The Russian Oligarch

By Victor Bellini

During the immediate post-Soviet years the privatization of state assets gave birth to a number of billionaires, later known as Oligarchs. Using their wealth, some of them developed political ambitions and stopped at nothing to gain power. A satellite telecom project became an acquisition target, needed to seize control of all national communications for an imminent coup d’état.

• Language: English
• Publisher: Victor Bellini
• Release date: Jul 14, 2013
• ISBN: 9781301267071

Victor Bellini

Victor or Vittorio Bellini - a retired business executive - received his early education in Italy and later in England and Canada. He joined a multinational corporation and was fast-tracked to senior management postings in several countries. In his retirement he drew from his international knowledge to create engrossing stories in global settings. The author lives in Toronto, Ontario, Canada.

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THE RUSSIAN OLIGARCH

The passion of a woman seeking justice in unsettled Russia

(Revised)

THE RUSSIAN OLIGARCH

By

Vittorio Bellini

Copyright © 2013 Vittorio Bellini

All rights reserved

Smashwords Edition

Also by Vittorio Bellini

*****

In the Pentalogy

Adventures in Multinational Business

- The Libyan Affair

- The Casablanca Connection

- The Mexican Seduction

- The Russian Oligarch

- The Chinese Manuscript

Other books by the same author

- A Secret

- One-Night Stands

- Soul Mates Online

- Sex in Vienna

- La Mano del Destino (in Italian)

Available in digital and paperback formats

from most online bookstores

*****

Foreword

This is the fourth of a pentalogy of novels inspired by business cases and love affairs in different countries during the years 1985-2002.

The protagonist, Gene Toner, is a senior executive of a multinational corporation. He is tall, slim, good-looking, refined, charming and well-spoken, with a weakness for the gentle sex. His favourite drink is Campari, but he also indulges in Martinis with the right company.

Gene is an expert in opening up new marketplaces in emerging economies around the world.

Set in 1993-94 the story deals with the political upheaval in Russia and the rise of the so-called Oligarchs -- citizens who became super wealthy by taking advantage of undervalued state assets during the break-up of the Soviet Union.

A beautiful and passionate woman defends her honour and seeks justice in the aftermath of the Soviet collapse, when Russia was still unsettled.

*****

Disclaimer:

Except for some factual elements of a satellite communications project undertaken jointly by Russian and Canadian companies, and except for some historical facts related to the privatization of Russian state assets, the story does not reflect actual events that may have taken place or personalities that may have lived at the time and in places described in this novel. Most Russian companies, such as NPO, Intersputnik, Informcosmos and others are real, but all characters are fictitious and any resemblance with reality is purely coincidental.

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The Oligarchs:

Oleg Lamitov, in Moscow

Yuri Bereshink, Lamitov’s partner

Irina Bereshink, Yuri’s wife

Leopold Bykov, in St Petersburg

Vladimir Nossenko, in London

Protagonists:

Galina Marinova, THE heroine

Gene Toner, CRT President

Boris Karmitov, Galina’s husband.

Michail Marinov, Galina’s brother

Other main characters:

Anton, Project Manager in Moscow

Misha, Anton’s assistant

Olga, interpreter in Moscow office

Yevgeny Reshetvich, NPO President

Yuri Koptev, RSA President

Fyodor Kilov, RSA Director

Anatoly Gagaliev, Intersputnik President

Sergei Kalamitov, Informcosmos President

Karen, Gene’s secretary/assistant in London

Ralph Light, Eastel CEO

Doug Stiller, EBRD Director

Hans Luger, VP Solomon Bros

Russian companies:

NPO: The largest Russian builder of space rockets

Intersputnik: Sells satcom services worldwide

Informcosmos: Controls satellites in space

Canadian companies:

CRT: Fictitious CanRusTel

Eastel: Fictitious Canadian multinational

Teleglobe: Long distance service provider

Government Organizations:

RSA: Russian Space Agency

ESA: European Space Agency

CSA: Canadian Space Agency

KGB: Former Russian secret service

FSB: Replaces KGB

FSU: Former Soviet Union

EBRD: Euro Bank for Reconstruction & Dev’t

Fictitious underground organizations:

