The Decline of Rus­sia in the Age of Gang­ster Capitalism

by Paul Kleb­nikov
2001, Har­vest Books
ISBN 0156013304
416 pages

Review
Mr. Paul Kleb­nikov makes a rather unusual dec­la­ra­tion at the begin­ning of his book by stat­ing that what is about to be read may be dif­fi­cult to believe. As this work is non-fiction the com­ment would seem mis­placed. How­ever once the read­ing has begun it not only proves to have been appro­pri­ate, but is a fact you will keep remind­ing your­self of.

The Author relates what is arguably the great­est theft in His­tory, and if he had decided to change some detail, he could have had an out­stand­ing novel. That the events he relates actu­ally took place makes for a read­ing expe­ri­ence no novel can com­pete with. I have been fol­low­ing Mr. Klebnikov’s sto­ries in Forbes, since Decem­ber of 1996 when he intro­duced Mr. Boris Bere­zovsky as Russia’s God­fa­ther. That first arti­cle in Forbes brought the wrath of Mr. Bere­zovsky to bear on Forbes and the Author, but he con­tin­ued with his research and lived to write this book. What­ever his per­sonal moti­va­tion was, and con­tin­ues to be, is remark­able. This man worked for years on the home field of a vari­ety of peo­ple who were capa­ble of remov­ing him from the liv­ing, with a glance, and with­out any fear of con­se­quence to themselves.

The dys­func­tional, amoral, noth­ing is out of bounds world, that was Boris Yeltsin’s Rus­sia, truly is dif­fi­cult to get your mind around. Some minor details that will pre­pare you for the real story; when Gor­bachev was still in power the gov­ern­ment bud­get received 25% of its rev­enues from where, from the Gov­ern­ment monop­oly on Vodka! The ruble of Gor­bachev was worth approx­i­mately one U.S. dol­lar. At the close of 1992 one dol­lar would cost 415 rubles, and when Yeltsin finally left office in an alco­holic haze, if you wanted a dol­lar you needed 28,000 rubles!

The “Voucher Auc­tions” that took place in 1993 and 1994 would not have been con­doned much less imple­mented by a stu­dent with a semes­ter or two of Eco­nomic study. Gazprom, which owns one third of the planet’s Nat­ural Gas, was “auc­tioned” for $250 mil­lion dol­lars, the truer value, if val­ued as a West­ern Com­pany, would have had its gas reserves alone val­ued at between $300 and $700 BILLION. These num­bers do not take into account that the com­pany was basi­cally a monop­oly sup­plier to the entire for­mer Soviet Union, and much of West­ern Europe as well.

To put a more famil­iar face on these num­bers, at the very low­est esti­mate, you could have bought Exxon and had $12 bil­lion left over, at the high end you could have bought Gen­eral Elec­tric, the most valu­able com­pany as I write, and since you might be thirsty after the effort, you could pick up Coca Cola with the change left from the GE purchase.

You will learn how Mr. Bere­zovsky pri­va­tized the cash flows of com­pa­nies like Aeroflot, com­pa­nies he did not own, and by using lit­tle money, if any at all, and if he needed any the seller, The Gov­ern­ment would sup­ply it. He was not the only man to take advan­tage of Yeltsin and his hand picked group of incom­pe­tents but he surely was the mas­ter at the game.

This book will leave you stunned. How much to buy the elec­tion for Yeltsin, read the book, how often Yeltsin was sober, the facts will alarm you, how Tanya his beloved daugh­ter who knew noth­ing that qual­i­fied her for Gov­ern­ment, became the power behind her Father, often doing the bid­ding of Mr. Bere­zovsky, who are you ready for this, was appointed to the Gov­ern­ment by good old Yeltsin himself.

The whole­sale rape of Russia’s assets is worse than any dam­age that Rus­sia has ever been through. Those who dared to chal­lenge the sys­tem of “Klep­toc­racy” were easy to iden­tify, they were either already buried, were bleed­ing, or about to be assas­si­nated. You played by the rules of thieves or you were removed, it was that simple.

I have read many metaphors in other places that com­pare the Mafiyas’ in Rus­sia today to the Rob­ber Barons of this Coun­try of a cen­tury or more ago. Any­one who puts forth this argu­ment is painfully igno­rant of His­tory. It is true that the men who car­ried the sobri­quet Rob­ber Baron were not indi­vid­u­als whose paths you would have wished to cross, for as busi­ness­men they were ruth­less. That is where the com­par­i­son ends, for the bot­tom line is that they built this coun­try, and while there were times vio­lence took place it is only the inept that would com­pare it to the thou­sands mur­dered, and the mil­lions who died as the result of Rus­sia being taken apart and given away. Rus­sia was evis­cer­ated with the Government’s con­sent and its par­tic­i­pa­tion, and the con­se­quences to the cit­i­zenry at large had not been as pre­med­i­ta­tive in their design or as destruc­tive since Stalin.

I liked this quote from a top Russ­ian Offi­cial, “it is very dif­fi­cult to deter­mine whether it’s incom­pe­tence or embez­zle­ment”.
–Fran­cis J. Mcin­er­ney (Commonwealth)

THIS BOOK IS IN PRINT. Avail­able com­mer­cially. Learn more about Paul Kleb­nikov.