself into trouble, as do all the oligarchs
at one point or another. He was not thorough and he was
not prudent. He rejected his trusted advisors and
surrounded himself with yes-men. He believed his hunch
instead of counting odds. He jumped into multimillion
deals with a bow and a handshake, and his partners
walked away with chunks of his empire. His dreams of
samurai honour were shattered by modern Russian business
pragmatism.
He relied upon his assistants, and
they robbed him blind. The more he empowered them, the
faster they would vamoose with his money. His vast
capital (assessed at over three billion dollars at the
peak) began to shrink precipitously; cash flow became a
problem for him, he was over-extended and had difficulty
completing his most ambitious projects. Ordinary people
who invested in his projects had become justifiably
angry.
It was at this moment that the
cunning Lebedev
unveiled his ingenuous device to break Polonsky. The media
mogul spread a malicious (and apparently false) rumour
that the foundations of Federation Towers had cracked.
Polonsky was already on the defensive, now his back was
against the wall. He invited Moscow journalists to come
and look for themselves: they were allowed to roam
freely some forty yards below the surface, trying to
locate the crack, refusing to admit its absence. He
offered a million roubles to anyone who could find it.
Nobody found anything, but the rumour persisted,
supported by Mr Lebedev and his newspapers.
Alone and unhinged, Polonsky began to
claim that he himself invented the crack story in order
to promote public awareness of the project. There were
no buyers for this weird story. His projects continued
to suffer setbacks, raiders continued to seize his
developments, his companions continued to rob him blind.
The crack story cracked his empire.
This is the backstory to the
Oligarch Smackdown on live TV. It was ostensibly
going to be about global economics. They had exchanged
only a few words when Mr Polonsky brought up the painful
subject of the crack. The whole world awaited
Lebedev’s reply. He looked into the eyes of his victim.
What did Mr Lebedev feel at that moment? Pride? Hatred?
In any case, alone and unhinged, he rose and landed a
few well-aimed jabs upon Polonsky’s jaw. The sitting
ex-commando was knocked down, decisively proving the
superiority of KGB training over that of Airborne
Troopers. The programme was a global success; after
delighting the viewers, who had been prepared for a dry
recitation of global doom, it went on to become an
all-time favourite on YouTube.
But the story did not end there. In
face of millions who had watched the assault live,
Lebedev denied he hit Polonsky. Standing just outside of
the studio, Lebedev insisted stubbornly to the
journalists: “I did not touch him; Polonsky assaulted
me, because I am in opposition to Putin.” Yes, Lebedev
is amazing: he is one man who is prepared to deny
anything. Years ago, he had fought to ban gambling in St
Petersburg, an ostensibly noble purpose. When it came
out that his bank had heavily invested in the lotteries
(the main competitor to gaming machines), Lebedev denied
all motives of self-interest. Even after his own bank
manager proved beyond the shadow of a doubt that the
strategy was Lebedev’s own idea, he continued to deny
all knowledge with a straight face. I wonder if even
James Bond could equal this feat.
During the race for the Moscow City
Hall, Lebedev bought a newspaper (the Moscow
Correspondent) and turned it into a fighting
machine. They soon printed a scurrilous rumour that Mr
Putin was involved in an extra-marital affair. Lebedev
could not imagine that Putin would react as he did.
Usually quite complacent to rumours, accusations and
attacks, the President became furious. Fearing Putin’s
fury, Lebedev immediately shut down the newspaper, fired
the editor and said on air that the baseless article was
created by the current Mayor of Moscow and inserted by
the editor in return for a bribe. This brazen lie cost
the editor his career; Lebedev never recanted.
Since his televised assault, Lebedev
has been asked many times why he did it. Some of his
explanations are so off the wall that one has difficulty
believing he actually offered them as true statements.
The palm probably should go to “I thought that I would
become a popular hero because I struck out against that
hateful oligarch”. This is rich coming from him.
Polonsky seems genuinely at a loss to explain Lebedev’s
behaviour. Not only has Lebedev refused to apologise, he
is continuing to deny he even did it. Is he claiming the
insanity defence? More likely he is claiming his rights
of oligarchic power: the impunity defence.
Polonsky has not benefited from his
public humiliation; in fact, the story only further
injured his already suffering business reputation, and a
project he had planned to do in London collapsed soon
afterwards. It was for this reason that he brought civil
charges against Lebedev in a London court, and retired
to his Cambodian island, posting his daily catch of
barracudas on the Facebook.
Almost a year had passed before the
exceedingly slow-grinding mills of Russian criminal
justice charged Mr Lebedev, but eventually the media
baron was charged with "hooliganism" and "assault". His
lawyers claim that Lebedev had felt threatened and was
forced to defend himself; Lebedev (with a straight face)
claims that he is being persecuted by the bloody Putin
regime for his “love of freedom”. A bald-faced liar is
always more entertaining than a talented ingénue, so we
will not be too surprised if Mr Lebedev walks away with
a slap on the wrist. Anyway, the bloody Putin regime is
soft on the oligarchs. However, this Oligarch
Smackdown is far from over. We await Mr Lebedev’s
elevation to the voice of Russia’s conscience by
his own British hacks!