EAR: Export Agency of Russia

DDR: Democratic Defenders of Russia

Locations:

Toronto: HQ of Eastel

London: CRT executive offices

Moscow: NPO/CRT project offices

Moscow: RSA, Intersputnik, Informcosmos HQ

Krasnoyarsk (Siberia): NPO headquarters

Prologue

Despite valiant attempts by President Gorbachev to keep the Soviet Union together by enacting major democratic reforms, the dissolution of the Soviet Union could not be stopped. It started in 1989, soon after the fall of the Berlin Wall. Russia was one of the first of sixteen former provinces to quit the Union. It became known as the Russian Federation, with Boris Yeltsin as President.

One by one all other Provinces declared independence and were so recognized by the United Nations. It all happened too fast, in some sort of domino effect that made it impossible to plan a graceful devolution of powers and allocation of assets. The USSR was built on Marxist principles, with an integrated industrial base. It had established various ‘centres of excellence’ in each province to serve the needs of the Union as a whole and realize substantial economies of scale. The idea made sense on paper, but never worked in practice.

Without proper planning the breakup engendered major economic and structural problems, as those ‘centres of excellence’ had to be dismantled and parcelled out in pieces, thereby killing whatever synergies and control points there used to be. The result was a lot of unemployment and no money in state coffers to look after them. On the other hand, a few very smart people took advantage of the situation and enriched themselves by exploiting state assets given away as part of a quick privatization process.

By 1994, after five years in power, President Yeltsin had lost all of his former mojo and became close to a laughing stock on the international scene. His drinking habit worsened and his decision-making abilities were badly diminished. The Russian economy was in free fall, with a lot of people begging in the streets for survival. Many state institutions, including the military, could not afford to pay their staff for months, while in the new private sector too many workers were let go by ruthless owners hungry for profit. Russia had never before been in such dire straits.

It was then widely believed that Yeltsin was out of his depth and was being manipulated by powerful individuals, widely believed to be the Oligarchs. It was easy for them to use their wealth to corrupt people in command at a time of national penury.

Such was the situation in Russia by the time it opened its doors to commercial deals with the rest of the world. It wanted to be seen as a democratic, free-market, country but it was not yet so. Attracting foreign investments in that political turmoil was no easy feat. The scepticism was rampant among western businessmen but the opportunities for growth were enormous. Slowly, some western companies took the risk and joined Russian partners in Joint Ventures of major financial significance and potential rewards.

It was during that turbulent period that I found myself dealing with Russian colleagues of extraordinary talent and technical abilities, but struggling to survive.

*****

Chapter One

The Network

In late 1994 I, Gene Toner, was in Moscow to present a major satellite communication project to the Russian media, an event that attracted the interest of many top reporters and commentators, including a well known syndicated columnist by the name of Galina Marinova. The project was for the launch of a satellite-based wireless telecommunication network designed to cover the telecom and television broadcasting needs of Eastern Europe and all of Russia, going from London to Vladivostok and beyond, over eleven time zones of Russian territory. The network was conceived to provide hand-held communication over every square foot of land, irrespective of its surface contours. It was to be the largest single network of geostationary satellites operating anywhere, and was to be built, launched and operated by CanRusTel, or CRT, a Joint Venture of Russian and Canadian companies.

Leading the Canadian side was Eastel, a telecom multinational based in Toronto. Leading the Russian side was NPO, a huge satellite company based in the city of Krasnoyarsk, in central Siberia. I was the President of the JV, seconded by Eastel. The scope of the project was not for the faint of heart, as it involved an overall total value of close to $500 million, half of which was to be raised from private western investors, something that promised to be a major challenge.

A cocktail reception was held at the end of the presentation in the Kempinsky hotel, near Red Square. It was an occasion for meeting and greeting both enthusiastic and sceptical reporters of the Russian media. The magnitude of the project and its broad-based scope raised a lot of eyebrows, with questions on the wisdom of using foreign technology for a communication network of national importance. The unspoken concern was that it could be used for spying purposes by foreign powers.

