When Russians refer to the “oligarchs” they are referring to a handful of big businessmen within their country. With the collapse of the Soviet Union in the 1990s, state resources, such as oil, mines and telecommunications, were up for sale. Russia was in such chaos at the time that a group of business magnets bought these resources for a low price. These men are called the oligarchs.
Many believe the oligarchs used exploitative business practices to buy state resources in underhand auctions. Many oligarchs are believed to keep the majority of their money offshore, thus avoiding taxes. From the 1990s on, while most Russians were living in poverty, the oligarchs turned themselves into billionaires. The most notorious oligarch of them all is Boris Berezovsky.
Berezovsky in Contemporary Russian History
Boris Berezovsky now lives in London. He has been living there since 2001 when the Russian authorities charged him with alleged tax evasion and fraud. Berezovsky continues to deny all of these charges.
Things started out relatively well for the oligarch. By 1995, he had amassed a fortune worth $2 billion. He, in fact, boasted in 1996 that he and six other oligarchs controlled 50 percent of the Russian economy (Hollingsworth & Lansley, 31). He was exaggerating, but the statement wasn’t that far from the truth.
Berezovsky was born in January 1946 in Moscow. He originates from a Jewish family. He was a mathematical genius in his youth and eventually graduated with a PhD in the science field. He lived modestly, but his luck changed in 1989 when selling used cars, including Mercedes imported from East Germany. Berezovsky then founded a car company, LogoVaz, which sold the old Russian car, the Lada.
By 1993, he had an automobile empire, including the building of a “people’s car.” General Motors was to collaborate on the car, thus Berezovsky offered bonds to ordinary Russian citizens. Many took advantage of what they viewed as a prosperous opportunity. However, GM backed out and thousands of Russians lost their money. This is when contemporary Russian society began their extreme hatred of Berezovsky.
Berezovsky in Russian Politics of Moscow Russia
Berezovsky used his power and wealth to control the state-owned airline, Aeroflot. In the meantime, he formed a kinship with then President Boris Yeltsin. Yeltsin was a friend to most, if not all, of the oligarchs, who began to control the Kremlin. In fact, “in December 1994 Yeltsin signed a decree that handed over a 49 percent stake in ORT, the main state-owned television station and broadcaster of Channel One, primarily to Berezovsky, without the auction required by law” (Hollingsworth & Lansley, 39).
Berezovsky then acquired Sibneft, Russia’s sixth largest oil company for the mere price of $100 million.
Berezovsky remained in the good graces of Yeltsin’s inside group called “the family.” He ensured the financial gain of both Yeltsin and Yeltsin’s daughter. Berezovsky’s own wealth bought him extravagant homes, fine wine and fast cars. By 1996, the oligarch enjoyed money, fame and extreme power in the Kremlin.
However, this would all change with the newly elected president, Vladimir Putin, who would come into power on New Year’s Eve of 1999.
- Hollingsworth, Mark and Stewart Lansley. Londongrad: From Russia with Cash: The Inside Story of the Oligarchs. Fourth Estate: August 12, 2010.