Once Upon a Time in Russia

by Ben Mezrich

  The death of Vlad Listyev had struck Russia like a sledgehammer. As the details of his assassination emerged, the entire nation was gripped by a sense of horror and sadness, followed by anger. That something like this could happen to such a man so beloved—it was truly unthinkable. The day after the murder, walking through the streets of Moscow on his way to Berezovsky’s office, Litvinenko had passed groups of people dressed in black, huddled in deep and sorrowful discussion. Pictures in the newspaper had shown throngs of shocked and sobbing fans of the journalist lining the barricades in front of Listyev’s apartment building, where the crime had taken place. President Yeltsin himself had declared a day of mourning, and all the television stations had gone dark. ORT had replaced its regular programming with a single photo of the anchorman, captioned by the simple statement Vlad Listyev has been killed.

  The press conference Yeltsin had called had been much less sedate. Yeltsin himself had made an appearance, and had opened the event with a fiery, podium-pounding statement, taking full responsibility for an act that seemed to mark a true change in the barbarism that had taken over the streets of the new Russia: “I bow my head, as a man who has not done enough to fight banditry, corruption, bribery, and crime.”

  Litvinenko had seen his fair share of atrocities—murders, bombings, mutilations—but this was clearly a watershed.

  One didn’t need to be an FSB agent to see that Vlad’s death was a professional assassination and not a robbery gone bad. Listyev had been shot twice from behind, once in the arm and once in the back of the head. His assailants had not relieved him of more than $1,500 in American currency—and the million-plus rubles—that he’d been carrying in his overcoat.

  Litvinenko had no idea who had murdered the most famous man in Russia. He was not involved in the investigation, and he only knew what he had read in the newspaper—that the journalist had recently been put in charge of ORT by Berezovsky and his business partners, that he was determined to root out corruption in the television business. That information alone told Litvinenko there would be a long list of potential suspects. He had no doubt that the tense and somber moment he and his boss were having was being replayed everywhere, in kitchens, dining rooms, and living rooms all across the country. A single murder, and it felt like the ground had shifted.

  Even so, Litvinenko was not mentally prepared when the door to Berezovsky’s office was suddenly flung inward, and two policemen stepped inside, pushing their way past a pair of the Oligarch’s bodyguards. Both men were wearing uniforms from the local Moscow directorate, and both had holstered sidearms. The lead officer was heavyset, his second thin and tall, and both were entirely focused on the businessman behind the desk. If they even noticed Litvinenko’s presence, they didn’t acknowledge him.

  “Boris Berezovsky,” shouted the lead officer. “Please stand up. We have orders to bring you in for questioning, on the matter of the murder of Vlad Listyev.”

  Litvinenko felt his stomach knot. He had no idea who had sent these men to Berezovsky’s office, or how they had worked their way through the Logovaz Club without being stopped by the phalanx of bodyguards inside. Nor did he know anything about the ongoing investigation into the anchorman’s assassination—whether there were any real suspects, whether any arrests had already been made.

  Litvinenko did know that the two policemen in front of him were cogs, not levers. Their uniforms meant they had come for Berezovsky at somebody else’s order. If they left this office with Berezovsky in tow, there was a good chance Litvinenko was going to be out of a job.

  He didn’t have time to think; in a split-second decision, he took a step out from behind the desk, squaring his shoulders as he faced the two officers. The men shifted their attention to him from Berezovsky, their faces puzzled. They had no reason to recognize him. Although he had taken part in a number of investigations into terrorist-related incidents in the city, his position with the FSB did not place him in direct contact with the local police very often. But his demeanor certainly communicated to the two policemen that he wasn’t intimidated by their uniforms.

  “I believe there’s been a mistake.”

  The lead officer turned back to Berezovsky, a hand resting on his holstered automatic.

  “Boris Berezovsky,” he repeated. “We have orders to take you in.”

  Litvinenko could see the red splotches rising in Berezovsky’s cheeks. If Litvinenko didn’t do something quickly, this was going to escalate.