It was towards the end of our cocktail time that Michail Marinov pulled me away from my group of interlocutors. He was the leader of the Russian team, seconded by NPO.

Listen, Gene, I have a flight to catch soon but before I leave I need to introduce you to my sister Galina and her husband Boris. You will like them. She is a prominent columnist who would like to have an exclusive interview. He is a retired former KGB agent, well connected to the current political apparatchik.

Michail was a man of few words. He was a tough manager who never promised anything he could not be absolutely certain to deliver. I learned to appreciate him for his no-nonsense approach to everything he did. He was in his late forties, of medium height on a robust frame, with brown hair cut very short, and a round face. He moved fast and talked just as fast, even in English. I followed him through the crowd till he reached a group of four people talking together. He barged in and quickly split them up.

Gene, I would like you to meet my sister Galina Marinova, and her husband Boris Karmitov, he said.

I am very pleased to meet you, I said as I shook hands with both of them.

The pleasure is all mine, said Boris with a strong baritone voice and a definite Russian accent. I hope that this project will open up new frontiers in the world and, more particularly, in Russia. It sounds very ambitious.

It is very ambitious, but also realistic, I said. I am very confident that a few years from now every Russian citizen will have access to both telephony and television broadcasts from every square foot of the Russian territory.

That would be a game changer, noted Galina with a smile and in perfect English. I can just imagine the impact such a network will have on the lifestyle of every person in Russia.

It will surely bring people closer together, I said.

It will, agreed Galina, but it will also have inevitable and yet unknown societal consequences.

It might level the playing field, so to speak, remarked Boris, in the sense that people will be better informed and more aware of what’s going on in the country and in the world.

Exactly, and it will make people like me busier and busier, noted Galina with a chuckle.

How do you mean? I asked.

Well, I report the news and I comment on the political scene, explained Galina. The day this network is operational it will enable more and more people to hear or read what pundits like me have to say. Politics will not be the same any more and political campaigns will change in character and reach.

Boris smiled at her remarks, as he who knows better.

That assumes that what you have to say, my dear wife, will in fact be made available to everyone, whether in Russia or anywhere else, he pointed out, as he put a paternalistic hand on Galina’s shoulder. I would not bet on it if I were you.

You are still stuck in your old ways, rebutted Galina. You know, she added looking at me, Boris is a former director of the KGB and still thinks that the news media will continue to be controlled by the politicians.

That is a fact of life in this country and is not going to change any time soon, stated Boris with conviction. "Too much is at stake for the nouveaux riches and for powerful politicians. Of all people, you, Galina, should know ... look at what they are doing to your columns!"

At this time they are editing my writings because they feel it’s too early to criticize the political elite, but it won’t last long. I look forward to the day when I can tell my readers the unfiltered truth about some of the political machinations going on behind the scenes.

Good luck to you, retorted Boris. Maybe a couple of generations from now it will be possible. So ... heh, hang in there. In the meantime watch what you say or write in public.

Boris and Galina spoke with self-assurance, typical of people used to interact at any level of society. He looked much older than she and had an intimidating figure – tall, stout and clean-shaven -- he had just a strand of white hair left on his bald head. On the other hand, Galina was a woman of considerable sex appeal -- blonde, petite, green-eyed, with a svelte silhouette and an equally svelte personality. She had an engaging allure and a most becoming smile bordering on the flirtatious. I was fascinated by her charm and her intelligence.

Michail in the meantime was getting a bit annoyed at Boris’s pugnacious remarks.

Okay, Boris, you don’t have to be so bloody cynical about our ruling class, he remarked jokingly. I know my sister and I know that she will keep on writing about the politics of this country with her usual frankness and flair for what needs to be told. She will not be intimidated by anyone.

I agree with you, Michail, rejoined Boris, Galina will continue to express her opinions but, if she is not careful, she will not find any newspaper willing to publish her. This is the problem as I see it. Remember that while the KGB is now dead, the all-new FSU is still run by former KGB agents. I know most of them and I can assure you that they haven’t changed much.

