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Russian Oligarchs

Russian oligarchs are in the news – for a “haircut” in Cyprus, a death in London, billions all over.  We check in on the post-Soviet robber barons.

Russian tycoon Boris Berezovsky, second from left, talks to a reporter after losing his case against Russian oligarch Roman Abramovich as he leaves the High Court in London, Friday, Aug. 31, 2012. (AP)

Russian tycoon Boris Berezovsky, second from left, talks to a reporter after losing his case against Russian oligarch Roman Abramovich as he leaves the High Court in London, Friday, Aug. 31, 2012. (AP)

Russian billions and Russian oligarchs big in the news this week. In Cyprus, an astounding portion of the country’s bank deposits laid before the world as Russian stash. Off-shore gravy. In London, one of the once-biggest and most outspoken Russian oligarchs in exile found dead. Seems to have hung himself.

Russia’s oligarchs sprang from the snatch and grab free-for-all at the end of the Soviet Union. Now we’re into a second generation. Living large. Billions flowing around the world.

This hour, On Point: Russia’s oligarchs. Their money, their influence, their impact, in Russia and beyond.

-Tom Ashbrook

Guests

Andrew Kramer, Moscow correspondent for the New York Times. (@andrewkramernyt)

Matthew Rojansky, deputy director of the Russia and Eurasia program at the Carnegie Endowment for International Peace. (@matthewrojansky)

Mark Hollingsworth, author of “Londongrad: From Russia with Cash;The Inside Story of the Oligarchs.”

From Tom’s Reading List

CNN “The colorful Boris Berezovsky, who died in unexplained circumstances over the weekend at a country estate south of London, was one of the Russian oligarchs who made fortunes following the breakup of the former USSR. But by the time of his death the 67-year-old was reportedly in financial difficulties after he was ordered to pay a massive divorce settlement to his ex-wife as well as legal costs following the loss of a $6.5 billion lawsuit against fellow oligarch Roman Abramovich last year.”

Reuters “If Russian oligarchs still have money in Cyprus, where a lot of them base their businesses, they aren’t letting on. ‘You must be out of your mind!’ snapped tycoon Igor Zyuzin, main owner of New York-listed coal-to-steel group Mechel, as he dismissed a suggestion this week that the financial meltdown in Cyprus posed a risk to his interests.”

Businessweek “On Feb. 22, Mikhail Prokhorov, co-owner of the Brooklyn Nets and one of Russia’s richest men, sold his 37.8 percent stake in Polyus Gold International (PGIL), the country’s top gold producer. Earlier this year billionaire Sergey Popov dumped his remaining stake in coal miner Suek. In January, Russian tycoon Viktor Vekselberg said he won’t invest his share of the sale ofTNK-BP (TNBP) in natural resources.”

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  • Wm_James_from_Missouri

    This Russian businessman, Dmitry Itskov, is looking to start an immortality research center. Maybe you don’t have to take it with you, that is, if you are lucky enough to live forever !

    http://www.kurzweilai.net/how-would-you-like-to-invest-in-immortality?utm_source=KurzweilAI+Weekly+Newsletter+Plain+Text&utm_campaign=0e5aee17d3-UA-946742-1&utm_medium=email

    • RiverPub

      Damn, I got all excited when I thought you were talking about an imorality research center. Need to get reading glasses.

  • Gregg Smith

    Obama made good on his flexibility promise.

  • Tyranipocrit

    its ok to call russian billionaires robber barons but you will never hear US media call American billionaires robber barons.  pathetic. 

    • TomK_in_Boston

      Amen. What’s so special about russia?  With apologies to Acnestes, in the USA they’re called “hedge fund managers”. At least russian oligarchs are usually associated with a business that actually produces something, unlike romney-type balance sheet manipulation.

  • Acnestes

    Peter Sagal hit the nail on the head on “Wait, Wait”  last weekend. – “Russian oligarchs – or as they’d be called in America, ‘waste disposal consultants’ “.

  • Ray in VT

    Ah the Russian oligarchs.  Yet another unintended consequence of the collapse of the Soviet Union and the rapid, and sometimes likely corrupt, deals that occurred as a closed economic and cultural system got turned very rapidly into a sort of wild west for a time in the 1990s.

    • northeaster17

      Unfettered capitalism. Looks good huh? Even Smith himself called for tight regulation.

