Boris, the Kremlin's kingmaker

The Russian multi-billionaire Boris Berezovsky has turned his back on Yeltsin and is calling on him to go.
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Boris Berezovsky, maker and breaker of Russia's leaders, the multi- billionaire they call Rasputin because his grip on the Kremlin is so mysteriously strong, has just walked through my front door. I told the office not to expect me because I had a Russian oligarch coming round for tea. Eventually, they believed me.

He is in London for one day, a trip intended to explain himself at a time when he is being blamed for kicking loose the political avalanche in Russia. There is certainly some explaining to do. In the past three weeks, he engineered the ousting of a reformist prime minister from power, and brought back the stolid previous incumbent, Viktor Chernomyrdin, who then failed to win parliament's backing. This further undermined Boris Yeltsin's fragile credibility - the same Yeltsin to whom Berezovsky has been advisor, financier and fixer for two years.

The net result is more economic gloom and the flag of reform - at half mast for some time - in tatters. Berezovsky is clearly worried about the turmoil in Moscow, a kind of turmoil too great for even him to control. He wants to meet in a private place. We decide on my house. "That's a good idea," says his PR brightly. "He doesn't want to be too grand." Later, she calls back and asks whether it is at least grand enough the accommodate "the entourage". In Russia, Berezovsky has a personal security force rumoured to be more than 100-strong. Four years ago, a bomb planted beside his car killed his driver. Today he is travelling light, just a chauffeur, a bulky "companion", an interpreter who is scouring the hall cupboard in a vain attempt to find a clothes brush and the PR representative. Our guest is late, the tea is getting cold and everyone is edgy.

A very large, very bullet-proof Mercedes pulls up and disgorges the sort of small man invariably described as dapper. A few strands of dark hair are pulled across his forehead. His suit is navy and his tie Hermes. He takes no notice of his surroundings at all, walks straight into the room, declines the tea and gazes at me anticipating the first question.

"Before, I thought that Chernomyrdin would be the man to stabilise the situation in Russia," he says. "But he turned out to be weak. In five years in power, so many debts unpaid to the workers, government debts - he became stale in office. It turned out that he could not really do anything for Russia."

It is less than a month since Berezovsky accompanied Chernomyrdin back into the prime minister's office in the Russian parliament. The symbolism was obvious for all to see - here was a head of the Russian government effectively appointed by the country's most influential businessman. A hostile newspaper printed the sardonic headline, "Berezovsky is now our President".

It seemed like the final triumph for the most prominent of Russia's oligarchs - the ultimate confluence of power and money which has been the sad leitmotif of the country's post-Communist attempt at capitalism. But his grip on the levers of power has been weakened by the defeat of Chernomyrdin in two votes. Yeltsin did not risk a third.

The power of the Communists in the parliament and the revival of pre- Yeltsin figures such as the Central Bank chairman Viktor Geraschenko, known in the international finance community as "the world's worst central banker", and the appointment of the former Soviet planning chief as the economics guru, are unsettling for Russia's tycoons. This is not the way things were supposed to work out. They wanted to get rid of the liberal reformers who believed that the only hope for Russia's fledgling capitalism was to cut the Gordian knot which tied the oligarchs so tightly into power structures in Russia. But having heaved out their enemies, they lost control of what followed.

"I don't think I lost the battle," says Berezovsky. "When he [Chernomyrdin] was reappointed, he did not act as he should. It was a mistake to compromise with the duma [the Russian parliament] about the economic situation [Chernomyrdin sought to gain the support of the Communists by promising `economic dictatorship']. He showed weakness. I can't support a weak position.

"Chernomyrdin has used up his abilities. Primakov is the better solution for the problem. He has wide backing."

On the subject of Yevgeny Primakov, who rose under Gorbachev in the foreign affairs apparat and became head of the intelligence services under Yeltsin after the post-coup KGB spring-clean - and who is no natural ally of the oligarchs - Mr Berezovsky seems ill at ease at the prospect of a prime minister he did not make himself.

"I realised, after giving it some thought, that he was the best candidate for the post. It's a brave decision. But I don't think that Primakov and his cabinet have any idea how to move forward."

