I chanced upon this image of the coat of arms of the erstwhile Soviet Union. It has the rising sun, corn stalks, a hammer, a sickle, a star and the acronym CCCP. It is an idealistic symbol, meant for the hoi-polloi to easily identify with. (CCCP is Russian for USSR).
Compare that with the coat of arms of the post-1991 Russian Federation shown below. There are no wimpy corn and farming tools in there. This one depicts aggression. A knight, squashing someone, an assortment of crowns, and two glowering eagles clutching a royal staff and a sphere that resembles a jewel box-cum-piggy bank. If there had been space left, they might even have had a snarling Dick Cheney in there.
Quite a switch. The metamorphosis is not restricted to only the coats of arms. Between pre and post-1991, it looks like Russia got hit by a shockwave and flipped from socialistic to oligarchic.
From drab, shabbily dressed factory workers shuffling in the snow, reeking of cheap vodka, hurriedly stepping aside as the black six-door Zil swept by, it now has the same drab, shabbily dressed factory workers shuffling in the snow, reeking of cheap vodka, hurriedly stepping aside as the black six-door Mercedes careens by. Stone-faced, shifty-eyed bureaucrats have given way to the oligarchs.
An oligarchy is a social system under the political control of a small elite. According to the theory of Robert Michels, a German academic famed for his study of sociology in politics, social systems become oligarchical because ordinary folk find governance too complicated generally prefer to let others make decisions for them. Those who achieve authority are then unwilling to give up the resulting privileges and prestige and thus try to consolidate and extend their power in order to keep them. The first oligarchy was probably the Roman senate.
Actually, oligarchy has always been a way of governance in Russia, right from the time of the Slavs, the Dregovichs and the Slovens of the 7th century, and even through the 75 years of Soviet rule when the Politburo became a cabal of privileged men who governed as they saw fit through a slightly larger group called the Nomenklatura, members of which were hand-picked by the Politburo and consisted of shakers and movers, not only in politics but also in the arts and sciences.
Oligarchies in varying forms have been in existence and still are, in almost every continent. Why, India was hijacked a long time ago, by the Ambanis, Tatas, Birlas, Goenkas, Ruias, Piramals and Srinivasans of the 20th century. Humans long decided that its easier to carve up and lord over jointly in small numbers, than be alone at the top and have to fight off challenges all the time.
The US too had its oligarchies, though in a slightly different sense. There was no sudden switch there. The US oligarchs were better known as ‘robber barons’, immensely wealthy industrialists and businessmen who reigned between the mid-18th and early 19th centuries. They made and bent laws to reflect their will and made Presidents beholden to them. They lorded over vast tracts of land and owned virtually every business within five hundred miles. Andrew Mellon, J.P.Morgan, Marcus Goldman, Cornelius Vanderbilt and Patrick Joseph Kennedy were all robber barons.
And of course, the organized crime families, the Gambinos, Bonnanos, Colombos, Genoveses and the Luccheses. Heck, the two-party Republican/Democrat polity itself is a kind of rotating oligarchy, having no distinct platform or separate identity or ideology between them.
Of all oligarchies, the Russian one is by far the most fascinating, replete with unbelievable rags-to-riches lives. Let us take a look at Vladimir Putin’s St Petersburg friends. Arkady Rotenberg, Putin’s former judo coach, net worth $1.1bn, makes oil pipes for Gazprom, owns real estate, malls, ports, distilleries and mines. Yuri Kovalchuk, former Putin sidekick and neighbor, $1.5bn, holds a 30% stake in Bank Rossiya. Gennady Timchenko, former sales rep, $2.0bn, 5% of Russia’s total economic output, in the form of oil and commodities, flows through companies he owns. Oleg Deripaska, former construction worker, now a commodities and metals trader and manufacturer worth $20.0bn.
Most of these fat cats live in the wealthy ghetto of Rublyovskoye Shosse, near the Putin’s dacha on the edge of Moscow, where Lamborghini showrooms jostle alongside Gucci boutiques, plastic surgeons and glitzy restaurants that charge $7500 just to reserve a table and stock $150000 bottles of vintage wines in their cellar.
The ghetto keeps things private, away from the ordinary Russians who shiver in the cold as they shuffle to and from work where they barely manage to make $150 a month. In just 20 years, Moscow has grown to have the world’s second largest number of billionaires, fully 64 of them, as per a database published by The Guardian.
Moscow is the only city in the world which hosts an annual Millionaire Fair – For a week, you can walk in and pick up a diamond encrusted cellphone for $15000, a $25000 negligée, $50000 S&M bondage set with leather and gold whip and a pearl-studded dildo or an obscenely priced mink coat. If you are musically inclined, there might be a grand piano on promotion for $350000.
The Millionaire Fair has a wine counter, selling wines so exclusive that for the price you pay, the vintner will fly down personally to uncork the bottle for you and show you how to drink the stuff. Jacuzzi-fitted executive jet sales counters and are strewn everywhere you turn. Watch where you’re going or else, you might inadvertently bump into one of the skimpily dressed blonde waitresses carrying complimentary bowls of Beluga caviar, plates of Chatka crabs, Limfjorden oysters and quail eggs.