Be it as it may, rejoined Michail, I am sure that democracy will soon come to Russia, and our network will accelerate the process in that direction. A few years from now politicians will not be able to lie to people the way they have been doing for the past seven decades. We will be given the facts and also have a broad spectrum of opinions to draw from.

I hope you are right Michail, noted Boris. At your age you are still young and you still have time to see it happen. In my case, I doubt I’ll see much progress before I go.

You make it sound like you are on your death bed, Boris, said Galina with a burst of laughter.

I am way past my prime, but you, you are both still young.

Much as I enjoy this conversation, said Michail with impatience, I have a flight to Krasnoyarsk to catch soon, and I must therefore excuse myself.

Michail hugged his sister after a short chat in Russian and shook hands with me and Boris.

Gene, we will be in touch, he said as he left us.

Good bye Michail and thanks for your help. Have a safe trip back to Krasnoyarsk.

I found both Galina and Boris very interesting people to talk to and I wanted to hear more of their take on the political front of the new Russia. As it was getting close to dinner time, I thought I would ask them to join me in the hotel dining room.

It’s just about time for dinner, I said looking at my watch. I would very much like to continue our conversation over dinner if you wish to join me. I said.

Boris and Galina exchanged approving glances and then agreed.

Does it mean I can have an exclusive interview on some delicate parts of your project? she quipped, as Boris looked amused.

It will be my pleasure, I replied. What better publicity is there than having a column written by a prominent columnist?

I must warn you that I will not just praise the project.

I doubt you will find anything in it worth criticizing.

How about your financials, are they in good shape?

They are in excellent shape.

In that case I must consult my brother on technical matters. Surely there are weaknesses to talk about!

If there are any, I too would like to know.

Okay, I can see that I am not going to get much controversial stuff from you. However, I am still interested in the social impact that such a project could have on my country.

Galina and Boris formed a formidable couple of well-connected high flyers in the Russian society, notable for their sophistication and age difference -- I was later told that he was often seen as her father rather than her husband. She was well known and widely read for her often dissenting opinions on Russian political and social affairs. She also had a good sense of humour and was willing to trade barbs just for fun.

We moved to the dining room and took a seat at a round table as the waiter stood there waiting for our orders. I ordered a Campari as an aperitif. They did the same.

It’s still my favourite aperitif, I noted.

It happens to be ours too when we are in the company of foreigners, remarked Boris. When we are with Russians I prefer a shot of Vodka, while Galina usually starts immediately on wine.

Their command of the English language, especially Galina’s, was simply amazing.

By the way, I queried, I am impressed by your English and am curious to know where you learned it. You are both very fluent.

Well, in my case, said Galina, I learned it in school to start with, and then I practiced a lot during five years as Russian correspondent in London.

As to me, said Boris, I spent a few years in the USA as cultural attaché, he smiled as he said attaché.

Is that supposed to be a euphemism? I quipped.

Of course it is. I was a KGB agent, but we had to play the part, just like our American counterparts did in Russia.

It sounds like a game.

It’s a necessary game, especially during the cold war. And even now, we still need to know what’s happening in other countries. We all do it; we all need to know each other’s secrets.

Galina observed in silence but without interest. She wanted to talk about other things.

This is not your first trip to Moscow, is it? she asked me.

No, I have been here before and also in St. Petersburg, but I never had a chance to see much of it. I look forward to the day when I will have a free weekend. There is so much I would like to see in Moscow.

It will be our pleasure then to show you around, said Boris. Let us know when you do have a free weekend and we will be your guides.

Thank you very much. I will surely take advantage of your offer as soon as possible.

Now that this project is officially under way, you must have plans to be in Moscow quite often, I presume, noted Galina.

In fact I do. I’ll be here for project reviews at least monthly and maybe even more often, depending on how things go.

It’s a date then. Give us a call.

Thank you, I do appreciate it. But tell me, I am very interested in learning more about the current political situation in Russia. It will help me better understand my partners.

Boris was the first to jump on it. He looked eager to let me know what he thought without worrying about the confidentiality of what he was going to say.

