The Oligarchs (27 page)

“Of course, we would return the money as late as we could, because the value of the money was falling,” Berezovsky told me. “We understood that a powerful process of inflation was going on. The devaluation of the ruble. The economists at Avtovaz didn't understand this.”

“We were considering things that those on the other side were not considering,” Berezovsky said. While chaos reigned outside the factory
gates and criminals lurked on the assembly line, Berezovsky described Logovaz, which created a network of dealerships, as above the fray. The smaller gangsters who took the cars on “consignment” didn't pay the factory back at all.

“We were the first in Russia to create a market, a real market for cars,” Berezovsky claimed. “Before, it existed only like this: the government price is this, and the ‘black price' is this. And we created a real market. Any person could come officially to a store and buy a car. That is a market, isn't it?” Years later, Kadannikov was asked if he regretted giving the cars to Berezovsky. “I cannot regret it,” he replied. “It was clear to me why we were giving them the automobiles for sale, because before it was not sales we had, but ‘distribution.' Then everything collapsed. Our grounds can keep no more than ten thousand automobiles, which is three days' work. We needed to find a place for others in order to keep the plant in production. Logovaz came to us with a dealer network.” In fact, Kadannikov was almost giving away the cars, allowing Avtovaz to be further drained of its lifeblood.

But even as he became the largest Zhiguli dealer, Berezovsky was still restless. In a philosophical mood, he had once quoted the great physicist and human rights advocate Andrei Sakharov as saying “the meaning of all life is expansion.” Berezovsky was looking for expansion. Dubov observed in
Bolshaya Paika
that the “wild outburst of uncontrolled business” at Avtovaz was “a serious threat. It was obvious that it couldn't continue this way. But it was also obvious that the factory's leadership, stuck under the various bandit ‘roofs,' was unable to undertake any constructive action.”

The factory itself was a valuable prize. In 1991 the Wall Street firm of Bear Stearns was commissioned to do a study of Avtovaz for potential foreign investors. Its report said nothing about gangsters at the gates but underscored the assets: a factory three times the size of the average U.S. automobile plant, with four assembly lines, capacity to produce 740,000 cars a year, and a country of people who were hungry, absolutely desperate to fulfill the dream of owning a car. In the Soviet Union there was one car for every 22.8 people, compared with one for every 1.7 in the United States.
²⁸
There was a fortune waiting to be had. According to Dubov, Berezovsky “decided to stake his all.”

“To take the factory for himself.”
²⁹

T
HE DAWN OF
perestroika
found Vladimir Gusinsky at a dead end. An easily insulted young man with outsized emotions, Gusinsky had trained as a stage director but failed to find a place in the world of Moscow theater. He was a Jew, and he believed that anti-Semitism was the unspoken reason why doors slammed in his face. Jewish directors had made it in the Soviet theater, but not Gusinsky. He had dabbled in staging public concerts and cultural events, and he even helped produce the entertainment for the Goodwill Games in 1986. But those days had turned sour when he got in trouble with Moscow's Communist Party committee for a harmless prank. He told them to go to hell.

In the mid-1980s, Gusinsky was going nowhere. He drove his car as an unofficial taxi, carrying passengers to and from the new international airport, earning cash to support his wife and young son, and hoping to restart his life.

Late one evening, Gusinsky, who was skinny and wore a leather jacket, stepped out of his car to smoke a cigarette. By chance, he had stopped near an electric streetcar depot. He glanced at a back lot where they kept the big electric transformers.

“I turned around and suddenly I saw a vein of gold,” he recalled. “What was it? A huge wooden reel, two meters tall, wound with copper cable—copper cable that was used for the transformer of the streetcar. It was long, pure copper. And I realized, here it is, the gold mine!”

The gold mine was copper bracelets, which had become a craze at the time. They had a faintly oriental appeal, and people wore them to fend off illnesses or evil spirits. Gusinsky took one look at the wooden spool of copper wire, officially state property, and finagled three reels for next to nothing. He found an idle state factory with a metal-stamping machine on the edge of Moscow. For some cash on the side, he arranged for high-quality metal-stamping molds to be fashioned at a closed military factory. Soon the six stamping machines were working overtime.

