Berezovsky, Boris

▪ 2001

      When Russian Pres. Boris Yeltsin resigned, Russian tycoon Boris Berezovsky lost his status as a Kremlin insider and one of Russia's most powerful men. Yeltsin's successor, Vladimir Putin, came to power in 2000 promising to “liquidate the oligarchs as a class.” By year's end Berezovsky had been ousted from Kremlin circles and was facing a criminal investigation into his business affairs.

      Berezovsky had epitomized the “oligarchs,” the small group of Russians who had made their fortunes in the chaotic last years of the U.S.S.R. and parlayed their wealth into political power in the new, capitalist Russia. In 1996 Berezovsky had boasted that he and six other financiers controlled 50% of the Russian economy.

      Boris Abramovich Berezovsky was born Jan. 23, 1946, in Moscow and was the only son of a nurse and a builder. He studied electronics and computer science; completed his postgraduate studies in 1975, and earned his doctorate in decision-making theory in 1983. Thereafter he worked on information management at an institute of the Academy of Sciences of the U.S.S.R. In 1991 he became a corresponding member of the Russian Academy of Sciences.

      Berezovsky founded his business empire in the last years of the Soviet Union. The economic liberalization launched by Soviet leader Mikhail Gorbachev legalized small-scale private enterprise and made it possible for enterprising Soviet businessmen to privatize the profitable parts of their state-owned businesses. They could also exploit the gap between the controlled prices set by the state and the prices Soviet-produced goods could fetch on the free market. Berezovsky typified these “new Russians.” He had worked as a consultant on information management to AvtoVaz, Inc., the largest Soviet car producer. In 1989 Berezovsky used these contacts to set up LogoVaz, the U.S.S.R.'s first capitalist car dealership. LogoVaz bought cars at the state-set price for cars intended for export and sold them at the much higher price such cars could fetch inside Russia. The profits enabled Berezovsky to expand his interests into oil and banking. His cultivation of Yeltsin's bodyguard and of Yeltsin's daughter gave Berezovsky an entrée into the Kremlin. As a result, he won financial control of the former Soviet state airline, Aeroflot, and of Russian Public Television (ORT), Russia's main television channel.

      In 1996 Berezovsky helped bankroll Yeltsin's reelection as president. He was rewarded with political appointments, first as deputy secretary of the Security Council in 1996 and then in 1998 as executive secretary of the Commonwealth of Independent States. Under his management, ORT supported first Yeltsin and then Yeltsin's designated successor, Vladimir Putin.

      Putin's determination to reassert state control soon brought him into conflict with Berezovsky. Accusing Putin of returning to totalitarianism, Berezovsky announced the formation of a “constructive opposition.” He complained that the Kremlin had threatened him with imprisonment unless he surrendered control of ORT. Instead, Berezovsky transferred his shares to a handpicked group of writers and journalists. During the summer a long-standing investigation into Berezovsky's handling of Aeroflot's finances was revived. In December, Berezovsky announced that he was establishing a multimillion-dollar foundation to promote the development of civil society in Russia. At year's end observers were divided. Though some saw Berezovsky's fall from power as permanent, others warned that it was too early to rule him out, since he would retain his influence in Russian politics through his shareholders at ORT.

Editor

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