  “If you have a warrant for Mr. Berezovsky’s arrest, please hand it over.”

  The officer looked back at Litvinenko, whose fingers tightened against his weapon. Litvinenko was now certain: there was no warrant, there were no arrest orders. The Moscow Police was a fiefdom, and it was no secret that Gusinsky, Berezovsky’s main rival, was in league with the chief of police. Perhaps this moment was payback for Faces in the Snow. Gusinsky’s roof hadn’t been able to protect him then, but now he was using Listyev’s tragic murder to strike back.

  Litvinenko made another decision—and slowly unhooked the clasps of his holster, partially drawing his gun, his fingers loose against the grip.

  “You have no right to take this man anywhere.”

  The two policemen stared at him in shock. The air in the room became tight as a coiled snake.

  Then the lead officer’s hand seemed to loosen against his own holster.

  “Who are you?”

  “My name is Alexander Litvinenko. I’m an FSB officer, and I am one hundred percent certain that Mr. Berezovsky was not involved in this tragic murder.”

  With his other hand, Litvinenko retrieved his official papers from his shirt pocket and offered them to the policemen. He kept his gun loose, as the lead officer inspected the documents.

  “We have our orders,” the second officer tried again, lamely.

  “Yes, we all have our orders,” Litvinenko responded. “Mr. Berezovsky is an innocent man under the protection of the FSB. If you would like to take it up with my superiors, feel free to make an appointment.”

  Another moment passed in silence—and then the two police officers turned and walked out of the room. It wasn’t until their footsteps had receded that Litvinenko felt his chest relax and noticed the rivulets of sweat running down the back of his neck. FSB, Moscow Police, Oligarchs, Politicians: in a moment like the one that had just transpired, none of the labels really mattered. What mattered was that a gun, even partially drawn, always trumped a gun in a holster.

  Berezovsky whistled low, and then came up out of his seat. He beckoned Litvinenko over—and then embraced him in a warm hug.

  Then he reached for the phone on his desk.

  “To accuse me of this tragedy, it is unthinkable.”

  He looked at Litvinenko as he dialed the Kremlin.

  “You have shown me something today I will not forget.”

  Litvinenko’s fingers shook as he resecured his gun.

  Before tonight, he had a job. Now he had a krysha.

  CHAPTER TEN

  * * *

  January 1996,

  Logovaz Club

  MARINA GONCHAROVA HAD ALWAYS considered herself an extremely practical woman. It was perhaps the main reason she had become an accountant in the first place; there was something wonderfully reassuring about numbers corralled into equations, and systems that functioned along logical and mathematical frameworks. That didn’t mean she had an aversion to creative thinking; being an accountant in modern Russia necessitated a certain amount of creativity. But nothing in her half decade as one of Roman Abramovich’s most trusted number crunchers could have prepared her for the utterly surreal moment that was now unfolding in front of her.

  Which was probably why she quickly decided to approach the situation in a very narrow, practical way: a one-hundred-five-pound woman in a pantsuit, long blond hair tied up in a bun, hauling a forty-three pound suitcase up a flight of stairs.

  Just getting the damn thing from the armored car parked out front, through the back s
ecurity entrance of the Logovaz Club, had taken the help of two of the bodyguards her employers had sent with her from Abramovich’s offices. Unfortunately, the Logovaz’s own security team hadn’t been keen on letting her men escort her into the building. So here she was now, on her own, dragging what felt like a ship’s anchor wrapped in polyester, step by torturous step. The Logovaz security men now standing by, gawking at her, had offered to help—one of them had even made a grab for the suitcase—but Marina had slapped his hand away. She didn’t know these men, and the last thing she was going to do was let someone else handle the package she had been sent to deliver.

  She did her best to tune out the men watching her, as she focused on her efforts, the muscles in her forearms and thighs straining against the expensive material of her suit. She had taken only a few steps before her progress was suddenly interrupted by a young man with slicked-back hair and a tailored blue jacket rushing down from the top of the steps and skidding to a stop in front of her.