      • Ray in VT

        Well, the unregulated workplace and marketplace can get very ugly and abusive, which is why the movement arose to curb the worst parts of the system over 100 years ago.

        • TomK_in_Boston

          …and is now being dismantled with astonishing rapidity. Amazingly, in the USA, many who will suffer the most are strong supporters of our oligarchization.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Now Tom, I have it on the highest authority that the working and middle classes in America are singularly responsible for worrying about the future economic validity of their employer, mortgagor, bank, and insurance company. Only the well off get to be called entrepreneurial capitalists for grabbing what they can while they can.

            Seen in that light, America’s riffraff would only naturally argue persuasively for lower wages, a hollowed out government, more inequal distribution of economic information, and the dismantling of the benefits they’ve paid for, as is their duty to their societal and monetary betters.

          • Ray in VT

            but a lot of them think that they’re going to be the one doing the screwing, not getting screwed.  Maybe they’re just betting that they don’t have to outrun the bear, just the next guy.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    Doesn’t the opening blurb really seem to gloss over how the neo-economists from the West decided to make the new Russia the lab for a ton of ideas that would never pass muster in a decently representative Western government?

    • Don_B1

      Certainly Jeffrey Sachs, currently Quetelet Professor of Sustainable Development, and Professor of Health Policy and Management at Columbia University’s Earth Institute, but previously, while at Harvard University, developed shock therapy as a remedy for hyper inflation which worked for Bolivia but failed in the Russian transition from Soviet economics to “free-market” oligopoly.

      His latest misuse/misunderstanding of macroeconomics was demonstrated in his joining with Joe Scarborough in writing a OpEd in the Washington Post, “Deficits do matter”:

      http://www.washingtonpost.com/opinions/joe-scarborough-and-jeffrey-d-sachs-deficits-do-matter/2013/03/07/82de539a-82bd-11e2-b99e-6baf4ebe42df_story.html?hpid=z2

      where Professor Sachs seems to agree to Scarborough’s Strawman definition of Keynesianism so they both can rail against it while agreeing to some Keynesian actions while denying they are Keynesian. WOW! The distortion!

  • sam

    I know as much about Russian oligarchs as I know about US oligarchs.
    :)

  • sam

    Who’s turn is it to be a president again? Put in or Medved ev? :)

    • Ray in VT

      I think that Putin could serve another term after his current one, then maybe it would be Medvedev’s turn.

    • hennorama

      Apologies in advance for the way my brain works.

      Sam – the way you wrote “Put in or Medved ev?”, combined with the context of your remark led to this:

      Putin = Put in [forever]

      Medvedev = Medved [for]ev[er]

      Only one order of eyerolls per customer, please.

  • Don_B1

    To see the possible ramifications of the Cyprus debacle beyond the “haircut” given the Russian oligarchs, look at this:

    http://www.nytimes.com/2013/03/25/opinion/krugman-hot-money-blues.html?hp&_r=0

    This might well be the straw that breaks the back of resistance to changing the free-for-all of international finance. Whether it will be a quick action (unlikely) or a slower, drawn-out process will depend perhaps on how rigidly the Euro-meisters hold to their ideas of the need for austerity in the face of continuing contraindications.

  • http://twitter.com/freebeerpvd Jim Frain

    I still dont know the difference between a Russian Oligarch and American Oligarch.

    • TomK_in_Boston

      And you won’t hear any discussion of the possibility that there is no difference from the corporate media.

  • Michiganjf

    Tom,

        You need to re-listen to this show….

      The descriptions of traits of the Russian Oligarchs that keep cropping up are consistently applicable to the wealthy right here in the U.S!

    You are not emphasizing that point enough, if at all!

    Modern Russia is where the U.S. is headed if Republicans keep influencing our future direction!

    • WorriedfortheCountry

      Who?  Warren ‘Boris’ Buffet and Bill ‘Vlad’ Gates?

      Who knew that Putin was a Republican? Hilarious.

      • http://www.facebook.com/peterboyle.4848 Peter Boyle

         No, more like Jamie Dimon, the Koch brothers, and Jeff Immelt.  Since Reagan more and more senior USGov officials have come directly from Wall Street, and we see the result.  Anyone looking at the growing (since 1980) disparity in wealth and income will see the result of this growing Oligarchy.  More and more of the wealth of the US is concentrated in fewer and fewer hands.  What would you call that?