I will be very frank with you, Gene, said Boris, because I feel we can trust you to keep certain facts to yourself.

I appreciate your trust.

Now, you must keep in mind, he continued, that this country is still reeling from over seventy years of harsh communism. People are not used to having freedom of speech and freedom of movement. It is still a novelty and it plays in the hands of a few smart people who know their way around and who have political influence. Big political mistakes were made in a mad rush to introduce democratic ways too soon after the collapse of the Soviet Union. The privatization process of important state assets, for instance, was done by idiots. This is why we have today a few ultra rich people who made piles of money by buying and operating those assets. They are known as Oligarchs. I am sure you know about them because they often make headlines in foreign media.

Yes, I have heard of them but do not know much about how they operate.

Well, you will soon find out, because they have their hands everywhere, and I would not be surprised if they show interest in your project.

Should I be worried?

It depends on how you play your hand. All I can tell you at this junction is that you should be suspicious of their motives.

How do you mean?

I don’t know exactly but they might want to be involved if they see an opportunity to benefit somehow. Anyway, this is not something to worry about at this early stage. The fact is that a few of those guys are known to use criminal methods to have their way. We know of some important people who disappeared after openly opposing their business practices.

It’s true, confirmed Galina. Boris has been investigating some of those cases.

So, you can appreciate that this state of affairs, rejoined Boris, is a major scourge in our society, and needs to be corrected as soon as possible. Galina is one of the few columnists who writes about their illegal activities and shameless looting of the country’s wealth. Unfortunately she is much too often stymied by her editor.

Is it really that bad? I asked Galina.

It is, it really is, she confirmed. The media are worried about damaging repercussions and do not want to take chances by publishing controversial stories. I can also tell you that such repercussions could be violent in some cases. There are some, not all to be sure, who will stop at nothing to have their way. I have heard of beatings and outright murders that have never been fully investigated because they involve gangs loyal to powerful individuals.

Are you talking of Oligarchs only or also others?

They are a mix of mafia-type gangs that have always existed but who are now in the pockets of some Oligarchs and do their dirty work for them. They are hard to pinpoint. Whatever evidence we manage to collect against them is quickly quashed by corrupt authorities. It’s a vicious circle unfortunately. Boris knows much more than I do about their methods and is helpless, despite his connections at the top.

Is there a solution to the problem? I asked.

Yes there is, but it will take time, replied Boris. I am very active within a group of like-minded people who want to see law and order restored in this country. We are still new at this game and we need time to get our act together, but the day will come when we will have gathered irrefutable evidence against some of those people. We will then make sure that the evidence is duly used against them. If we manage to get only one of those criminal to justice, it will then be easier to get others. This is where we sit at present.

Who said that the road to democracy is covered with roses? I asked jokingly and rhetorically.

It would be more appropriate to say that it is covered in blood, not roses! exclaimed Galina.

I admire your fearless dedication to your country. I wish you all the luck you deserve to see better days ahead.

I trust you understand that this conversation should remain between the three of us, noted Boris.

Of course, it goes without saying, I confirmed. I can assure you of my complete discretion on the subject, and if there is anything I can contribute to your mission, count me in.

In just a few hours of cordial conversation I felt a bond with both Boris and Galina. I trusted them blindly and considered them close friends, a sentiment that I felt was reciprocated by both.

May I ask you a few confidential questions, Mr. Toner? asked Galina.

Of course, but please do and call me Gene, if you will.

Okay, deal, I am Galina.

And I am Boris.

Good, now that we are all on a first name basis, we can consider ourselves good friends, I submitted.

After what we told you about our beliefs, I would hope that we have established a confidential rapport between us worthy of very close friendship, submitted Boris.

I’ll drink to that statement, I said as I raised my glass for a toast. Here is to our close friendship!

May it last forever, added Galina as we all sipped from our glasses and started to eat.

You said you had a confidential question to ask me, I told Galina. What is it?

I’ll ask you after dinner, during the interview.

