Earth Shift Report 3:
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PUTIN & RUSSIAN OLIGARCHS
THE CRUCIAL DIFFERENCE BETWEEN RUSSIAN & UKRAINE OLIGARCHS
Russia went through the oligarch infestation and wars in the 1990s. I worked at Smith Barney as financial consultant at the time and I managed some of the Russian oligarch assets; therefore, I am quite familiar with the Russian oligarch class. I described some of the oligarchs and their modus operandi in my two novels, GOLD TRAIN and THE EARTH SHIFTER.
Yeltsin was under the oligarch influence. Being a complete child when it came to economy and finance, he had no idea that the oligarchs, together with their Western handlers, were leading the country into abyss.
Although it is not the focus of this report, it must be noted that many, although not all, Russian oligarchs (and of course, Ukrainian too) served as agents for the Western shadow interests. The name of the Rothschilds is usually mentioned in relation to Khodorkovsky. Some acted on behalf of Western conglomerates, such as Exxon, Shell and others. That said, I strongly suspect that some of the former Russian oligarchs weren’t fronting Western oligarchs at all. In fact, they were direct assets of the CIA, Mossad or MI6. One such example is Jewish-Russian oligarch Boris Berezovsky, who had Yeltsin’s ear. Throughout the ’90s there was no bigger name and bigger oligarch in Russia than Boris Berezovsky, until Putin got on his case.
After that Beresovsky quickly fled to London. He was an agent of MI6 and CIA, and possibly of Mossad as well. Berezovsky’s story is very remarkable. A couple of years ago, he wrote a secret letter to Putin, begging for pardon and for the possibility of returning back home to Russia. According to many witnesses, in his later years, he missed his homeland terribly, always asking for treats to be brought to him from Russia and greedily listening to the Russian news. The letter was sent with a trusted messenger and Putin got it. Berezovsky could tell a lot of things, including how and by whom the wholesale looting of Russia was organized in the ‘90s. Shortly after, Berezovsky suddenly ‘hung’ himself in his London mansion.
This wasn’t the original story. Originally, the UK authorities were supposed to blame Putin and Russians for Berezovsky’s death, just as it happened a few years prior with ex-KGB Litvinenko. Russian authorities got the wind of what was to come and quickly produced Berezovsky’s letter to Putin, in which he was asking for pardon and return home in exchange for spilling the beans on his handlers. Then, the hastily put together ‘self-hanging’ theory emerged, despite strange bruises on Berezovsky’s neck.
After Putin came to power in 2000, the status quo in Russia changed. It shifted gradually, but Putin let everyone know that he would not allow the wholesale looting of Russia any more. Putin slowly but surely restructured tax laws, making oligarchs and foreign oil interests pay taxes – something that, amazingly, Yeltsin and his sold-out advisors were unable to figure out for 8 years in power!
Those who didn’t want to play ball went to jail, like Khodorkovsky. Others, like Berezovsky, fled the country, taking their assets with them. The Western howling was deafening for years, accusing Russia of the roll-back of democracy and a return to dictatorship. Of course by then I left Smith Barney and generally US corporate world, having understood what was happening and having been disgusted with all that I discovered.
Russian oligarchs were losing power and influence in Russia throughout 2000s. Khodorkovsky was in jail on official charges of money laundering and tax evasion (all true), but in reality, for trying to execute a coup d’état and for attempting to sell the country to the US. (Incidentally, I write about that in THE EARTH SHIFTER; oligarch Konukovksy in the book is modeled after Khodorkovsky). The last oligarch who attempted to obtain the power in the country officially, via presidential elections, was Mikhail Prokhorov in 2012. One of Russia’s richest men, he ran against Putin. Prokhorov got a surprise almost 8%. Putin got almost 64%.
After winning, Putin invited all former presidential candidates who ran against him, aka, leaders of opposition parties, to his Kremlin office and consulted with them on various matters, making sure their voices were heard. This was basically the end of Prokhorov’s political ambitions. I think Prokhorov isn’t dumb. Hopefully, he understood he had no chance against such man.
I usually say that the class of oligarchs ceased to exist in Russia in 2013, but it may have happened as early as 2012, after Prokhorov’s failed bid. Presently, Russia has plenty of rich people and lots of business people. The business class is quite active and there are lots of those who have made their fortunes by building their business from scratch through their own wit and hard work, after the roaring ’90s.
Prokhorov isn’t one of them. He is the owner of Norilsk Nickel, which was the giant Soviet-built enterprise and the world’s largest producer of nickel and palladium. Norilsk Nickel was one of the victims of the ’90s privatization, having been given away literally for free. Prokhorov also owns gold-producing companies. All that he acquired on the cheap during the 1990s wholesale robbery of the country, when prized Soviet properties were sold for pennies. That said, Prokhorov has proven to be a very good manager, and responsible owner. He pays his taxes and conducts his business transparently.
