The Rise of the Oligarchs―A True Story of Ambition

Left me longing for more. Great starter to the concept of perestroika, Yeltsin's fade and the surreal rise of the oligarchs. A taste of Mother Russia and a glimpse of Putin's ruthless twist on omertà turn this tale into an indelible snapshot plotted at Polaroid® pace.

The author's writing style makes this a good page-turner. However it seems less than convincing that Putin was directly responsible for the Polonium poisoning of Letveinko in London. All in all, a fun read for those intrigued by the antics of the KGB/FSB and the emergence of the Oligarchs after the collapse of the Soviet Union.

Tragically true and shocking tale of Modern Russia, oligarchs, violence in the name of business and the arc of the lives of some of the wealthiest men in history. One of Mezrich's best efforts is a story I couldn't put down. Read it, devour it and (hopefully ) wait for the movie!

Coincidentally, we took a trip this summer to the Scandinavian countries including St Petersburg, Russia. The book gave us some insight into recent Russian history. How fascinating it is to observe how some people have so much and others have so little.

Ben Mezrich has invented a new Genre - History as a fast paced thriller! You are pulled through the twists and turns of true events as details of what otherwise be complex history are turned into an exciting tale of ambition, intrigue..fortunes made, fortunes lost...politicians made and then destroyed...a most amazing book

I picked this up hoping to find something as riveting as his earlier Vegas adventures, but this felt like a totally different author. Points for versatility, but expect this to be a very slow start. Full disclosure: I aborted when the first hour of reading failed to capture me.

If you want to learn about Russia, the oligarchs, and Putin read the following:
Putin's Kleptocracy: Who Owns Russia?
The Oligarchs: Wealth And Power In The New Russia
Godfather of the Kremlin: The Decline of Russia in the Age of Gangster Capitalism

Post-communist Russia under Yeltsin and Putin is the location of this book.

Three main characters in this book. Former FSB agent Sasha Litvinenko, billionaire Boris Berezovsky, and billionaire Roman Abramovich involve most of the situations in this book. Litvinenko was exiled to the United Kingdom about being imprisoned by Vladimir Putin. Berezovsky was one of the richest men in the world, but spent his money on funding Russian opposition politics before killing himself. Roman Abramovich did not politically oppose Putin, and made his millions in Russia through the exploitation of oil and aluminum. The corruption in post Communist Russia was extensive while led to a handful of oligarchs owning most of the natural resources of the Russian Federation. The fights between the oligarchs led to a crude capitalism in the Russian Federation that hurt the people.

This is an interesting book about post-Communist Russia. It shows the rise of Putin, and how democracy is in jeopardy in the Russian Federation. This is a solid and interesting read about Russia.

As Gorbachev went down and with him, the Soviet Union, the power vacuum that resulted created an opportunity for the rise of an unlikely new leader, Boris Yeltsin. Having come up as an engineer/bureaucrat in the Soviet Era, Yeltsin was more committed to democratic ideals than most Russians could have expected or hoped for.

From the beginning, Yeltsin's hold on the Presidency of post-Communist Russia was always tenuous. Conspiracies to push out Yeltsin came from the old Communists. There were multiple assassination attempts and a host of nearly-successful coups which almost deposed Yeltsin. With Yeltsin came the rise of oligarchs, Soviet-era academics, technicians and entrepreneurial bureaucrats, people who could recognize needs and opportunities formerly filled by the Soviet state but that were now absent.

One such oligarch was Boris Berezovsky. A mathematician by training, Berezovsky first found his business footing in trading and selling automobiles. He parlayed his skills into setting up the largest dealership network in post-Soviet Russia. Ambitious, intelligent and aggressively entrepreneurial, Berezovsky could see lots of other opportunities to gain wealth and power. Airlines, television, oil and gas and a host of smaller business and industrial enterprises offered opportunities that would expand his empire and make him a multi-billionaire. The plot thickens up when Berezovsky moves into the political realm. Author Ben Mezrich makes a compelling case that Berezovsky was essential to keeping Yeltsin in power. Through key connections, one of whom was ex-FSB agent Alexander Litvinenko, Berezovsky himself became a "krysha" or roof (a protector) for his much younger and imaginative business associate, Roman Abramovich, whom for a long time, he regarded as a son. Together, they amassed billions.