  “Excuse me, miss. Can I help you?” he asked, his voice nearly cracking.

  Marina didn’t know the young man by sight, but she was pretty sure his name was Ivan. She had been told that one of Berezovsky’s assistants would meet her at the door—and yet, even so, she wasn’t about to hand off the heavy suitcase to this kid whom she’d never met before.

  “I have a package that I need to pass on to Mr. Berezovsky,” she said, “And as you can see, it’s rather large. So it’s going to take me some time.”

  Ivan held out a thin, pale hand.

  “You can leave it with me.”

  Marina shook her head, her bun bouncing with the motion.

  “No. I have to transfer this package myself. I have to pass this on personally, namely to Mr. Berezovsky.”

  Ivan didn’t seem pleased at all—but Marina didn’t really care. She was an accountant, this man was an assistant—and the contents of the suitcase were well beyond both their responsibility levels. Marina knew this for certain, because she had packed the damn thing herself. And that, alone, had been an experience she was certain she would never forget.

  There was a frozen, awkward moment, while Ivan tried to figure out what to do and continued to block her progress up the stairs. Finally he shrugged and guided her forward toward the lobby of the club. At least one of the nearby security men snickered at the sight of the slight young woman towing a heavy suitcase—while the impotent assistant simply led the way—but Marina ignored him. She knew they were all bit players in this farce, witnesses who saw nothing that their employers didn’t want them to see, who heard nothing but what they were told to hear.

  Even so, it was hard for Marina not to feel self-conscious, as they slowly worked their way through the various floors of the Logovaz. She had never been in this place before and felt out of place in the crowded club, especially around the expensive suits of the businessmen and designer cocktail dresses of their guests. Marina couldn’t help but wonder if Ivan found the moment as surreal as she did; then again, working for a man like Berezovsky, he had probably seen many things even more bizarre than an accountant pulling a heavy suitcase.

  The truth was, moments like these were part of the new way of doing business in Russia, although this instance was an extreme. As a trusted employee of Roman Abramovich for many years now—and in her new position, at the “formation in process” of Sibneft—she had already experienced her share of surreal events.

  History would one day judge the goings on of the preceding weeks. A combination of applied genius, force of will, and the ability to navigate through a corrupt system—all perfectly executed by two men. While they brought very different skill sets, they had managed to create one of the largest oil companies in history almost out of thin air.

  They say that in business everything is timing, and in this case, the timing could not have been more perfect; Abramovich, with his idea of combining the two state-owned businesses—the oil refinery in Omsk and the production company in Noyabrsk—had caught Berezovsky at exactly the right moment; falling directly in the midst of his privatization of ORT, in an effort to advance the candidacy of Yeltsin in the upcoming election.

  The months that had followed the Caribbean cruise had only inflated Berezovsky’s position and the potential of his ORT proposal—as Yeltsin’s own status had grown more precarious. The president was facing a real threat in the Communist candidate Gennady Zyuganov—while Yeltsin’s health had begun to deteriorate at an even faster pace. There were always rumors of heart issues, even impending surgery. Without ORT and Berezovsky’s promise to use the network as a publicity tool, Yeltsin might lose the presidency. And if the Communists took over, it would be a disaster for the business community.

  After the cruise, it had been relatively easy for Berezovsky to convince his contacts in the Yeltsin government that for ORT to continue its operations and campaign for Yeltsin, the network would need a massive and sudden infusion of money—especially after the freezing of advertising that Vlad Listyev had enacted right before his untimely death. Like Yeltsin, ORT was in a precarious state.

  Privatizing an oil company would essentially give ORT—and Yeltsin’s campaign—a bottomless war chest. Once the concept had been accepted, it had just become a matter of putting the pieces in place. The first step: Abramovich and Berezovsky had needed to convince the Red Directors who ran the state-owned refinery and the production plant to agree to the unification of the company—under new management.

