The Oligarchs (84 page)

Putin seemed uneasy. He tried to change the subject. “You and I are on the same team,” he appealed to Dorenko.

Dorenko replied, “I am not on anyone's team.”

Gusinsky was formally charged with fraud and released late on Friday evening, June 16, on a pledge not to leave Moscow. A few days later, Gusinsky sat awkwardly in a chair on a pedestal for a live broadcast interview on
Glas Naroda
, questioned by his partner Kiselyov. Gusinsky was never an easy interview; his emotions seemed to creep up on him, and he would change his thoughts in midsentence. He was
surrounded by sympathetic journalists, and he appeared uneasy as the center of attention. But he was very clear and lucid about Putin. The Russian president, he said, knew everything about his arrest and imprisonment. “More than that,” he added, “the decision was taken personally by Mr. President.” The Kremlin, Gusinsky declared, had divided the tycoons into “friends” and “foes,” and he was one of the foes. Gusinsky also acknowledged that the oligarchs had given the Kremlin plenty of reason to think they could command the news media—the 1996 campaign for Yeltsin was the precedent. “A very big and grave mistake,” Gusinsky said. “It was in 1996 that we gave birth to a small monster.... Today the authorities are really using the instruments that we presented to them in 1996.”
⁴⁸

The next six weeks underscored that Putin was playing hardball. He wanted to break Gusinsky. The raids on Gusinsky's corporate headquarters, the charges of fraud, and the jail episode were just the beginning of the end. The Kremlin intensified the pressure in June and July. The point man behind the scenes was Mikhail Lesin, founder of the advertising agency Video International, who had been named press minister by Putin. Lesin once did a flourishing business with Gusinsky. His advertising agency had been the exclusive broker for airtime on NTV, and both men prospered in the mid-1990s. But Video International pulled up stakes and terminated the relationship in late 1999. Soon thereafter, Lesin joined the campaign against Gusinsky. A close associate of Lesin told me that Lesin harbored personal animosity toward Gusinsky, feeling that he had never shown him enough respect. Lesin had quite willingly thrown himself into the attack on Gusinsky and was joined by Kokh.
⁴⁹

A long, secret negotiation began between Gusinsky and his tormentors. Gusinsky was in a financially vulnerable position. In addition to the $211 million loan that Gazprom had guaranteed, the next loan, also guaranteed by Gazprom, of $262 million, was coming due in July 2001. The total debt of Gusinsky's company to Gazprom was $473 million. In the old days, Gusinsky could count on strong television revenues to carry the burden of debt service, but after the ruble crash, his financial situation was strained.

In the talks, the Kremlin's goal, working through Kokh and Lesin, was to wrest NTV away from Gusinsky, who was still facing criminal prosecution. Malashenko told me that Lesin presented Gusinsky with an ultimatum. If he sold the business to Gazprom, he could go free.
The deal offered was this: $300 million in cash for the whole of Gusinsky's empire, Media-Most and NTV, as well as forgiveness of the outstanding $473 million in debts. Gusinsky recalled that NTV alone had been valued at more than $1 billion overall when he was thinking of selling shares in New York before the crash—now they were offering him nickels and dimes for his company! Still, he felt pressured. He did not want to go back to jail and there were continuing raids against his companies. On July 7, investigators carted off more documents from NTV. Gusinsky later told me, “They said it more than once. There were constant threats to put me in jail cells with tubercular prisoners and people with AIDS.... I was indeed a hostage. When you have a gun to your head, you have two options: to meet the condition of the bandits or take a bullet in your head.”

On July 18 Gusinsky signed a written statement, secret at the time, witnessed by two of his lawyers. The statement said he was being forced against his will to sell his business, in exchange for a promise to drop the criminal charges and permission to go abroad. Gusinsky said Lesin, the press minister, was the one “forcing me to conclude this transaction.” Two days later, on July 20, again acting secretly, he signed the agreement to sell out for $300 million. A document attached to the sale called for the criminal charges against Gusinsky to be dropped.
⁵⁰
A few days later, Putin returned from a summit meeting at Okinawa, where he had been lavishly praised by leaders of the Western industrial democracies. On July 27 Russian prosecutors abruptly and without explanation announced they were dropping all charges against Gusinsky. The secret agreement to sell out was not mentioned. Gusinsky immediately boarded his private jet and flew out of Russia to visit his family in Spain. He did not come back again.