At the end of dinner we moved to the bar and ordered a cognac. Galina had pen and paper ready to take notes as she prepared to ask me questions on the network.

If I may now, Gene, I need to ask you about the CRT project and I wish to have a little more than just generic answers. Is it possible?

To the extent that I can answer without compromising the project, I will answer all your questions with an open mind.

To start with, a project of that nature begs two fundamental questions. The first is on its financial viability and the second is on individual and state privacy. I am not a financial expert but I can’t help wondering how you hope to recover the investment. Most of Russia’s population is concentrated in the western part of the country, an area that can be easily covered by only one satellite. How do you justify putting five of them in orbit?

That is a fair question that goes to the heart of the project. The quick answer is that, as a whole, the project is cost-effective and will return a healthy profit after the initial three years of operation. The longer answer is that the middle three of the five satellites are not expected to contribute much to the bottom line, but are essential to ensure seamless coverage over fourteen to fifteen time zones, which include parts of Europe and parts of Asia. The revenue generated in Europe and in Asia goes a long way to cover our operating costs. It’s important to note here that CRT has a major cost advantage over other systems. Russia owns all five orbital slots and provides all launch rockets and delivery systems at cost. As a result we can build and operate the network at less than half of what it would cost competitive systems. Canada only provides the ‘payloads’, or the actual orbiting hardware. This is what makes it viable.

Are the payloads also built at cost?

No, they are not; they are built for profit by business corporations.

Is it fair then that only Russia provides its part at cost?

Russia sees this project as an investment in its economic future and insisted on having seamless coverage of all its territory. The network will not provide coverage to any part of Canada.

In other words, the network has been conceived and designed to serve primarily Russian needs.

Yes, that’s a fair assessment.

Okay, I get it. Now, how about the privacy issue? I would think that satellites in space will have ‘eyes’ capable of seeing all that happens in all of Russia. Given the fact that they are built in the West, what guarantee does Russia have that it will not be spied upon by Western nations, the USA in primis?

The payloads - technically known as ‘transponders’ - on board of the satellites are simply ‘electronic mirrors’ in space. They relay back to their orbital footprint on earth whatever they receive from earth stations. Such earth stations are controlled jointly by both parties of the JV and provide the necessary security both ways.

I see what you mean, but ... what if some rogue nations or criminal entities manage to have their own earth station hidden somewhere? Could they not use those ‘mirrors’ in space to gather classified information?

That’s another excellent question, Galina. Yes, they could, but they would have to obtain a lot of confidential technical information on how to do it, and they would also need pass-codes from both JV parties. It would therefore be nearly impossible.

So, what you are saying, concluded Galina, is that it is possible but very unlikely that the network will end up being used for spying or criminal purposes.

Right, but also, put it in perspective. There are cheaper ways of getting such intelligence, as Boris surely knows.

I must agree with Gene here, explained Boris. The only way rogue countries could use the network is by having hidden earth stations at both ends, in their country as well as in Russia. From my point of view, I wouldn’t worry about rogue nations or international criminals. I would worry instead about Russian criminal gangs. They could, conceivably, obtain the information they need to exploit the network for trafficking purposes, such as drugs, illicit weapons and money laundering.

Are you thinking what I am thinking? asked Galina.

I believe so, yes, replied Boris. I am thinking of our own criminals, some Oligarchs in particular. They have enough money to corrupt anyone operating the network.

Even then, I submitted, they would have to corrupt our people too. All controls are operated jointly.

I see, okay, I get it, said Galina as she wrote the last few notes and closed her notepad.

What’s your conclusion, Galina, I asked. Are you going to write a positive or a negative report on it?

It will be positive, don’t worry, she affirmed. I see a lot of benefits for my country. The impact that such project will have on Russian communities, especially in sparsely populated areas, is of great value. I see it as an investment in infrastructures, much like building roads, railways, shipways and airports.

I am glad you see it that way, thank you.

My only personal concern, she added, "is about what Boris said regarding some Oligarchs. They would have to be watched very carefully. God forbid if they manage to get some form of control over the network. But this is not something I will write about. I don’t want to alert those guys to