        • WorriedfortheCountry

           Now that you mention it there are more examples of government officials from Democrat administrations playing the revolving door between Wall Street and the WH to make their fortunes. The Clinton admin is full of a who’s who of Wall street fortunes.

           I find it curious that ole Michiganjf somehow blames the GOP.

  • albert Sordi

    The Soviet Union was always ruled by a cabal of elites, from even before its inception when Jacob Schiff and other New York bankers funded Lev Bronstein (Leon Trotsky) and the Russian revolution that destroyed the monarchy.
    The elites withing the Soviet Union engineered its downfall with Ronnie Raygun and the drunken Yeltsin, so that they would privatized the resources and  enterprises of its people.  The oligarchs are not different from much of the Soviet party leaders,  are for the most part elitist criminals. They fleased the wealth of the Russian people which was welcomed and assisted by countries to included the US, Britain, and Israel.

  • Roy-in-Boise

    Its a dog eat dog world. Always has been and always will be. Food, medicine or education it will not get to the consumers unless there is profit in it for the suppliers.

    • JGC

      Whenever I hear “its a dog eat dog world” it always makes me think of Norm saying, “And I’m wearing MilkBone underwear”…

    • hennorama

      Right. 

      Let’s follow this to its logical conclusion, to a people-eat-dog world, followed by a people-eat-people world.

      Is barbarism what we should aspire to?

      Civilized societies treat the least of their people better than dogs.  At least a BIT better, that is.

      • Don_B1

        And while it is hard to recognize in many pronouncements from evangelicals, caring for the poor was big in Jesus’s mind, at least in the first four books of the New Testament.

        It will be interesting to see the emphasis that Pope Francis puts on charity for the poor versus “resentment politics” and false morality of “moral hazard” economics only when dealing with the middle and lower class economic difficulties.

        So many on the “right” seem to have forgotten that everyone does better when the system is fair to all. But since Reagan’s inauguration, the system has been gradually tilted toward the rich, who have been all too successful in prevailing on the middle and lower classes to blame each other rather than the tilting that the wealthy have engineered. It is the classic class warfare that the rich have always waged and never more cleverly than over the last 30 years.

        • Gregg Smith

          But the right is far more charitable to the poor in the private sector. Romney was criticized for giving so much to charity instead of taxes. It’s not logical to conclude (if you do) that the right is uncaring, they just have a different method. I don’t agree with your definition of fair.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    Caller Michael at :48 really wants to call other people “Socialists”, and seems full of simplistic solutions which don’t have much to do with the actual legal structure of Russia.

    • Anita Paul

      Too funny!!!  Whenever in doubt as a Tea Partier yell Socialism.  Ok I making an assumption but really. 

  • http://twitter.com/freebeerpvd Jim Frain

    Ita a 

  • albert Sordi

    Vladmir Putin saved Russia.  The clowns and puppet leaders of the west couldn’t come close to the skill and integrity of this patriot.  At times, to the west, Putin seems to collaborate with oligarchs, but to be sure, he is in survival mode, and his goal is to repatriate the wealth that these thieves stole from Russia.  This is why the Russian people love this leader.

  • http://www.facebook.com/jyldyz.djumalieva Jyldyz Djumalieva

    Brilliant analysis from both guests! Thanks

  • hennorama

    I love the contrast between the topic of Russian oligarchs, some of whom are very conspicuous spendthrifts, and where guest Matthew Rojansky works, the Carnegie Endowment for International Peace.

    The Carnegie Endowment for International Peace was founded over 100 years ago by philanthropic industrial tycoon Andrew Carnegie, who gave away about ninety percent of his entire fortune before he died in 1919.

    http://carnegie.org/about-us/foundation-history/about-andrew-carnegie/carnegie-for-kids/andrew-carnegie-legacy/

  • Maroloh

    what about American oligarchs?

  • http://www.facebook.com/peterboyle.4848 Peter Boyle

    A few of the ‘American Oligarchs’ are Jamie Dimon, the Koch brothers, and Immelt to name a few.  Since Reagan our government has had a growing habit of putting Wall Street types in charge, and we can see the results.  Money = Free Speech.  Corporations are People.  An ever widening gap in both wealth and income between the top 10% and the rest of us.  A failed gamble by Corporations we deem too big to fail has caused our government to socialize their losses…and allow them to return to record profits and record bonuses.  Profit, however, is still very Private. 