Here is Putin’s plan that is now bearing fruit: oligarchs who acquired their properties that way, but who proved later that they managed them well, cared about their workers, paid taxes, didn’t launder money, conducted honest business and didn’t try to undermine existing authorities, could continue owning what they had, as long as they invested into the country.
I foresee additional change coming soon. Some are proposing a one-time, retroactive tax on assets acquired during the ‘90s for an unfairly low price. These former oligarchs may be required to pay a fee of varying amount.
I like this idea. My advice to Russians to do it this way:
This retroactive tax must be calculated based on a variety of factors, including the fair and prevailing global asset value at the time of purchase, how much the asset has been developed since, how much out-of-pocket money has been invested to develop such asset, and how much more profitable a plant or company may have become. If a person invested a lot of their own money, hired additional employees and expanded the company, they may not owe anything. Many Russian business people expanded and modernized their Soviet inheritance and made it pay.
If they just sat on their acquisition, doing nothing with it and simply milking the original Soviet asset, they should owe a lot, with interest. Some may have to sell their company or give it back to the Russian State, to repay what they owe. I can tell you that this proposed new tax could do wonders for the Russian business class investing in their companies to avoid paying tax, therefore boosting Russian productivity and GDP! I hope this tax is enacted soon.
Oligarch Roman Abramovich, Governor of Chukotka
Roman Abramovich is a great example of how Putin got some of the oligarchs to invest back into the State. Abramovich is one of those who got filthy rich on the unfair ’90s privatization. He was a Berezovsky crony. But later, there was a falling out. Not only that, Abramovich apparently grabbed some of Berezovsky’s assets when the latter fell out of favor, for which Berezovsky sued Abramovich in London court.
One thing Abramovich did much better than Berezovsky was to work with others and achieve a compromise. Putin told him: fine, you can keep your assets, which you manage pretty well, but under one condition. You become the governor of Chukotka. Historically, in Russia wealthy people gave back to the country by serving the State and helping locals.
The Chukotka peninsula is one of the easternmost Russian territories, which has been neglected for the past 25 years. There is no ready access to oil or gas there, with a lot of pristine wilderness. The population is rather small and climate is very harsh, therefore developing infrastructure is very expensive. Consequently, there was no interest in developing it, like for instance, on the nearby Island of Sakhalin.
If you ask me, it’s actually a great idea to preserve some pristine corners of the globe, unspoiled by humans. But locals do demand modern conveniences.
Abramovich had to demonstrate his worth as a governor to earn his ‘pardon,’ so to speak. During his tenure Abramovich invested his own money into building roads, renovating the city and building hospitals, schools and new companies in order to give locals steady employment. There was a situation when Abramovich had to pay regional salaries out of pocket and he had to shell out to fix housing too. Basically, the region was fixed up using his own money. After several years as Chukotka governor, locals started talking about naming one of their streets, or even a town, after Abramovich as a thank you. This was what Putin wanted to hear – Abramovich did a good job; he earned his pardon.
When Medvedev became president, Abramovich appealed to him to be ‘let go.’ Medvedev at first said he was still needed for the second term as governor since he was doing so well, but I think after some consultations with Putin, he did let him go. After that, Abramovich moved to London, preserving his money and the good will of the Russian government.
This is a very good example of how Putin put the oligarchs, their business skills and their money to work for the good of the State and society. He didn’t fight with them, he didn’t take their assets and money away (except for Khodorkovsky and a few others, who committed direct treason). These drastic measures would have been disruptive for the economy and would have created an even bigger backlash against Russia in the West.
Instead, Putin made the oligarchs serve the country they once robbed.
Another example of how he did it was Sochi. Putin compelled practically all biggest Russian oligarchs to invest in the Sochi 2014 Winter Games: from building hotels and sports venues to financing high-speed railroad, trains, new port and train station. This is who paid for a chunk of the $50bln invested. As is well-known, most Olympics don’t pay for themselves since many venues don’t find enough usage after the Olympics are over. If Sochi doesn’t pay for itself, a lot of it will be the former oligarchs’ loss. If it does – good for them, they will make profit.
Ukraine oligarchs are very different. They never invested in anything, just demanding more and more eggs from the golden goose they stole from the people. As a result, they killed that golden goose.
Certainly, in the case of Russia we also have a president who isn’t only intelligent and balanced, but who is also a wise leader of a sovereign country, who cares a lot for the well-being of his people and land. It is no accident that US, France and some other countries, have a movement, “Putin for President.” They want to borrow Putin for their respective countries. It is also no accident that Putin has recently topped the TIME 100 Readers’ Poll, leaving any competition far behind. More here: Vladimir Putin Steals the Show in TIME 100 Readers’ Poll.
