Death of a Dissident - Alex Goldfarb [53]
On July 26 the winning bid was announced: Soros and Potanin had bought one-fourth of the company for $1.88 billion. It touched off a full-blown scandal. Gusinsky, who had bid $1.71 billion, cried foul. He claimed both that the auction was fixed and, in something of a contradiction, that Chubais had personally promised him that his bid would be uncontested under the Davos Pact rules. Berezovsky backed Gusinsky. Chubais retorted that everything had been honest, and that it was the start of a new era of squeaky-clean capitalism.
That was the end of the Davos Pact. For the three ensuing months the losers, using the full force of their media empires, attacked the winners with charges of cronyism. They painted a picture of a state in the pocket of Potanin, the fat-cat banker, who in turn relied on the patronage of the infamous Wall Street speculator, George Soros. The fight became a national issue, tearing the Yeltsin administration apart, paralyzing the government. Opinion polls indicated a steady decline in the credibility of “the young reformers.”
I remember talking to Boris at that time, concerned that the conflict would bring down the government, boosting the Communists and nationalists. Why such a fuss about a phone company for Gusinsky?
He gave me an angry look: “That’s not the point. I don’t care whether Goose gets it or not. And it’s not about fair play: any outcome would have been fixed. It’s about whether Tolya [Chubais] can have it his way because he decided that he is the state. Fucking Bolshevik.”
As the row deepened, it became obvious that the fight was not between Gusinsky and Potanin. They were just surrogates for the two epic figures of Yeltsin’s reign: Chubais and Berezovsky, the ultimate technocrat and the supertycoon. It was a political clash of opposing views on the role of the oligarchs in the new Russia.
According to Boris, the oligarchs who emerged from the Davos Pact had to remain major players in Russian politics for years to come. It was their historic mission. They are the natural opponents of the Communists and secret services, he said. They are intrinsically pro-democratic and they can get things done. They are the best guarantors of freedom. In other words, what is good for LogoVAZ is good for Russian democracy.
Chubais believed just the opposite: businessmen should stick to business. Oligarchs, who had been created by the state’s largesse in the first place, should be tightly controlled and even subordinate to the state. Remarkably, in less than two years, Chubais’s views had turned 180 degrees, from sermons of laissez-faire capitalism to praise of state control.
Looking back, this was the point where my disagreement with George Soros took root. I was squarely on Boris’s side. George was with the “new” Chubais.
Russia, I tried to explain to George, had no tradition of freedom. Its democratic institutions were still weak. There was no middle class or civil society. For centuries, Russia’s troubles came from unrestrained power in the Kremlin. In this context, any alternative center of power that could counterbalance the state, even the self-serving oligarchs, were agents of progress. They substituted for the missing institutional checks and balances.
To George, however, Boris was the incarnation of unrestrained capitalism, the evil he took on in his Western crusades. He looked at Russia through the prism of his article “The Capitalist Threat,” published that year in the Atlantic Monthly, where he asserted that “the main enemy of the open society … is no longer the communist but the capitalist threat.”
Moscow, August 19: NTV President Igor Malashenko discloses that his station paid over $1 million to free five journalists kidnapped in Chechnya three months