What are the chances of any continuation of reform under Primakov? "Primakov is not a reformer. But he is no supporter of the left either. It is not a question of that. It's a question now of stopping Russia collapsing completely. Maybe there will be reforms again, but only in three, four, five years." Later he adds: "The trouble with people in power is that they are not certain which path to take. They don't know whether to go backward or forward."

There is a peculiar blankness about his manner, a phenomenal concentration with no extraneous gestures. He stares straight at me, unwavering, as if into a camera lens. There is a formidable intelligence in there, but also a vast coldness. His private life is kept secret. Two of his daughters have studied at Cambridge. There may be four other children and a total of three marriages. He has a villa in Cap Ferrat - where the decision was taken to attempt the re-appointment of Chernomyrdin - a mansion in central Moscow and the obligatory luxury dacha.

I ask him about Yeltsin's position. "If Yeltsin cannot be a strong power as president, he should leave office."

Is this a call for the president's resignation? "Today I tell you that this power is no longer there and that Boris Nikoleyevich should go. He should go now."

This is his final and absolute abandonment of Yeltsin and not only Boris, but the president's family and in particular, his daughter and adviser, Tatiana Dyanchenko, to whom he was so close that they were rumoured to be lovers. Together, Dyanchenko and Berezovsky gave Boris Yeltsin the greatest makeover in election history to ensure that he defeated the Communists and Nationalists in the 1996 election. The American-style campaign, with rock concerts and advertising campaigns, saved Yeltsin's neck, although it brought on two heart attacks. After the elections, Berezovsky effectively took control of an unhealthy and increasingly confused president, who appointed him deputy secretary of the powerful Security Council, from where he has built up what one western intelligence source calls "a private KGB, but more efficient" with access to the secrets of his rivals.

"You were very close to Yeltsin," I say, "But now you desert him. Isn't it a betrayal?"

"You are making a mistake," Berezovsky replies, unblinking. "I was not supporting Boris Nikoleyevich personally, just the office of the presidency and the reforms. He has used up his abilities."

That phrase again. A friend in need is not Boris Berezovsky.

Who should replace Yeltsin?

"There are only two strong men. Aleksandr Lebed (the former general and governor of Krasnoyarsk) and Yuri Luzhkov (mayor of Moscow). "To my mind, Lebed is the man for Russia. Lebed realises that you need tough and sometimes harsh decisions, stringently controlled from the centre."

The combination of Primakov, rooted in the shadowy world between foreign policy and intelligence and Lebed, an authoritarian military figure whose attachment to democracy is questionable, is a sorry end to Russia's first attempt to join liberal capitalist democracies.

"But Primakov will have to go if Lebed is prime minister," replies Berezovsky. So the new prime minister is a transitional figure? "Yes, I think so."

If Primakov sees things differently - and serving prime ministers tend to - Russia is in for another bitter power struggle, the fight between the Berezovsky-backed Lebed, whose core support is in the armed forces, and Primakov, whose power base is the intelligence services and the state apparat.

Earlier this year, Yeltsin, in a brief period of vigour, chafed at what one aide called "Berezovsky's too-warm embrace" and threatened to banish him from the country. But he had not the nerve to dispense with Berezovsky - or perhaps feared the consequences.

Instead, Yeltsin appointed him deputy secretary of the Commonwealth of Independent States (CIS), a post which gave the businessman unlimited access to the heads of state of the former Soviet Republics. He has a lot to offer heads of state facing re-election in the next two years: not least the support of Russian Public Television, which broadcasts across the former USSR. In return, there are state budgets to service, privatisations to run and oil deals to exploit.

Should Primakov strip him of this role in order to assert his own authority, a huge and possibly violent struggle will ensue. On the top of his hand- written notes, I see that item number one is the CIS.

He makes and breaks his friends with an unembarrassed, sociopathic ruthlessness. Was it always like this? Berezovsky started out as an academic, a highly respected mathematician. He took his doctorate in 1984 in applied mathematics - the theory of optimisation and decision making, naturally. His CV is written with Soviet-era dedication to "membership of several international scientific societies" and "over a hundred scientific papers".

But it was the end of the Soviet Union which made him. As one of the sharpest "red managers" in the car industry, he recognised the potential in exploiting the difference between set state prices for cars intended for export and what they could command on the market at home.