Berezovsky continued to work with the Yeltsin administration through Yeltsin's daughter, Tatiana among others. When it became clear that Yeltsin was sick and could no longer continue, Berezovsky was slow to shift his loyalty to Putin, a Yeltsin protege, a figure whom he vastly under-estimated and saw as other than Presidential material. By the time Putin had acceded to power following Yeltsin's surprise resignation, the political landscape had shifted significantly. For the first time since becoming an oligarch, Berezovsky was behind the curve ball.

Berezovsky could possibly have stayed in the inner circle and functioned as a "krysha" were it not for his ambition and greed. More to the point, Berezovsky was constitutionally incapable of working quietly behind the scene. He wanted to be out there, visible and significant. When the nuclear submarine Kursk sank, an extremely embarrassing incident for the Russian government and for Putin personally, Berezovsky influenced his television network to hammer Putin. Berezovsky was invited personally to meet in the Kremlin with Putin and in no uncertain terms, was told to back off. He wouldn't and thus began the downfall of Boris Berezovsky.

Mezrich traces the key figures of Berezovsky, Abramovich, Litvinenko and his one abiding pal, Badri Patarkatsisvili through the remaining years. Three of the four are now dead with Abramovich the sole survivor, still a key ally of Putin and fantastically wealthy. The poisoning-caused death of Litvinenko from radioactive Polonium 210 in London became a celebrated international incident of intrigue. No suspect has ever been named or convicted. In his remaining days as he fell apart, Litvinenko penned a note personally naming Putin. A five-star tale.

I had received this book as a gift several months ago and resisted reading it until a few days ago. I had worked in Russia from 1994-1996 as a Moscow-based senior member of a "Big Four" ("Big Six" at the time) international consulting/audit/tax advisory firm. My area of expertise was to assist the Russian government in the huge effort to privatize state owned enterprises. Although I was minor player in this process, I did meet several of the individuals mentioned in this book - which is really story of the rise and crash of Boris Berezovsky. There was a major international donor and expat advisory element associated with the rise of the oligarchs and other "New Russians" during this time which involved $billions in international donor underwritten programs and loans that that initially propped up some of those individuals. In some ways, the current environment in Russia is a partial result of those influences. Every major global consulting firm, law firm and manufacturer had huge aspirations for their Russian based business operations and there were legions of such individuals directly advising the Oligarchs, Russian government and emerging businesses. But, that is not cited in this book and that is another story. However, this tale of Berezovsky captures the complex spectrum of emotions that I still feel to this day some two decades later - a combination of non-stop exhilaration, optimism, success, accomplishment, fear, trepidation and paranoia. Like many other expats, I got burnt out after three years of trying to operate in such an extremely challenging business, social and political environment. Wearing a bulletproof vest to work every day and suddenly realizing that expats had no real rights/cover in Russia got old. The Oligarchs operated in an entirely different stratosphere and made their own rules for a relatively short amount of time. I first heard of Berezovsky a few weeks after I arrived in Moscow as one of my Russian employees bought his first "machine" - a puke green Lada - and described the process he had to go through to obtain that car. I won't give it away as that process is partially covered in this book. But, Berezovsky's name came up several times during that discussion and how he may have made is initial fortune in the car sales business. (That same Russian worker took entrepreneurism to heart as he went on to become the founder and CEO one of the largest telecom entities and Russia). And, you think we have it tough buying a car in the Good Old USA? Simply put, the individuals covered in this book are/were a product of their environment and time. Russia (and, not to be too political) and other countries are not the U.S./Western Europe so it is difficult to understand and appreciate that unless you are actually there/then. Berezovsky was a product of that environment and become the polarizing example of what could be accomplished or avoided in the new Russia.

