Boris Berezovsky

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Political and business career in Russia

Berezovsky, a Russian automobile manufacturer Avtovsky, capitalized on the opportunities offered by perestroika's generosity to discover LogoVAZ with Badri Patarkatsishvili and senior managers from the Russian automaker AvtovAZ in 1989. LogoVAZ developed software for AvtovAZ, sold Soviet-made vehicles and serviced foreign vehicles. The dealership profited from hyperinflation by putting cars on consignment and paying the manufacturer at a later date, when the money lost a significant amount.

All-Russia Automobile Alliance (AVVA), a venture fund he established in 1993 with Alexander Voloshin (Boris Yeltsin's future Chief of Staff) and AvtoVAZ Chairman Vladimir Kadannikov, one of Berezovsky's early ventures, was one of Berezovsky's early endeavours. Berezovsky owned about 30% of the firm, which grew nearly US$50 million from small investors through a bonded loan to the construction of a "people's car." The scheme did not have enough funds for the plant, and the funds were instead invested in AvtoVAZ production, while the debt to investors was converted for equity. About one-third of AvtoVAZ in 2000 stood about one-third of the city.

Berezovsky was the perpetrator of a car bombing blast in 1994 but he survived the assassination attempt, in which his driver was killed and he himself was wounded. Alexander Litvinenko led the FSB probe into the incident, blaming Berezovsky's increasing success in the Russian automobile industry.

Berezovsky's involvement in the Russian media began in December 1994, when he took over Ort Television (see Channel One (Russia)) to replace the failing Soviet Channel 1. ORT's CEO, Vladislav Listyev, was chosen by the well-known anchorman and producer Vladislav Listyev. Listyev was assassinated three months later during a ferocious fight for a slew of advertising sales. Berezovsky was interrogated as part of the police probe, as well as others, but the killers were never found.

ORT became a significant asset of the reformist camp under Berezovsky's leadership as they prepare to face communists and nationalists in the forthcoming presidential elections.

Berezovsky and Patarkatsishvili, Berezovsky and Patarkatsishvili supported Roman Abramovich in acquiring Sibneft, the country's sixth-largest oil company, which made up the majority of the company's income, from 1995 to 1997, during the turbulent loans-for-shares privatization auctions. Berezovsky, a financier who had declined an invitation to participate in the acquisition, disclosed it in an article in The Washington Post in 2000.

With his close associate Nikolai Glushkov becoming Aeroflot's CFO in 1995, he played a key role in a management reshuffle at Aeroflot and was instrumental in its corporatization. Sibneft would partner with Mikhail Khodorkovsky's Yukos to create the world's third-largest oil company. Due to lower oil prices, the transaction was cancelled five months later.

Berezovsky became a member of the Kremlin's inner circle in 1993 by arranging for the release of Yeltsin's memoirs and befriended Valentin Yumashev, President President Ben Gustavsky's ghost-writer.

Berezovsky, a lialist, and others met in January 1996 at the World Economic Forum in Davos, forming a coalition later known as the "Davos Pact" to fund Boris Yeltsin's campaign in the forthcoming presidential elections. "Berezovsky masterminded Boris Yeltsin's re-election in 1996, according to a later profile by The Guardian. Yeltsin's campaign was funded by him and his billionaire allies.

Berezovsky, a leading advisor to Yeltsin, is allied with Anatoly Chubais, has been active in the summer of 1996, battling a group of hardliners led by General Alexander Korzhakov. One night in June, in the drawing room of Club Logovaz, Berezovsky, Chubais, and others, conspired against Korzhakov and other hardliners to oust him from office. Yeltsin dismissed Korzhakov and two other hawks on June 20, leaving the reformers' team in complete control of the Kremlin. Firing them was tense, although Korzhakov discovered two of Yeltsin's campaign managers holding US$500,000 cash without invoices out of the presidential administration building just a few days before.

Yeltsin came first in the first round of elections on June 16, 1996, after forming a tactical alliance with Gen. Alexander Lebed, who came third. He defeated Communist Gennady Zyuganov in a run-off election on July 3rd. His triumph was due in large part to Gusinsky and Berezovsky's (NTV and ORT) and the funds from the business elite. Berezovsky was named "public spokesman and chief lobbyist for this emerging elite, who went from the shadows to respectability in a matter of brief years," according to the New York Times.