Berezovsky set up an auto dealership called Logovaz which has evolved into a mammoth conglomerate described only as "a major financial and industrial group". There is little obvious strategy behind the adventures of Russia's oligarchs, beyond buy, buy, buy. He has ended up with parts of Aeroflot (profits from foreign ticket sales are said to end up in a Swiss outlet in which he is a shareholder), Russian International Airlines, the newspaper Nezavisimaya Gazeta as well as Russian Public Television (ORT). Considered to be the major shareholder in the oil firm Simeft, he has never confirmed involvement. "Poke a stick into a Russian company at random and you'll find Berezovsky at the end of it," says one investigative journalist in Moscow.

How all this happened is obscure. Berezovsky offers no account, plausible or otherwise, of how he ended up with a business and finance empire valued at pounds 1.8bn. Asked to declare his personal earnings recently, he claimed an income of less than pounds 30,000.

Boris Nemtsov, the brightest of the young reformers brought into the Kremlin last year by Yeltsin, has said that Berezovsky is at the heart of a "demented, warped, irresponsible capitalism - they don't pay their workers and they don't pay their taxes."

At the mention of Nemtsov's name, Berezovsky shows his first sign of irritation. "I pay my taxes like everybody else. I personally asked him to take up the post, but he was unfit for it. The reformers used up their abilities. They had to be discarded. Nemtsov never had any real influence and now he's got even less."

But the source of so many of Russia's troubles is the unrestrained rise of a class of men sharp enough to use the end of the Soviet Union to amass a small fortune and ruthless enough to turn it, in the swirl of unregulated privatisation, into large fortunes which they have since used to swallow up an immature political elite. Armed with wealth, they bought power which, in a country where business dealings are opaque and often dangerous, brought them more wealth. Markets are rigged, officials corrupt. In Russia, money smells worse than elsewhere. As Mikhail Khodorkovsky, a business partner of Berezovsky's, puts it: "Politics is the most lucrative field of business in Russia and always will be."

How could any society and economy develop healthily in these circumstances? Berezovsky waves away the question. "Why do people insist on describing me as if I were some dark force?" he says. "Nemtsov has deceived and misled people. The difficulties of Russia cannot be blamed on the oligarchs. Our interests are Russia's interests. If you want people to pay taxes, you must give them a government they trust. Otherwise, they don't believe they are getting anything for their money." It is not clear how he expects a government without revenue from the country's wealthiest businesses to operate at all, let alone gain the public's trust.

He is anxious about his reputation. Accused by Forbes magazine of involvement in the murder of the television journalist Vladislav Listiev during a savage battle for control of the main ORT channel, he sued for damages, using Peter Carter-Ruck as his lawyer. The case was deemed to be outside the jurisdiction of the British courts.

Berezovsky was questioned about the murder which, like most contract killings in the Russian business underworld, has never been resolved. Suddenly, stricken with the awful self-consciousness of asking someone sitting in the armchair opposite whether he is responsible for a murder, my Russian comes out in a hasty jumble, as if I had a guilty conscience. Berezovsky's companion starts to walk up and down.

But the tycoon is still calm, his hands folded. He answers in exactly the same rapid monotone as if I had enquired after the fate of his stocks. "It was a political killing. The case was not properly investigated. They hushed it up. What does that tell you? People were trying to get hold of the company - to blame it on me to undermine my position. People involved in the Kremlin power struggles are the ones who should be investigated. But it hasn't happened."

These are uncertain times for the nation's leading businessmen. The old networks which brought them to power are now in vicious competition with one another. The Yeltsin years are drawing to a close. The fight for the future has begun. But it is the future of the past. Late Communist Russia reborn: a doomed attempt to turn back the clock to central plans and controls. Berezovsky has no intention of being turned back with it. He is telling us that he has both the money and the stomach for a fight.

In his dealings with Yeltsin and Chernomyrdin, he is said to have presented them with sheets of paper on which he had doodles squares. Inside the squares, he would write the names of people he wanted appointed to government and top economic posts. The next day, Tass would carry news of the appointments.

When he is gone, I notice that he has left two pieces of paper behind. On the first is the checklist of topics and names. On the second he has drawn three large squares, one at the top, two underneath, with a dot inside each. There are no names inside.