Gusinsky started a cooperative and quickly became king of copper bracelets in the Soviet Union. The simple bracelets carried an imprint of two tiny dragons and were imprinted with the word “Metal,” the name of Gusinsky's fledgling business. The stamping machines worked around the clock in three shifts, each machine capable of six strikes per minute. Soon the cooperative was stamping out 51,840 bracelets a day. The bracelets cost him three kopeks to make and he sold them for five rubles apiece. In a single day, his revenues were 259,200 rubles, more than five hundred times the monthly salary of a doctor of science at a leading institute. “In those days,” he recalled, “it was gigantic profit.” Gusinsky had made his first fortune and restarted his life.
¹

 

He was born October 2, 1952, an only child, into one of the millions of Soviet families that had known the pain of repression. Gusinsky's maternal grandfather was shot during Stalin's purges. His grandmother had spent ten years in the gulag and after World War II was ordered to live at least one hundred kilometers from the center of Moscow as part of the sentence. Gusinsky's mother and her sister had nonetheless entered Moscow undetected and lived with friends. His mother even attended the Gubkin Institute for Oil and Gas without being caught. Gusinsky's father, Alexander, was a simple man without any higher education. He had served in the Red Army during the war and worked at a factory making custom cutting tools.

Gusinsky and his parents lived in one room, an eighteen-square-meter
flat in a working-class neighborhood. As a boy, he often felt resentment welling up in him. “I was a youngster and I knew already that the word ‘Yid' was an insult,” Gusinsky told me. “Just like all the boys, I was very afraid of fighting at the beginning. I used to think that for sure if I hit my adversary hard and hurt him, he would certainly hit me back and I would be hurt even more—so I was scared. And then it so happened that some guys a bit older than me drove me into a corner in the courtyard and started pestering and insulting me. And I remember this strange feeling, a sudden complete sense of freedom: it did not matter to me what they were going to do to me.” That time, Gusinsky struck back, thinking he must fight back “while I still can.”

“I was never scared to fight, one street against another, courtyard versus courtyard,” he recalled. Once, a group of older men were drinking vodka and playing dominoes after work in the courtyard. Gusinsky was ten or eleven years old, and as he came home after school on a warm afternoon, the older men chided, “Here comes the little Yid.” Gusinsky erupted with rage. He seized an iron pipe and flailed at the tormentors, who ran from him, frightened that he had gone mad. “I was in tears and I was chasing them with a pipe around the whole courtyard,” Gusinsky recalled. “I was in tears from fury and insult, not from fear.”

Gusinsky grew up “on the street,” as he later put it. “I am a product of the street. I was born in the street and learned to defend myself in the street.”

After studying mathematics in high school, he felt the sting of prejudice again when he tried to enroll in the theoretical physics department at the Moscow Physics-Engineering Institute. It was a prestigious school that prepared specialists for the Soviet military-industrial complex. Jews were unwanted. “I really knew mathematics and physics well. I was absolutely confident. Everybody was telling me: they don't take Jews there.” Gusinsky said he ignored their advice. He applied—and was rejected. He was offended, and angry.

Gusinsky enrolled instead at the Gubkin Institute of Oil and Gas because his mother had studied there. Gusinsky was a bad student at the school that students fondly called Kerosinka. “I was not interested,” he acknowledged. “I took offense at everyone, almost against the whole world.” Gusinsky did not finish his studies at Gubkin. By his own account he dabbled in the black market, working as a
fartzovschik
—daring young traders who dealt in imported jeans and
audiocassettes and changed money for foreign tourists. Gusinsky recalled that he couldn't get the hang of being a so-called speculator. “I bought several pairs of jeans, then I tried to sell them and it turned out I sold them cheaper than I bought them,” he told me ruefully. Gusinsky often joked that he was not cut out to be a street trader. However, in later years, he showed a knack for entrepreneurship that far overshadowed his lack of skills as a jeans trader.

Having failed his classes at the institute, Gusinsky went into the army in 1973, where he was trained as a junior sergeant in the chemical intelligence troops. These units would enter the battle zone after a chemical or biological weapons attack. But Gusinsky's strongest memory of the army was that he had to stand his ground. “I had perfect relations with everybody in the army except for complete idiots and scoundrels,” he recalled. “I only lost several teeth in the army, so nothing horrible was going on—these were the usual fistfights; it happens. In two years in the army, I learned only one thing, the ability to fight for myself.”