Over the next several weeks, negotiations were quietly held in London to iron out the deal. But in September, Gusinsky was having second thoughts, even though some of his partners and his wife urged him to take the $300 million. Gusinsky said he felt that NTV was like a home he had grown up in, and he feared Putin wanted to turn it into a “brothel.” He decided not to sell out and tore up the deal. It was another turning point for Gusinsky, where he might have avoided more trouble. But he was still feeling the drive and ambition of an oligarch—he would not let them push him around.

I met Gusinsky one rainy September afternoon in London. He was
defiant and energized. He wanted to resist the Kremlin and stand up for NTV, as he had successfully done under fire in 1995. His cellular telephone rang incessantly with calls from Moscow. His four top journalists and editors—Kiselyov, Sergei Parkhomenko of
Itogi
magazine, Mikhail Berger of the newspaper
Sevodnya
, and Alexei Venediktov of Echo of Moscow Radio—flew back and forth to London and Gusinsky's home in Spain for conferences. Malashenko went to Soros seeking help. Soros told Malashenko that he had found an investor willing to take the risks: CNN founder Ted Turner. But all the wrangling came to naught. Putin wanted Gusinsky out, and Putin was stronger. The prosecutor issued new warrants for Gusinsky's arrest through Interpol. Gusinsky was detained in Spain and twice jailed there, before the Spanish high court threw out the case, saying there was no evidence Gusinsky had committed a crime. Gusinsky's executives, including Malashenko, fled Russia, fearing they would be arrested. Kiselyov fought on. In the year of pressure tactics, there were more than thirty raids by the prosecutor and other law enforcement agencies against Gusinsky's businesses.

“There is nothing I can do,” Putin lamely told journalists from NTV on January 29 at a Kremlin meeting. This was just nonsense, and untrue. Putin was actually quite deeply involved in the case. He took Kiselyov aside on the day of the Kremlin meeting. “I know everything about your hours and hours of phone conversations with Gusinsky,” he said, revealing that he was reading transcripts of the wiretaps.

“So what, we have been partners since 1993!” Kiselyov protested.

“I know all the
instructions
you get from Gusinsky,” Putin said coldly.

Putin was the driving force behind the entire affair, and he, as well as his backroom boys, were intent on victory. Kiselyov told me there were two groups around Putin helping crush Gusinsky. One was the “grudge” group—Lesin and Kokh, who had their own reasons for taking revenge on the oligarch. The other were the security services, Putin's friends and power base. Ustinov, the general prosecutor, twice summoned Kiselyov for secret meetings at the headquarters of the prosecutor's office. To avoid detection, Kiselyov was brought into the building in central Moscow in an unmarked car through a backdoor. Kiselyov thought the meetings were strange, and Ustinov stilted, as if he were talking to hidden microphones. Ustinov wanted to know what it would take to resolve the crisis. Kiselyov demanded that charges against Gusinsky be dropped. The talks came to nothing.

Gusinsky finally lost control of the television station in April. Gazprom, in a hastily assembled board meeting, got control of 25 percent plus one share and moved to seize control over NTV. The old management was removed. Kokh appointed a new general director, Boris Jordan, the young hustler who had been Potanin's fast-talking partner in the Svyazinvest auction. Jordan had promised not to use force to take over the station, but at 4:00 A.M. on April 14 he arrived at NTV with his own security guards and assumed control. The arrival of Kokh and Jordan at NTV was met by hissing and moans from the staff. Kiselyov and many other journalists walked out. Gazprom also took control of
Sevodnya
, Gusinsky's first newspaper, and closed it. Then came the news magazine
Itogi
. The magazine's staff, arriving for work one morning, was ignominiously fired and locked out of their offices, including the founders, chief editor Parkhomenko, and his deputy, Masha Lipman.

The age of dreams was over.

 

For several years, Berezovsky had doggedly pursued his goal of maintaining the “continuity of power” after Yeltsin. He finally found his preferred successor to Yeltsin in Putin. With slavish coverage of ORT television, Berezovsky helped Putin get elected president for a four-year term on March 27, 2000. Once he had made the ultimate power play in delivering a new Russian president, I assumed Berezovsky would feel secure and powerful. I was wrong.

