Russian oligarchs: Difference between revisions

Russian oligarchs (

The first modern Russian oligarchs emerged as business-sector entrepreneurs under Mikhail Gorbachev (General Secretary 1985–1991) during his period of market liberalization.^{[2][page needed]} The term "oligarch" derives from the Ancient Greek oligarkhia meaning "the rule of the few".

Since 2017, several Russian oligarchs and their companies have been hit by

Yeltsin era

During Mikhail Gorbachev's perestroika (c. 1985-1991), many businessmen in Russia imported goods such as personal computers and jeans into the country and sold them for a hefty profit.

During the 1990s, once

Economists Sergei Guriev and Andrei Rachinsky contrast older oligarchs with nomenklatura ties and younger-generation entrepreneurs such as Kakha Bendukidze who built their wealth from scratch because Gorbachev's reforms affected a period "when co-existence of regulated and quasi-market prices created huge opportunities for arbitrage."^[9]

Although the majority of oligarchs were not formally connected with the Communist Party of the Soviet Union, there are allegations^{[by whom?]} that they were promoted (at least initially) by the communist apparatchiks, with strong connections to Soviet power-structures and access to the funds of the Communist Party.^{[10][need quotation to verify][11]} Mikhail Khodorkovsky started his business importing computers under auspices of the Komsomol-authorised Center for Scientific and Technical Creativity of the Youth in 1986, briefly serving as a deputy secretary of the Komsomol for a district in Moscow in 1987. His move into banking two years later was funded with support from Komsomol alumni working in Moscow city government. Later, he served in Russian government as an adviser to the prime minister and a deputy minister of fuel and power while still running his business.^[12]

A friend and a business partner of Boris Berezovsky,^[15] Yuli Dubov [ru] was a researcher at VNIISI as well.^[16] Berezovsky himself was Head of the Department of System Design at the another Academy of Sciences research centre, Institute of Control Sciences [ru]. His enterprise LogoVAZ [ru] was established by the Institute as a joint venture.^[17]

Vladimir Vinogradov was the chief economist of Promstroibank, one of the six banks existing in the Soviet Union,^[18] previously serving as the secretary of Atommash plant Komsomol organisation.^[12] Official Russian media usually depicted oligarchs as the enemies of "communist forces", which were portrayed as a

Post-Soviet business oligarchs include relatives or close associates of government officials, even government officials themselves, as well as criminal bosses often connected to the Russian government.^{[19][additional citation(s) needed]} Some members of these groups achieved vast wealth by acquiring state assets very cheaply (or for free) during the privatization process controlled by the Yeltsin government of 1991–1999.^{[20][need quotation to verify]} Specific accusations of corruption are often leveled at Anatoly Chubais and Yegor Gaidar, two of the "Young Reformers" chiefly responsible for Russian privatization in the early 1990s.^[21][22][23] According to David Satter, author of Darkness at Dawn, "what drove the process was not the determination to create a system based on universal values but rather the will to introduce a system of private ownership, which, in the absence of law, opened the way for the criminal pursuit of money and power".^[24]

Involvement in politics

During Yeltsin's presidency (1991–1999) oligarchs became increasingly influential in Russian politics; they helped finance his

At the end of the century

The 1998 Russian financial crisis hit some of the oligarchs hard, however, and those whose holdings were still based mainly in banking lost much of their fortunes.

The most influential oligarchs from the Yeltsin era include:^[26]

• Boris Berezovsky
• Mikhail Fridman
• Vladimir Gusinsky
• Mikhail Khodorkovsky
• Vladimir Potanin
• Alexander Smolensky
• Vladimir Vinogradov

They formed what became known as the Semibankirschina (or "seven-banker outfit", compare Seven Boyars), a small group of businessmen with a great influence on Boris Yeltsin and his political environment. Together they controlled from 50% to 70% of all Russian finances between 1996 and 2000.