  Since Abramovich had previously established relationships with the Red Directors—Viktor Gorodilov in Noyabrsk, and Ivan Litskevich at the refinery in Omsk—from his years in oil trading, he began the process of convincing the two men that he could indeed run the company in a way that would benefit them all. Eventually, Berezovsky had joined in on the efforts, using his status to further push the directors in the right direction.

  Gorodilov had acquiesced fairly easily, but Litskevich had resisted; at one point he seemed to be becoming a true roadblock to the endeavor. Concerned, Berezovsky had written a personal letter to the director, asking him to trust Roman Abramovich as he obviously did himself. Thankfully, the letter had been unnecessary, and Berezovsky’s status and political capital hadn’t been needed to convince the man to change his mind. In the sort of coincidence of timing that seemed to happen more and more often in modern Russia, at some point during the weeks the merger was being discussed, Litskevich had organized a late-night party for himself and an attractive young woman on the banks of the Irtysh River; halfway into the tryst, Litskevich decided to try to impress his date by jumping into the frozen waters in front of them—and almost instantly after hitting the 7-degree water, had a heart attack and drowned. His driver—one of the few witnesses to the event—died in a bar fight shortly afterward.

  Thankfully, Litskevich’s replacement had been more acquiescent, and soon both Red Directors were ready to play ball. The pieces for privatization were in place.

  The privatization system had been honed through practice in the short time since Berezovsky had fought his way to a stake in ORT, beginning in late fall of 1994. Since then, through 1995 and into 1996, the Russian government, desperate for funds to shore up its abysmal financial situation, had embarked on what was commonly known as a “loans for shares” program. Simply put, shares of state owned conglomerates were offered as collateral for “loans” that were in turn auctioned off for cash, usually to privately held banks. When the state defaulted on these loans—which, from the very beginning, it fully intended to do—the bank either became the owner of the shares, or sold them in a prearranged transaction to a new private owner.

  These “loans for shares” auctions had already transferred some of the country’s largest companies into the hands of a few lucky souls. The largest nickel manufacturer in Russia had been traded for 170 million dollars—and was now a private company that would soon be worth more than one billion dollars. Mikhael Khodorkovsky, a brilliant young physicist who had gone into banking, among other
things, had achieved a nearly eighty percent controlling stake in Yukos, one of the country’s largest oil companies, for around 350 million dollars—a deal that would soon make him the richest man in Russia and, indeed, one of the richest men in the world. There was no telling what Yukos would eventually be worth.

  At first glance, to an accountant such as Marina—a woman who understood the new Russia and what it was faced with—selling off state resources to men with money was a desperate, but not intrinsically corrupt effort. Western buyers had no interest in dealing with Russia; they found the market too dangerous. The government was nearly broke, and without a cash infusion, there was a real chance it would go belly up. Anatoly Chubais, who had spearheaded the privatization program in the first place, believed that the quicker the state sold off companies to private owners, the less likely the Communists could undo the progress they were making. He firmly believed that each sale was like a nail in communism’s coffin. “We must sell it all,” he had said on various occasions—believing that if they sold enough assets, the situation would be irreversible.

  And the auctions themselves seemed fair on the surface—but Marina understood this wasn’t truly the case. The transition to capitalism had left her country running under a system of patronage, krysha, and graft; it was not going to become an egalitarian market overnight. The auctions that decided the outcomes of the “loans for shares” offers were usually locked up beforehand.

  The auction that resulted in the right to manage Sibneft was no different, and it took significant behind-the-scenes maneuvering to make sure that Abramovich and Berezovsky had been the only real bidders for a controlling situation in the newly formed oil company. As the final days approached, there had still been two other interested parties; Berezovsky sent his business partner, Badri Patarkatsishvili, the Georgian, to speak with them, and the situation was all stitched up in short order. Though Abramovich carried two bids in his pocket to the auction—one much higher than he could actually afford—he was able to win right around the initial offering, for 110 million dollars.