Little more than a year after Primakov had frightened Berezovsky, the oligarch was on the run again. Had Berezovsky misjudged Putin? Or did Putin toss him aside, no longer wanting a reminder that he too was a creation of Russia's most ambitious kingmaker? Just as Gusinsky was being ground down by the Kremlin, Putin and Berezovsky had their own falling out.

At first Berezovsky seemed to have little to worry about. He told me approvingly that Putin was loyal to his friends. To make the point, Berezovsky offered a personal anecdote. He said Putin, at some risk, had come to a birthday party for Berezovsky's wife at the Logovaz Club during the time of tension with Primakov the previous spring. Putin was then head of the Federal Security Service, and it could not have been easy to show up at Berezovsky's famous club. But Putin took the risk, Berezovsky boasted, to show that personal feelings of loyalty were above politics.

“I realize it would be very interesting for the public if Putin, after becoming the president, would jail Berezovsky,” the oligarch told me, referring to himself in the third person. We were sitting at the same large table at the Logovaz mansion where I had often talked with Berezovsky, although this time he seemed more serene than in the past. He took off his sport coat and savored red wine from a tall glass. “To be honest, I am not expecting this, neither tomorrow nor in the nearest future.” That was March 22, 2000.

But then came the unexpected. First, Putin and Berezovsky had a disagreement over Chechnya. Putin was vigorously prosecuting the war against Chechen separatists, while Berezovsky began calling for peace talks. Putin asked Berezovsky to cut off all ties with the Chechen warlords. Berezovsky said he agreed to Putin's request but told the new Russian president there was no military solution in Chechnya.

Next, Berezovsky grew alarmed at Putin's proposal for stronger Kremlin control over Russia's independent-minded regional governors. In a major power play, Putin announced a plan to impose seven new unelected supergovernors on the existing eighty-nine regional chiefs. Five of the seven Putin appointees were former KGB men or military men. Putin also sought legislation allowing him to fire governors. Berezovsky saw it as an autocratic move. He liked the idea of a loose collection of independent governors, even though he realized that the Russian Federation under Yeltsin had become a crazy-quilt mix of both strong and weak regional powers, and that governors often defied the Kremlin. Berezovsky also knew governors were extremely important in decisions about heavy industry—such as aluminum and automobiles—and he clearly did not relish the thought of all power in the country being controlled by the Kremlin. Berezovsky, for example, had tried to play power broker in more than one Russian region and had succeeded in getting the former general Alexander Lebed elected in Krasnoyarsk.

Berezovsky made an appeal to Putin that the Russian Federation should be loosened, perhaps even turned into a confederation of more autonomous, independent states. But Putin was not listening. Putin did exactly the opposite of what Berezovsky recommended. They had a long talk, Berezovsky recalled, and he realized that his fears about Putin's autocratic streak were well-founded. “He said he still believed that we had to build a liberal democratic state in Russia,” Berezovsky
said later, “but we had to do it by force, because people were not ready for it.” He added, “Putin believes everything has to be governed from above, so it is necessary to concentrate power, concentrate the mass media, and to rule business.”

Berezovsky wrote Putin a lengthy private letter, but the Russian president brushed him aside. On May 30 Berezovsky publicly broke with Putin for the first time and issued an open letter attacking him. I spoke to him on that steamy afternoon at the Logovaz mansion, where he seemed frazzled. The serenity I had noticed in March was gone. Berezovsky accused Putin of “demolishing some democratic institutions” in moves that would “cheat” Russia's voters of their elected local leaders and destroy the regional political elites. The criticism cannot have gone down very well with Putin. On July 17 Berezovsky surprised me again by resigning his seat in the State Duma, which he had held only six months. “I do not want to take part in this spectacle,” he told reporters, “I do not want to participate in Russia's collapse and the establishment of an authoritarian regime.”

When a nuclear-powered submarine, the
Kursk,
sank in August, taking with it the lives of all 118 on board, Putin reacted awkwardly. Television, including Berezovsky's ORT, showed the Russian president riding a jet ski in the Black Sea while vacationing at the southern Russian resort at Sochi. Putin seemed uninformed, hesitated to accept calls for international aid, and repeatedly lied about the fate of the sailors trapped in the submarine.