When the USSR collapsed in 1991, the country embarked on a painful transition from communism to capitalism. Oligarchs took over, seizing political power and propping up the ailing President Boris Yeltzin. They created monopolies, cornered markets, and controlled the media. When Yeltzin’s health deteriorated, they devised a plan to replace him with Vladimir Putin.
They knew not what they were doing. The man they put in power ultimately turned against them. And he brought his own style of KGB savagery and corruption to the country.
The world was shocked when a former officer of the KGB died of polonium poisoning in London in 2006. But that was only the beginning. The country has today descended into kleptocracy. Journalists are routinely silenced. Political opponents are gunned down in the streets of Moscow.
Mezrich’s book can be read as a cautionary tale; if the oligarchs are allowed to control the government, as they did in Russia, who knows what havoc they may wreak.

A rare glimpse into the early days of the perestroika, with all the expected drama: politics, alliances, and fortunes (and human lives) made and lost in the process. Ben Mezrich follows the rise of Berezovsky and his subsequent exile: taking advantage of hyperinflation to make his first fortune; becoming one of "Yeltsin's family"; helping nominate and elect Putin; falling out with Putin and his switch to the opposition; life in exile in the UK.

"Once Upon a Time in Russia" reads like a thriller, except that it's based on real events and characters -- well, at least as far as we know. The book covers many politically-sensitive topics so take the "provided facts" with a grain of salt. That said, a captivating and educational read for anyone who's interested in Russian business and politics (the two are, for good or worse, are intertwined).

The book centers around the rise and fall of Boris Berezovsky, once a leading Russian oligarch. His early career was that of a university mathematician - impressive enough to become a member of the Russian Academy of Sciences, and publishing 16 books and articles between 1975 and 1989.

His climb to wealth began by taking advantage of inflation - buying cars for his dealerships and not paying for them for months, even years, when the 'real' debt had declined immensely. Mezrich claims Boris averaged 600% profit/car in this manner. In 1994 he was the target of a car bombing, but survived - thanks to his bullet-proof limousine and the fact that the doors had not been locked, allowing the blast to blow him outside the car. Police investigation eventually linked the crime to resistance of Soviet-era managers still employed in a Lada manufacturing upset about his controlling about 30% of the company via about $50 million in funding from U.S. investors.

Berezovsky next became involved with taking control over the country's main television channel. At the time, the TV station was losing about $250 million/year - purportedly because advertisers all went through a single consortium that artificially kept advertising rates low. Berezovsky appointed its popular anchorman and producer as CEO - that person was assassinated three months later for trying to break up that monopoly. Berezovsky used (owned 49% - unclear how he ended up with managerial discretion) the TV channel to oppose Communists and nationalists running against Yeltsin, then later to support Putin's election. (Yeltsin helped ensure Putin's election by resigning 6 months early and appointing Putin his successor.) The oligarchs thought Putin would be pliable.

From 1995 to 1997 Berezovsky and a partner assisted Roman Abromovich's acquisition of Sibneft - Russia's sixth-largest oil company. Then, in 1995 he helped arrange management reorganization at Aeroflot and its corporatization.

Most privatization in Russia occurred in the early to mid-1990s while Yeltsin was president. A great amount of the nation's wealth fell into the hands of tycoons (oligarchs), and the wealth gap dramatically increased. Wide-scale distribution of former state-owned enterprises into public ownership and for-profit status via vouchers. Between 1992-94 about 98% of the population participated via equal distribution among all, including minors. They could be exchanged for shares in the privatized enterprises. However, most sold their vouchers quickly because they were very poor or didn't understand the program. Thus, most vouchers (and shares) ended up being acquired by the firms' managers.

Russia's government encountered severe deficits prior to the 1996 presidential elections. This led to some of the largest industrial assets being auctioned for money loaned. The auctions were rigged and lacked competition - largely controlled by insiders with political connections or the banks themselves. (Foreign bids were not permitted, and unexpected winning bids were disqualified on spurious grounds. Another tactic - requiring winning bidders to make substantial investments in an acquired firm - these could be avoided by transferring ownership or simply ignored.) Since the loans were not repaid on time, this became a form of selling major assets at very low prices. Thus, 78% ownership in Yukos, worth about $5 billion, was acquired by Khodorkovsky for $310 million, and Boris Berezovsky got Sibneft (another large oil firm, worth $3 billion) for about $100 million. The buyers, realizing future governments might view their purchases as fraudulent, then typically stripped assets from their newly acquired enterprises instead of building them stronger.