General Alexander Lebed was sacked from the position of National Security Advisor on October 17, 1996, amid allegations that he was planning a coup and secretly instructing a private army. Lebed immediately accused Berezovsky and Gusinsky of engineering his dismissal, forming a alliance with disgraced General Alexander Korzhakov. Yeltsin's Chechen policy was in jeopardy after Lebed, the architect of the Khasavyurt peace deal, was dismissed. Yeltsin appointed Ivan Rybkin as his next National Security Advisor and named Berezovsky Deputy Secretary in charge of Chechnya with a mandate to monitor the implementation of the Khasavyurt Accord, which is essentially, the withdrawal of Russian forces, the negotiation of a peace treaty, and the holding of a general election. Berezovsky made news when he negotiated the release of 21 Russian policemen held hostage by the warlord Salman Raduev, despite attempts by radicals from both camps to destabilize peace talks.

Yeltsin and Maskhadov signed the Russian-Chechen Peace Treaty in the Kremlin on May 12, 1997. Berezovsky outlined his priorities for Chechny's economic reconstruction, particularly the building of a pipeline for transporting Azerbaijani oil, during a press conference in Moscow. He has called on the Russian business community to assist in the republic's revival, announcing his own donation of US$1 million (some reports mention US$2 million) for a cement factory in Grozny. This payment would come back to haunt him years later, when he was accused of funding Chechen terrorists.

Berezovsky vowed to continue his activities in Chechnya as a private individual and maintained contact with Chechen warlords following his dismissal from the Security Council. He was instrumental in the freeing of 69 hostages, including two Britons, Jon James and Camilla Carr, who travelled in his private jet to RAF Brize Norton in September 1998. In an interview with Thomas de Waal in 2005, he revealed the presence of the British Ambassador to Russia, Sir Andrew Wood, and that his former negotiation partner, Movladi Udugov, helped organise the British people's release.

In the spring of 1999, Berezovsky had a phone call with Movladi Udugov, six months before the war in Dagestan began. On the 10th of September 1999, a transcript of that talk was leaked to a Moscow tabloid and seemed to mention the would-be militants' invasion. Ever since, it has been the object of a lot of rumors. In interviews with Berezovsky and Goldfarb, Udugov suggested coordinating the Islamists' incursion into Dagestan in order to topple the Chechen president Aslan Maskhadov and establish a new Islamic republic that would be anti-American but friendly to Russia. Berezovsky said he disapproved of the proposal but revealed that the government had been overtold by Prime Minister Stepashin, who praised the government's overture to prime minister Stepashin. "Udugov and Basayev," he said, "conspired with Stepashin and Putin to sparked a war against Topple Maskhadov." "The deal was for the Russian army to stop at the Terek River," he said. Nevertheless, Putin double-crossed the Chechens and initiated an all-out war."

Berezovsky and Tatyana Dyachenko travelled to Nizhniy Novgorod in March 1997 to convince Boris Nemtsov, the city's governor, to join Chubais' economic staff, which was then referred to as the Young Reformers' government. This was the last concerted political move of the "Davos Pact" (see above). Four months later, the group broke into two cliques fiercely competing for Yeltsin's support. The confrontation was triggered by the privatization auction of communications service Svyazinvest, in which Onexim bank of Chubais' faithfulist Vladimir Potanin, backed by George Soros, clashed with Gusinsky, which is affiliated with Spanish Telefónica. Chubais and Berezovsky's first commercial clash erupted into a contest of political wills.

Potanin's victory sparked a bitter media conflict in which ORT and NTV accused the Chubais group of arranging the auction in favour of Potanin, while Chubais charged Berezovsky with abusing his government authority to advance his company interests. Both sides appealed to Yeltsin, who had predicted a new age of "fair" privatization "based on stringent legislative legislation and allowing no deviations." Both teams lost in the end. Berezovsky's newspapers revealed a dishonest plan by which a publishing house owned by Onexim Bank paid Chubais and his company hefty advances for a book that was never published. The scandal resulted in the purge of Chubais' loyalists from the government. Chubais retaliated by persuading Yeltsin to ban Boris Berezovsky from the national security council. On November 5, 1997, Berezovsky's term on the Security Council came to an end. Soros called the Berezovsky-Chubais war a "historic occurrence" in the case where I would have never suspected if I hadn't seen it myself. I saw a gang of the people in the boat float along the bank's edge at a waterfall. He argued that the reformist camp never recovered from the wounds he suffered in this war, setting the political agenda for conservative nationalists and eventually Vladimir Putin.