Putin himself is a modest man, at least on paper. The NY Times says that official documents show he has an income of about $153,000 and owns a small plot of land, a small flat and three cars, one of which is a Soviet era Lada. There are however, persistent rumors of a $1billion dacha being built for him on the shores of the Black Sea, not far from Sochi, by his grateful nouveau riche friends.
Before this current set of oligarchs, there was another, the Yeltsin set. They were the pioneers of the smash-grab. There was a BBC series called ‘Russian Godfathers’ about these guys, which is worth watching.
The series paints a graphic picture of the chaos that reigned as the Soviet Union went through a grotesque transformation to capitalism and a small group of ruthless, well-connected men grabbed and took over the running of large state-owned assets and then went on to figure among the top billionaires in the world.
The metamorphosis from communism was so badly managed that it left many ordinary Russians feeling nostalgic about communism and wondering what the struggle to be free was for.
The first oligarchs, the Yeltsin groupies, behaved like little kids who had suddenly been given their own playrooms full of toys. They paraded their naked wealth obscenely. Villas, yachts, cars, private jets, beautiful women, you name it and it was there to be shown the world, while ordinary Russians queued up for basic necessities, as before.
There was Boris Berezovsky, a former mathematician, worth $7.0bn when he ostensibly committed suicide in March 2013. Roman Abramovich, formerly a mechanic and a rubber duck salesman, now has 14.0bn. Badri Patarkatsishvili, who used to be a minor Georgian Soviet Komosmol functionary, made $12.0bn before his death in 2007. Mikhail Khodorkovsky was another low-level communist party functionary before he became the 16th richest billionaire in the world and Russia’s richest. Vladimir Gusinsky, an ex-taxi driver, later amassed over $500mill. Mikhail Fridman, former theater ticket black marketer, is now rolling in $15.0bn. Vladimir Vinogradov, former construction engineer, made over $5.5bn before he died in 2008.
The oligarchs realized that they needed political protection. They purchased power, helped Yeltsin win his re-election in 1996 and then, they over-reached themselves. They connived to get one stocky guy with cold, reptilian eyes, to succeed Yeltsin. That guy, an ex-KGB operative named Vladimir Putin, was anything but a malleable, vodka-soaked Yeltsin. The oligarchs would soon realize that they had outsmarted themselves.
A Russian commentator opines that Putin has a certain ruthless, cold-war street smartness that is devoid of emotion or scruples. He was like a cyborg. No one can gauge what goes on behind that flat, hard, arctic stare. Even when he smiles, the guy looks dangerous.
Unlike Yeltsin, Putin didn’t have a vodka haze to muddle his thought processes. Things were pretty clear to him. Two things actually. One, with all their riches, the oligarchs were potentially more powerful than him and therefore a threat. Two, ordinary Russians hated them, not only because they did what they did- rob the state of its resources, but also because they were mostly Jewish. All of the above Yeltsin oligarchs, and many others like them, were Jewish and most ordinary Russians are rabidly anti-Semitic.
Putin proceeded to take the Yeltsin oligarchs down one by one, a move that saw his approval rating among the masses, shoot up to 80%. Most of the Yeltsin groupies escaped into exile by the skins of their teeth, to England.
The British are very hospitable toward people who have a billion in their pockets. While the French and the Spanish welcome African and Latin American despots, the British love Russian oligarchs. Who do you think occupy those palatial homes in Belgravia and Kensington Palace Gardens in London? Englishmen? Those neighborhoods are strictly for the ‘Bratva’. London now has the world’s third largest number of billionaires, 54 of them, as per the same Guardian research. I’ll bet most of them are expatriate and probably from the erstwhile Soviet Republics.
Khodorkovsky was nabbed by FSB agents inside his jet just when he was about to flee Moscow in 2005. He was thrown into a Siberian prison camp where he spent 8 years earning 23 roubles a day, sewing police uniforms, before suddenly being released last month.
Putin just switched the Yeltsin oligarchs with his St Petersburg cabal. The Putin oligarchs are more discreet with their cash. Which may be why nobody noticed when, during the 2008 meltdown, some of them saw their wealth fall to their last $100 million, which is like the über-rich equivalent of skid row.
The downturn however didn’t stop them from splurging behind closed doors. When a Times correspondent asked Kamaliya Zahoor, wife of Mohammed Zahoor, the Ukrainian oligarch settled in London, about the kind of champagne she prefers, the gorgeous singer replied that she liked ‘slipping into some Krug Clos d’Ambonnay’ to perk her up after a day of shopping. The reporter assumed that the Russian meant to say ‘sipping’ and not ‘slipping’.
“No, no, I need it to bathe in. I fill the tub with it and just slip in. It cleanses all the toxins from my body. You should try it some time.” She actually meant it.
The Krug retails for $750 a bottle and you need just 35 bottles to fill a bath.
Oligarchy? By Golly-garchy!