Fridman and Potanin retained their wealth in the Putin era, which began in 1999. The Guardian reported in 2008 that "'oligarchs' from the era of former president Boris Yeltsin have been purged by the Kremlin".^[27]

Putin era, 1999-2022 (prior to the invasion of Ukraine)

During Putin's first presidency term, a number of oligarchs came under fire for various illegal activities, particularly tax evasion in the businesses they acquired. However, it is widely speculated and believed that the charges were also politically motivated per these tycoons falling out of favor with the Kremlin.^[28][29] Vladimir Gusinsky of MediaMost and Boris Berezovsky both avoided legal proceedings by leaving Russia, and the most prominent, Mikhail Khodorkovsky of Yukos oil, was arrested in October 2003 and sentenced to 9 years. This was subsequently extended to 14 years, and after Putin pardoned him, he was released on 20 December 2013.^[30]

An economic study distinguished 21 oligarchic groups as of 2003.^[9] Between 2000 and 2004, Putin apparently engaged in a power struggle with some oligarchs, reaching a "grand bargain" with them. This bargain allowed the oligarchs to maintain their powers, in exchange for their explicit support of – and alignment with – Putin's government.^[31][32] However, other analysts argue that the oligarchic structure has remained intact under Putin, with Putin devoting much of his time to mediating power-disputes between rival oligarchs.^[33] Some had been imprisoned, such as Mikhael Mirilashvili.

Many more have become oligarchs during Putin's time in power, and often due to personal relations with Putin, such as the director of the institute where Putin obtained a degree in 1996, Vladimir Litvinenko,^[34] and Putin's childhood friend and judo-teacher Arkady Rotenberg.^[35] Daniel Treisman proposed using a term "silovarch" (silovik and oligarch) for new Russian oligarchs with backgrounds in Russian military and intelligence.^[36]

The 15 most-prominent oligarchs of the Putin era include Roman Abramovich, Alexander Abramov, Oleg Deripaska, Mikhail Prokhorov, Alisher Usmanov, German Khan, Viktor Vekselberg, Leonid Mikhelson, Vagit Alekperov, Mikhail Fridman, Dmitry Rybolovlev, Vladimir Potanin, Gennady Timchenko, Andrey Guryev and Vitaly Malkin.^[37]

In 2004, Forbes listed 36 billionaires of Russian citizenship, with a note: "this list includes businessmen of Russian citizenship who acquired the major share of their wealth privately, while not holding a governmental position". In 2005, the number of billionaires dropped to 30, mostly because of the Yukos case, with Khodorkovsky dropping from No. 1 (US$15.2 billion) to No. 21 (US$2.0 billion).

A 2013 report by Credit Suisse found that 35% of the wealth of Russia was owned by the wealthiest 110 individuals.^[38]

Billionaire, philanthropist, art patron and former KGB agent Alexander Lebedev has criticized the oligarchs, saying "I think material wealth for them is a highly emotional and spiritual thing. They spend a lot of money on their own personal consumption." Lebedev has also described them as "a bunch of uncultured ignoramuses", saying "They don't read books. They don't have time. They don't go to [art] exhibitions. They think the only way to impress anyone is to buy a yacht." He also notes that the oligarchs have no interest in social injustice.^[39]

The "Putin list"

On 30 January 2018, the

A significant number of Russian oligarchs have bought homes in upmarket sections of London^[44] in the United Kingdom, which has been dubbed "Moscow on Thames" or "Londongrad".^[45] Some, such as Eugene Shvidler, Alexander Knaster, Konstantin Kagalovsky, David Wilkowske and Abram Reznikov, are expatriates, having taken permanent residency in London. Most own homes in both countries as well as property and have acquired controlling interests in major European companies. They commute on a regular basis between London and Russia; in many cases their families reside in London, with their children attending school there. In 2007 Abram Reznikov bought one of Spain's mega recycling companies, Alamak Espana Trade SL, while Roman Abramovich bought the English football club Chelsea F.C. in 2003, spending record amounts on players' salaries.^[46]

