Mssrs. A and B

Skimming through the reports about Mr A and Mr B from Russia and how they made their money.

It all sounds remarkably simple as compared to what really was going on. Quite remarkably legal as compared to what was going on in fact.

A rough guide to the reality is that as background you had these vast assets with no one around who had any idea at all about how to run or combine them. There was also zero working capital (it was the provision of that which made Glencore and the Reuben Brothers (not jointly, separately) so rich. The ability to finance raw materials, shipping….).

Then there were three groups. The \”tolkachi\”. Those who did have a clue about where things were, where they could be processed, who had the raw materials, how you shipped them etc etc.

Then the politicians. They controlled who could buy these vast assets at what prices. Not surprisingly, they got sold in return for political support.

The third group were the crooks. In this sense I mean real crooks, not tax dodgers, dodgy politicians. I mean slit your throat for fun type gangsters. Whatever the politicians might say about who had permission to own and or run something, de facto permissions and ownership often rested with them.

To succeed in this environment required one to have the technical knowledge of the tolkachi, the ear of the politicians (or perhaps their wallet) and then the ability to buy off the gangsters.

The oligarchs are essentially the people who managed this. They could come from any of the three groups, even from outside them all. Some definitely came from politics, some definitely from gangsters, some definitely from fixers and there are a few from entirely outside these three groups but who were able to conduct the dance successfully.

Who came from where is obviously going to lead into libellous speculation. But any close observer of the Russian scene could fit most oligarchs into one of those backgrounds.

A useful summary of the economic policies of the Putin years would be politics, the new ruling house, reallocating the ownership of those assets to accord with the wishes of the new ruling house. All rather feudal really, House of York placing new Earls and Barons on lands to ensure loyalty after Lancaster. Or vice versa. And definitely making sure that ownership rests on continued loyalty.

4 thoughts on “Mssrs. A and B”

  1. “the ability to buy off the gangsters.”

    Or scare off. Some of the stories about Mr A are straight from a gangster film.

  2. So Tweedledee and Tweedledum agreed to have a battle
    ‘cos Tweedledum, said Tweedledee, had stolen his new rattle.

    I can see why they used an English court. (It’s a nice little earner for our invisible exports.)

    But this is a case with virtually nothing, it seems, written down. With a judgement based on which of T & T seems “nicer”. Not a great advertisement for English courts, in the end.

  3. Tim, Putin was Yeltsin’s Prime Minister as well as his designated successor so it’s less York and Lancaster than Edward II and Edward III.
    A very large number of millionaires are former Komsomol officials – remember that Yeltsin was First secretary of the Moscow Communist Party and a member of the Politburo so most of his pals were senior members of The Party and most minor oligarchs were their proteges.
    The Mafiya only ruled some areas of Russia (for instance my friends were safe in Novosibirsk but warned not to visit the Kuzbass). Outside these areas an alternative to buying off the local gangsters was to have a team of ex-KGB agents who were generally tougher but more disciplined than the gangsters.

  4. What’s also worth mentioning is that those oligarchs whose names we now know (and who are busy sueing each other in court) are the winners of a rather dangerous game of musical chairs which ended when Putin turned the music off sometime around 2003. If you were on top at that point, you survived, but those at the top in the earlier days often didn’t last long as this post of mine implies. Those who survived at the top into the Putin years, and subsequently managed to keep themselves out of jail by not upsetting Putin, have extraordinary survival skills and/or luck.

    On the subject of the trial being in London, the Americans turned down the initial request to hold it there on the quite reasonable grounds that two Russian crooks fighting over ill-gotten gains was none of their business and a waste of their court time. London has long been seduced by Russian billionnaires though and agreed, but it hardly makes us look good that we are effectively hiring out our courts to gangsters who on the odd occasion want a fair fight.

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