    At what point do We, the People, put a stop to this?  It is huberis and hypocracy to decry the Russians for letting the Oligarchs rob their country when we have allowed the same thing…and continue to let it happen.   Do we really want this dog-eat-dog ‘I’ve got mine, screw you if you don’t have yours’ system the Republicans have forced on us to continue? 

    It seems that half the country is so desperate to get ahead that they will follow the fictional musings of a failed Russian emigree.  Rogoff (et al) points out that, despite protestation to the contrary, there is nothing different about this recession (depression?).  It could be foreseen (and was foreseen by some) as a growing inevitabliity once Reagan brought in Supply Side (Chicago School, Uncle Milty Freidman) economics as the way we would do things. 

    Meanwhile, the Nordic countries are doing just fine, and their People are both happy and prosperous.  We are more like Russia than we dare admit, and we still celebrate and reward our Oligarchs.

    • Don_B1

      I like your post, but would like to clarify, for those who have not followed the story of the Great Recession of 2007-2009, that that recession IS “different” from the recessions between the two recessions of the Great Depression and this one, as Carmine Reinhart and Kenneth Rogoff made clear in an opinion piece in Bloomberg:

      http://www.bloomberg.com/news/2012-10-15/sorry-u-s-recoveries-really-aren-t-different.html

      where in two of the paragraphs they say:

      “Five years after the onset of the 2007 subprime financial crisis, U.S. gross domestic product per capita remains below its initial level. Unemployment, though down from its peak, is still about 8 percent. Rather than the V- shaped recovery that is typical of most postwar recessions, this one has exhibited slow and halting growth.

      “This disappointing performance shouldn’t be surprising. We have presented evidence that recessions associated with systemic banking crises tend to be deep and protracted and that this pattern is evident across both history and countries. Subsequent academic research using different approaches and samples has found similar results.”

      What they are saying is that the Great Recession is a balance sheet recession, as the Great Depression recessions (1930 and 1937) were, while the other recessions in between where caused by other things, like the Federal Reserve raising the discount rate to staunch the inflationary psychology of the late 1970s and early 1980s, created the 1982-1983 Reagan recession and where the Fed, by lowering the discount could stimulate the economy back to medium to strong growth. That is the reason for the difference in recovery.

      Note that they, unlike Paul Krugman and many other economists, do not believe more stimulus would be effective at this point in returning the economy to full employment strong growth. They are almost certainly wrong in this; while it is possible that productivity gains have distorted the labor market, it seems clear that much of the excess unemployment, created by the Great Recession and persisting in the Lesser Depression that has trailed in its wake because of government austerity, could be eliminated.

  • JGC

    Why does this all sound so familiar…hmmmm…:

    “John Paulson, a lifelong New Yorker, is exploring a move to Puerto Rico, where a new law would eliminate taxes on gains from the $9.5-billion he has invested in his own hedge funds…Under the year-old Puerto Rican law, new residents pay no local or U.S. federal taxes on capital gains…”  from Bloomberg Businessweek, Katherine Burton et. al, 18 March 2013,  and this 

    “Puerto Rico’s pension fund, which is dangerously close to insolvency, figured prominently in credit rater Moody’s analysis when it downgraded the commonwealth last December to Baa3, its lowest investment grade rating…Dark clouds are hanging over Puerto Rico…”  from Reuter’s, Cate Long, 23 March 2013…

    Can’t quite put my finger on where I have heard this one before, comrades…

  • JGC

    The difference between an American oligarch and a Russian oligarch:

    When found dead under mysterious circumstances, the American oligarch requires a police investigator, a pathologist and a forensic accountant; the Russian requires a team of biological, chemical, radiological and nuclear specialists. 

    • hennorama

      JGC – By know I should know better than to read your comments while drinking coffee.  At least I’ve learned to keep a screenwipe handy.

      Yes.  There are forensics, and then there are FORENSICS.

      Well done.  (Again).

      • JGC

        ;)

  • Shag_Wevera

    I’m not sure we’re much better in America.

    • TomK_in_Boston

      There’s an international community of oligarchs with no loyalty to any nation. Mitt Romney has more in common with Putin or Prokhorov than with most Americans.