Berezovsky established the "Triumph" award in 1991, recognizing outstanding Russian writers, musicians, actors, producers, and ballet dancers.

Boris Berezovsky, a 1998 English aid worker who had been imprisoned in Chechnya for 14 months, has been seen in the documentary series Captive, as he was instrumental in the release of two English aid workers who had been held hostage for ransom.

Berezovsky made a surprising political comeback in 1998, beginning with his appointment in April 1998 as the Commonwealth of Independent States' executive secretary. He arrived in the middle of a new informal power group, the "Family," a close-knit group of advisors around Yeltsin, which included Yeltsin's daughter Tatyana and his chief of staff, Yumashev. It was reported that no vital government meeting could be held without the Family's help. By 1999, two of Berezovsky's associates, his former AVVA partner Alexander Voloshin, who replaced Yumashev as Yeltsin's chief of staff, and Roman Abramovich were both present in the family.

The Family's greatest concern was finding a "electable" replacement to Yeltsin to counter the then prime minister's aspirations, who was leaning to more statist positions. The two last years of Yeltsin's presidency were dominated by political debates between the Family and Primakov's camps.

Five officers of the FSB, led by Lieutenant Colonel Alexander Litvinenko, exposed an alleged plot by their superiors to assassinate Berezovsky in November 1998.

Yury Skuratov, Russia's Prosecutor General, opened an investigation into embezzlement at Aeroflot and released an arrest warrant for Berezovsky, who called the probe politically motivated and orchestrated by Primakov in April 1999. Nicholas Glushkov, Aeroflot's former GM, later revealed that the conflict with Primakov resulted from Berezovsky's management team's failure in the Russian Foreign Intelligence Service, which Primakov inherited before becoming prime minister, over the firing of thousands of spies who used Aeroflot as a front group in Soviet times. The arrest warrant was suspended a week later after Berezovsky was called into question by the authorities. No charges were brought. Sergey Stepashin was fired from Primakov's government shortly after and replaced him as the new prime minister shortly thereafter.

Vyacheslav Animov (Russia) praised Berezovsky and headed Berezovsky's security service, but not so much.

Vladimir Putin's meteoric rise from virtual anonymity to the Russian presidency in the course of a few short months of 1999 has been credited to his closeness with the "Family" as a protégé of Berezovsky and Yumashev. The family had persuaded Yeltsin to nominate Putin as his political successor and presidential nominee by the end of 1999.

Berezovsky's friendship with Putin goes back to the early 1990s, when the latter, as Deputy Mayor of St. Petersburg, assisted Logovaz in the establishment of a car dealership. They enjoyed friendly relations; Berezovsky took Putin skiing with him in Switzerland on occasion.

When Berezovsky's political reputation was uncertain as a result of his tus with Primakov over Aeroflot, Putin, then President of the FSB, made a brave gesture of friendship by attending a birthday party for Berezovsky's wife in February 1999. On that night, Putin told Berezovsky, "I certainly do not care what Primakov thinks of me." That was the start of their political relationship. Putin reportedly visited a villa in Spain befaring Berezovsky on up to five occasions in 1999, according to the Times.

The Berezovsky family escorted Berezovsky to Biarritz, where Putin was holidaying, to persuade him to accept the position of prime minister and the role of heir apparent in mid-July 1999. Yeltsin sacked Sergei Stepashin's government and named Putin prime minister despite allegations that Berezovsky had orchestrated the change on September 9.

Former Prime Minister Evgeny Primakov and Moscow Mayor Yuri Luzhkov were among Putin's top critics, backed by the Fatherland-All Russia alliance. Berezovsky was instrumental in the formation of the Unity party in 1999, with no ideology other than Putin's support. Later, he revealed that Unity's funding was provided by Aeroflot, with Putin's knowledge and permission. Berezovsky ran for office as a loyalist in the 1999 election and gained a seat in the Duma, representing the North Caucasian republic of Karachaevo-Cherkessia.

