Our Oligarch? Do Roman Abramovich's Donations Link Major Jewish Philanthropies to Putin?Breaking News
tags: Jewish history, philanthropy, Vladimir Putin, Russian history, post-soviet history, Money Laundering, Roman Abramovich
Some basic facts about Abramovich have been established by his biographers, Dominic Midgley and Chris Hutchins. The future billionaire was born in Saratov in 1966 to Jewish parents who traced their roots to Ukraine, Belarus, and Lithuania. Before he turned three, both were dead—his mother, Irina, of complications from a back-alley abortion; his father, Arkady, in a construction accident—and the young orphan was taken to the frigid town of Ukhta, nearly 800 miles northeast of Moscow, to be raised by his uncle Leib, who ran the supplies department for the local timber enterprise and gave Abramovich early exposure to the informal commercial economy tolerated during the later decades of Communist rule. In 1986, the 20-year-old Abramovich began dabbling in street vending, and by 1988 he had founded a doll-making company, taking advantage of the liberalized business climate created under Mikhail Gorbachev’s program of perestroika, which sought to reform the ailing Soviet economy. A savvy businessman by all accounts, Abramovich began diversifying almost immediately, and within seven tumultuous years, he went from selling rubber ducks to Soviet children to selling oil and gas on international markets.
Certain Soviet Jews of Abramovich’s generation found themselves at the forefront of an emerging market economy. Concentrated in white collar professions but systematically excluded from desirable posts and from the top ranks of the Communist Party, they were unusually prepared—and, perhaps, motivated—to find legal and semi-legal points of entry into the tightly-regulated commerce between the Soviet Union and the West. This helps explain why, as the historian Yuri Slezkine writes in The Jewish Century, six of the seven top oligarchs of 1990s Russia (Petr Aven, Boris Berezovsky, Mikhail Fridman, Vladimir Gusinsky, Mikhail Khodorkovsky, and Alexander Smolensky) were ethnic Jews.
The Soviet Union collapsed at the end of 1991, and Russia’s new president Boris Yeltsin soon initiated the firesale privatization of state-controlled industries at the urging of Washington and the IMF—a reckless transition from a command economy to a capitalist one that drove millions of Russians into poverty. It was precisely Russia’s proto-capitalists who stood ready to profit, including Berezovsky and Abramovich, who met on Aven’s yacht in 1995. The orderly, introverted Abramovich quickly became a protege to the gregarious, hard-partying Berezovsky, who was 20 years his senior. That same year, the Yeltsin administration implemented its infamous loans-for-shares program, selling off key state industries in rigged auctions to Russia’s new business elite for a fraction of their real value in order to stabilize the state’s finances in the short term. Berezovsky and Abramovich gained ownership stakes in Sibneft, one of the world’s largest energy companies, and became instant billionaires.
Russia’s new plutocrats wasted no time translating their wealth into political power. In 1996, the handful of leading oligarchs pooled their financial resources—and directed their media companies’ coverage—to reelect the deeply unpopular Yeltsin over his Communist challenger, Gennady Zyuganov, whose platform of re-nationalizing industries terrified both the Russian and Western business classes. At a meeting a few months after Yeltsin’s victory, the oligarchs discussed the dangers of acting as power brokers. “Individually, some of them had brushed up against anti-Semitism in earlier years, but now, as a group, they began to fret about the possibility of a public reaction to the ‘Jewish bankers,’” writes David E. Hoffman in his authoritative 2002 book, The Oligarchs. Fearing that it was unsustainable for a small group of mostly Jewish billionaires to prop up an ailing, visibly alcoholic president—especially after the ruble collapsed in 1998, dragging down a generation’s living standards and initiating a hunt for scapegoats—Berezovsky spearheaded an effort the following year to replace Yeltsin with a young, healthy, disciplined, and then-obscure former KGB officer named Vladimir Putin. It was a decision he would come to regret.
During his first year in office, the new president moved aggressively against any independent power base in Russia, weaponizing the intelligence services in which he had spent his career against the country’s nouveau riche. The oligarchs’ standing was revealed to be tenuous and theoretical; wealth so easily acquired could just as easily be taken away. In 2001, Putin hounded Berezovsky and Gusinsky—whose TV networks had criticized the president’s mishandling of a naval disaster—with criminal indictments for tax fraud, forcing them to sell their media and energy holdings at a fraction of their true cost. As a result, Abramovich, who had never challenged Putin, acquired control of Sibneft, while Berezovsky fled to the United Kingdom and Gusinsky departed for Spain and then Israel. Abramovich again came out ahead in 2003, when the oligarch Khodorkovsky was sent to a Siberian prison on tax charges after criticizing Putin for corruption, leaving his assets in the energy sector to be redistributed among those on good terms with the president.
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