    • TomK_in_Boston

      There’s an international community of oligarchs with no loyalty to any nation. Mitt Romney has more in common with Prokhorov or with Putin than with typical Americans. It’s wrong to label them as “American” or “Russian”, just like it’s wrong to think of a corporation with a HQ in the USA that moves jobs to wherever there is cheap labor and no workplace laws as “American”. Contemporary oligarchs are beyond nations.

  • hennorama

    110 billionaires in Russia.  425 billionaires in America.  Differences:

    Russian oligarchs:

    Made their money in the 1990s = old money
    Made their money in the 2000s = new money

    American oligarchs:

    Made their money in the 1800s = old money
    Made their money in the 1900s = new money

  • marygrav

    Andrew, Mark and Matthew, three biblical names prophets, telling a truth that the West, i.e. the United States does not want to hear.  The West has wrecked Africa, Asia, and South America in a plethera of plots to destroy Communism.  The West has always been afraid since the Bolshevics overthrew the Tzar. 

    And what it feared most was that their Western Oligarchies would be next. So they had to plot and plan to save themselves by inventing “Godless Communism.”  This way, they could destroy peoples and cultures like the US and its Western allies did in Vietnam, where we lost.  But we won in Africa in the Congo.  The result is what you see in the Congo and the various corrupt government sealed in place by the West.

    If any people objected to these corrupt governments, the the leaders would scream: Communism, and the West would come in on their side.  You saw this from South Africa, the Congo, Mosambeque and so forth.  In South America, Chile is legend.

    Communism is often confused with Stalinism and Socialism.  The Most successful European countries are based on Socialism.  In their Post-WWII people have a constitutional right to housing and health care, a failure of the United States.

    An Oligarch is an oligarch whether American or Russian.  Look at Mitt Romney.  Since 1978 the United States has been an oligarchy.  And Reagan, the god of Republican Conservatism was the first president.

    Workers of the World Unite!  You chains are now made in China.

    • TomK_in_Boston

      Like I said, Romney has more in common with Putin and Prokhorov than with average Americans, and he’d be much more comfortable in their company. They’re not Russian or American, they form their own trans national class.

      Our problem is the ignorant faux news voter, often some geezer on SS and medicare ranting about socialism, so concerned that the lowest of the low might get a hand up that he/she can’t see the romneys stealing their lunch.

      • WorriedfortheCountry

         But Romney wouldn’t be more flexible after the election.  Say high to Vlad.

  • http://www.facebook.com/peterboyle.4848 Peter Boyle

    Our (US) Oligarchs are so bad they spend twice the amount of money to get rid of Food Stamps than it costs to run the program.

    Our Oligarchs are so smart they just write the laws (ALEC) they want passed and hand them to the politicians they pay to pass in Congress.

    Our Oligarchs are so Patriotic they keep both their jobs and their money out of the country so they can collect corporate welfare.

    Our Oligarchs are fearful that more Russian Oligarchs will move here because the pickings are so easy.

  • nanohistory

    I missed the beginning of this program but isn’t it true that the US was deeply involved with the demolition of the Soviet system through economic ‘shock therapy’ resulting in the disastrous conditions most Russians live with today? Wasn’t Condoleeza Rice one of the advisors? What about Jeffrey Sachs? Hasn’t he expressed his regrets at what he wrought?

    Seems to me these oligarchs are out and out big time crooks, thanks in part to US meddling.

  • Bill_GKD

    Extra!  Extra!  The investigation into Michele Bachmann’s potential campaign violations are just retribution by the sinister forces here in America that support radical Islam for her outspokenness.  Pass it on.  ;)

  • Gregg Smith

    .

  • ExcellentNews

    ” But you know that you have worked hard, that you are BETTER than them. YOU know what is better for the people of the Fatherland. If you give them democracy, they will redistribute the wealth you have worked so hard for, and our society will devolve… And thus I ask you to support me. I will stand for you… ”

    Sounds familiar? It could have been Mitt Romney. It could have been Karl Rove… But in fact, it is Adolf Hitler, in a speech to the German Industrial Congress in Dusseldorf in 1932, promising them cheap labor and tax cuts (no kidding, its true) in exchange of their support. And he went to deliver, eliminating inheritance excises, and building labor camps next to the factories of his patrons. 

    The sad fact is that there is no difference between Chinese Communist party insiders, Russian oligarchs, or American corporate barons. It is the plutocracy vs. the rest of us.

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