Berezovsky's ORT TV served as a highly effective propaganda machine for the Putin camp during the Duma election campaign, using a combination of investigative reporting and broadcasting to denigrate and mock Putin's opponents, Primakov and Luzhkov, who were specifically condemned for undue interference with the media. Unity also received a surprisingly high vote in the polls, paving the way for Putin's re-election in spring 2000.

Berezovsky's differences with Putin were revealed three weeks into Putin's presidency. Berezovsky and Abramovich were spotted together at Putin's invitation-only inauguration ball in Moscow on May 8, 2000. However, Berezovsky slammed the president's constitutional reform, which would give the Kremlin the authority to depose elected governors on May 31. Berezovsky resigned from the Duma on July 17, saying he "did not want to be interested in the country's decay and the restoration of an authoritarian regime." Berezovsky's media chastised Putin for his handling of the Kursk submarine's sinking in August, blaming 118 sailors' deaths on the Kremlin's reluctance to accept foreign assistance. Berezovsky argued in September that the Kremlin had threatened to expropriate his interests in ORT by announcing that he would put his trust in a trust managed by influential intellectuals.

Berezovsky argued that in the absence of a strong civil society and middle class, capitalists "can sometimes be required to interfere directly in the political process" of Russia as a counterweight to ex-Communists "who fear democracy and are dreaming of regaining lost positions." Berezovsky took court action against journalist Paul Klebnikov, who was accused of a number of offences, in the United States. In October, Putin revealed in Le Figaro that he would no longer tolerate opposition of the government by media controlled by the oligarchs. "We will destroy those tools that allow this blackmail if necessary," he said. In response to a Berezovsky query, he warned that he had a "cudgel" in store for him. "The state has a cudgel in its hands that can be used only once, but on the head." We haven't used this cudgel yet. We've just brandished it... But, we won't hesitate to use it again the day we get really angry.

Russian investigators revived the Aeroflot fraud probe in the same month, and Berezovsky was interrogated as a witness. Berezovsky, a tourist in the United States, refused to answer further questions and announced that he did not return to Russia because of "constantly increasing pressure on me personally" by the authorities and President Putin. "I'm being compelled to choose whether I want to become a political prisoner or a political immigrant," the narrator said. Berezovsky said that Putin had made him a suspect in the Aeroflot case simply because ORT had "spoken the truth" about the submarine Kursk's sinking. Nikolai Glushkov was arrested in Moscow in early December, and Berezovsky dropped the plan to place ORT stake in trust in trust.

In a letter to The New York Times, the Russian government carried out a systematic takeover of privately owned television networks, in the course of which Berezovsky, Gusinsky, and Patarkatsishvili lost the bulk of their media empires, causing one of them to warn of Russia "turning into a banana republic." Berezovsky and Patarkatsishvili sold their ORT stake to Roman Abramovich, who then ceded editorial responsibility to the Kremlin in February. Berezovsky later announced that there was a veiled suspicion that Nikolai Glushkov would be released from jail as a result of the contract, a promise that was never fulfilled. The government took over Vladimir Gusinsky's NTV in April. Berezovsky then proceeded to buy a majority stake in TV-6, named Patarkatsishvili as its Chairman, and offered paid to hundreds of locked out NTV journalists. Patarkatshishvili was immediately subjected to a police probe and fled the country. TV-6 (Russia) was liquidated by a Russian arbitration court in January 2002. The liquidation of TV-6 was triggered by LUKoil, a partly state-owned minority shareholder, who used a section of legislation that was almost immediately repealed.

Berezovsky and Patarkatsishvili, a 2001 behemoth who received a US$1.3 billion commission from Roman Abramovich, stopped their participation in Sibneft. This transaction was the subject of a pending litigation in the United Kingdom commercial courts, with Berezovsky arguing that he was under pressure to sell his interest to Abramovich at a fraction of the true value, which the court dismissed.

Berezovsky sold the Kommersant ("The Businessman") newspaper and his remaining Russian assets in 2006.

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