Meanwhile, in Ukraine we have a regime that consists of foreign marionettes, bandits and fascists. At best they are incompetent, at worst – simply insane. For the past 24 years, Ukraine has been under oligarch/raider/mafia control. In addition to that, it is now under the control of the violent and greedy fascist gangs. As if all that wasn’t enough, Ukraine is firmly under foreign management.
Tragically, Ukraine has no possibility of resolving any oligarch-related problems under such circumstances. The euro-maidan slogans were ‘away with oligarchs.’ Instead, they got one of the biggest oligarchs of them all – Poroshenko – as their president.
Ukraine oligarchs finally understood that they were also losing from the war with Donbass and standoff with Russia. At least some of the oligarchs, whose assets are threatened and whose power is dwindling, wouldn’t mind the end of war in Donbass. They may be even trying to pressure Poroshenko to keep peace and agree to federalization. Poroshenko may even be interested in that himself.
But there are two other forces in Ukraine: 1. ukro-nazis and their armed battalions that are ready to go to Kiev and start another maidan; 2. US, whose interest is to keep as much turmoil and disorder in Ukraine as possible for as long as possible.
It is a further tragedy of Ukraine that oligarchs themselves have created the monster, inviting and encouraging these dark forces. Karma is a bitch – oligarchs can’t win against those two forces. Therefore, however you look at it, the fights between all factions will continue until… all these ugly and dark forces are booted out of Ukraine by a popular uprising.
The rich Soviet inheritance isn’t the only thing that has ended in Ukraine. For years, the oligarchs and the rest of Ukrainians lived off leaching the Russian transit gas to the EU, which they stole from the pipes. Ukraine also lived better than economically predetermined because of the heavy discount on Russian gas it received for years as another left over vestige of the Soviet system, when Russians often robbed themselves to give to the republics. But all of it ended with the advent of euro-maidan and war on all fronts against Russia. Gas price is up and Russian loans no more. As a result, Ukraine is facing total collapse.
Ukraine in this state can only be unified if there is war. During active war in Donbass the oligarchs all seemed united in their hatred against Donbass and Russia. The shift in priorities occurred once the shaky peace process was established. Russia insisted on peace negotiations because Donbass was in desperate need of reprieve for its citizens. But apart from that, the brilliance of the Russian insistence on peace process was that the moment peace started spiders started devouring each other.
In truth though, the country is so filled with energy of anger, confusion and confrontation that this destructive energy has to be directed against someone. If it’s not directed against Donbass, it has to be directed against other forces. The problem is that with very weak central government and almost non-existed legal system, including inadequate private property protection laws, it becomes extremely destructive.
Oligarchs are used to easy money they stole during the ’90s privatization robbery and through later re-distributions of property. Now, with the dying economy, they are staring into abyss. They are losing assets and their cash flow is catastrophically drying up. Bankruptcy is looming.”
“Pictures – top to bottom, left to right:
1. No comment: Putin as Bad-Good Santa for naughty and nice children, Mikhail Khodorkovsky and Roman Abramovich.
2. Khodorkovsky during trial.
3. Putin receiving Abramovich – notice their body language!
4. Roman Abramovich as governor of Chukotka, with indigenous Chukchas.
5. Abramovich being congratulated by David Beckham for Russia winning World Cup 2018 (Abramovich was an active part of the Russian bid – another way Putin used oligarch influence for good).
6. Swimming in excess money, Russian oligarchs jumped on ownership of prestigious Western sports clubs. For example, Mikhail Prokhorov bought New York basketball club Brooklyn Nets. Roman Abramovich is the owner of the British football club Chelsea. From left to right: Chelsea and Abramovich celebrate winning a trophy; anti-Abramovich protest by ukro-nazis in the UK; the oligarch scandal – Boris Berezovsky sues Abramovich in the UK court with similar accusations as ukro-nazis to the left. Berezovsky accused Abramovich in taking his part of the joint business and in being Putin’s lackey, to put it simply. UK court didn’t find substantiated evidence confirming Berezovsky’s complaint. Shortly after, Berezovsky secretly wrote to Putin asking for pardon in exchange for juicy intel against his US/UK bosses. After that, Berezovsky ‘committed suicide’ in his London home. This unlikely verdict was given by London police despite suspicious bruises on his neck.”
There are more pictures inside the report. Some new, fresh ones have just been added!
For the full picture on Russian and Ukraine oligarchs, Putin, Poroshenko, Kolomoysky, and what wizard behind the curtain is really pulling the strings, read
Earth Shift Report 3 OLIGARCH WARS
Or go to all EARTH SHIFT REPORTS!