The billionaire Moscow oligarch Mikhail Fridman, Russia's second richest man at a time, was restoring Athlone House in London as a primary residence in 2016,^[47] to be worth an estimated £130 million when restored.^[48]

2008 global recession and credit crisis

According to the financial news-agency Bloomberg L.P., Russia's wealthiest 25 individuals have collectively lost US$230 billion (£146 billion) since July 2008.^[49][50][51] The fall in the oligarchs' wealth relates closely to the meltdown in Russia's stock market, as by 2008 the RTS Index had lost 71% of its value due to the capital flight after the Russo-Georgian War of August 2008.^[52]

Billionaires in Russia and Ukraine have been particularly hard-hit by lenders seeking repayment on

In the aftermath of the war in Ukraine several dozen business people with family connections to top politicians have joined the oligarchy. These include President Putin’s younger daughter Katerina Tikhonova, who through her investment fund has been the recipient of numerous large contracts from state-owned energy companies.^[60] Her former husband Kirill Shamalov runs the largest Russian petrochemicals company Sibur as well as his own investment fund.^[61]The closest friend of President Putin’s daughter Kirill Dmitriev has become a billionaire by investing in Russian technology and agri-processing companies, while receiving state subsidies for their R&D activities.^[62]

Other oligarchs have sprung up within the families of President Putin’s lieutenants. The son-in-law of Foreign Minister

• Kirill Dmitriev (Deputy head of Russian Direct Investment Fund). In February 2022, both Kirill Dmitriev and RDIF were sanctioned by the United States Treasury, following the Russian invasion of Ukraine.^[66][67]
• Petr Fradkov (CEO of Promsvyazbank, son of Mikhail Fradkov, former Russian Prime Minister during 2004-2007)
• Andrey Guryev (the former head of PhosAgro, the world's fourth largest producer of phosphate-based fertilizers)^[68]
• Mikhail Gutseriev (former owner of Russneft, one of Russia's largest oil companies)^[69]
• Katerina Tikhonova (President Putin's second daughter and deputy chair of the Russian Union of Industrialists and Entrepreneurs)^[70]
• Kirill Shamalov (director and part-owner of Sibur, a Russian petrochemicals company)^[71]
• Alexander Aleksandrovich Vedyakhin (Sberbank banking executive)
• Andrey Sergeyevich Puchkov (VTB Bank banking and football chairman)
• Yuriy Alekseyevich Soloviev (FC Dynamo Moscow club chairman and a VTB Bank executive)
• Igor Sechin (Rosneft oil executive and former Deputy Prime Minister of Russia)
• Andrey Patrushev (son of the Secretary of the Security Council of Russia Nikolai Patrushev)^[72]
• Sergei Sergeevich Ivanov (Board member of Gazprombank and president of Alrosa diamond mining)
• Yury Slyusar (director of United Aircraft Corporation and board member of Aeroflot, Russian Airlines Pjsc and United Aircraft)
• Gennady Timchenko (president of Volga Group private equity)

In popular culture

This section may contain irrelevant references to popular culture. Please remove the content or add citations to reliable and independent sources. (August 2022)

• Peter Morgan's play Patriots depicts the rise and fall of oligarchs by focusing on the story of Boris Berezovsky bringing Vladimir Putin to power and later falling out with him. The play was staged in Almeida Theatre, London in 2022.^[73]
• The 2002
  Russian movie Tycoon tells the story of emergence of oligarchs during the early years of Russian capitalism. The film is based on The Big Ration [ru], a book about Boris Berezovsky written by Yuli Dubov [ru].^[74]
• The main antagonist of the fourth episode of the first season (1x04) of
  arms dealer
  .
• One of the most recurring characters during the third and fourth seasons of
  oil empire and a dangerous criminal from Eastern Europe with ties to with the European criminal underworld and protected by various authoritarian governments
  .