After the military, he was adrift back in Moscow. A friend urged him to enroll in another prestigious school, the State Institute for the Study of Theatrical Arts. Gusinsky replied that he had not read Stanislavsky or Shakespeare or Molière. But with two months before the entrance exams, he decided to try. He spent nights poring over books. His friend reassured him, “Piece of cake—you'll make it,” but Gusinsky feared that Jews were not welcome at the institute; the theater, like film, was under strict Communist Party control.

The oral exams were given by a renowned director, Boris Ravenskikh, chief stage director of Moscow's Maly Theater. At the time of the exams, Gusinsky, still thin as a rail and angry at the world, came before Ravenskikh for the required interview. Behind Gusinsky was Valery Belyakovich, another drama student.

Ravenskikh asked Gusinsky, “Why are you going to study stage directing?”

“I want to understand life,” he replied. “A lot in this life surprises me.”

“What surprises you most?” Ravenskikh asked.

“Lack of communication between people,” Gusinsky responded. “People have lost the ability to understand each other.”
²

Ravenskikh immediately took an interest in the intense young man, who was the only one in the class with no drama experience.
“He believed very much in the idea that a stage director is a person with life experience,” Gusinsky recalled. “He was selecting people by intuition. And he told me, ‘I'll take you.'”

But Gusinsky again felt touched by anti-Semitism. Ravenskikh was warned by a party official: “What are you doing? Out of fifteen people for this year, you are taking three Jews!” According to Gusinsky, Ravenskikh did not like to be pressured. Ravenskikh stubbornly insisted that he remain in the class.

At the institute, Gusinsky was always brimming with jokes and running in a dozen directions. Despite shortages everywhere, Gusinsky found scarce white paint to spruce up the theater at the institute. He found a pair of speakers and wired up a sound system. He put his hands on a tape recorder when his class needed one. He brought scarce or banned LPs to his friends. “He gave me a record of Krokus, it was Polish!” Belyakovich recalled. “It was banned—a very expensive gift, because it was impossible to get even a Polish LP. I had no other LPs.” At the lunch hour at the institute, Gusinsky often took five friends, packed them into his tiny car—he was the only one with a car—and they dashed away from the campus for a break.

Gusinsky “was always taking us to theaters; he had connections everywhere,” Belyakovich remembered. “In those days it was hard to get tickets; it was always difficult.” It was practically impossible to get into Moscow's famous Lenkom Theater, but Gusinsky managed to do it for a preview of
Yunona and Avos,
a hugely popular rock musical that blazed new trails in the theater at the time because it lacked ideology. Gusinsky told his classmates to show up at the Lenkom at 10:30 A.M. and instructed them to wait for him outside until he gave the signal: “And then I whistle, and you follow me!”

Soon Gusinsky had them inside for a rehearsal right behind the director. The first part of Gusinsky's last name means goose in Russian, and that was his nickname. “He was swimming like this all the time,” Belyakovich said, “and we would ask him, ‘
Gus
, can you get us tickets for this?' And he would say, ‘Wait,' he had a lot of acquaintances. He was different because of his communicativeness and networks. But bringing twelve people in was very top class! He introduced us as stage directors, claiming that we had to be there.”

His teacher, Ravenskikh, left an impression on Gusinsky. Ravenskikh refused to be pushed around and was willing to experiment even within the regimented, ideological realm of Soviet theater. Ravenskikh
once was ordered to stage Brezhnev's sugary ghost-written war memoir,
Malaya Zemlya,
at the Kremlin Palace of Congresses. The book describes Brezhnev's role in a 1943 battle in which the Eighteenth Army captured and held a piece of land, Malaya Zemlya, on the Black Sea for 225 days. The role of the battle was played up after Brezhnev came to power, but Brezhnev had done nothing out of the ordinary. Ravenskikh went to the scene of the battle to ponder his assignment. He did not want to do it, but refusing would be risky. He then returned to Moscow and declared that he could not do the play and would not: Brezhnev's role had been overstated.