The new kleptocracy had mostly achieved initial wealth through favorable deals with or outright theft from the government - many had ties to government. Experts have concluded there is no evidence the privatization led to sharp improvements in productivity. The public came to detest privatization. Legal and institutional infrastructure to control theft by insiders from private companies didn't exist - prosecutors had no experience untangling complex corporate transactions and no understanding of the subtle and indirect way insiders could siphon off profits. Finally, under Communism managerial skills tended to be built in getting around regulations to obtain parts and supplies, not actual productivity improvement; tax avoidance was another well-honed skill.

Putin immediately made it clear that oligarchs would no longer be allowed to meddle in politics/government, though they could retain their business holdings if they complied. Berezovsky, however, used his TV influence to criticize Putin after the Kursk submarine sank. He was summoned to Putin's office and directed to remove himself from content decisions. Putin, however, decided he didn't trust Berezovsky to comply and then ordered him to divest himself of TV station ownership. Berezovsky countered with anti-Putin stories/editorials in his newspaper. Putin's reaction forced Berezovsky into exile, and to sell all his Russian holdings. He then lost about $250 million in a divorce settlement, and another roughly $200 million (legal costs) in a poorly-reasoned lawsuit against a former partner, then committed suicide.

Note: Most of the details on privatization were obtained from sources other than this book. 'Red Notice' was particularly informative on how the original voucher system worked.

"Once Upon a Time in Russia" by Ben Mezrich starts off with a meeting held by Putin shortly after he became president, in which he assembled all the oligarchs and told them that while they're allowed to practice business, he's banning them from engaging in politics. Each chapter then reads like a chronological snapshot of many major scandals faced by the Russian oligarchs, dating back to the fall of the Soviet Union--when the entrance of capitalism into a previously state-centered economy lead to a minority of individuals acquiring very valuable formerly state-owned properties and becoming unbelievably wealthy after acquiring them by paying a tiny fraction of the actual price--a mess that the murky voucher system used at the time created.

In his book, Mezrich briefly gives a background of how the oligarchs acquired their wealth, but mainly concentrates on the scandals surrounding the oligarchs: the assassination attempt on Boris Berezovsky that led to the decapitation of his driver, the car chase of bank and media magnate Gusinsky and his security personnel that led to him having to briefly flee the country, the arrest of Mikhail Khodorkovsky, the assassination of Larry King-type TV newsman Vlad Listiev (who wasn't an oligarch himself, but was killed by a hired killer after wanting to clean out the financial corruption with advertising revenue, in the country's biggest channel ORT which was co-owned by Berezovsky), and ultimately to the fall from grace and murder of Berezovsky himself, among other scandals. Also mentioned is Roman Abramovich, who unlike Berezovsly (who was once a part of Putin predecessor's President Yeltsin's most inner circle, before becoming sworn enemies with Putin) manages to stay in a good relationship with the government and hold on to his fortune, even winning a court case over Berezovsky and causing his financial ruin shortly before Berezovsky's murder. However, the ultimate star of the book--the one that gets the most ink---is Berezovsky himself.

As someone who was familiar with all the stories recounted in the book (having read about them a lot previously), I can say that Mezrich covers most of the major oligarch scandals of the time--recounting them in brief vignettes. So instead of a long drawn out narrative, we get a book that's reminiscent of a screenplay--only focusing on the "hit" stories.

Easy read that nicely complements Red Notice. I only wish the 1998 Russian ruble crisis period wasn't completely glossed over. IMF loans to Russia may have gone missing in part during this period. Another book, Not My Grandfather's Wall Street, makes mention of this corruption from a different angle. I enjoyed getting to know key oligarch characters better, but I'd bet some editor cut back on a key chapter here?