Oligarch pays for party that enraged Putin

A star-studded hotel opening has cost thousands of Moscow market traders their jobs. Shaun Walker explains why

Farhad, a 37-year-old migrant labourer from Tajikistan, has little in common with Russia's rich. Sporting an Adidas tracksuit, squatting with a beer on a bench outside the closed and shuttered Cherkizovsky market, he couldn't be further away from the flashy cars, luxury villas and private jets of Russia's oligarch class. But bizarrely, Farhad, along with about 100,000 traders who lost their jobs when the market in Moscow was closed down two weeks ago, may have been made unemployed as a result of the oligarchic party of parties: a tasteless show of wealth that apparently infuriated the Russian Prime Minister, Vladimir Putin.

Cherkizovsky was the biggest market in eastern Europe, a sprawling bazaar where crowds streamed to buy everything from electronics to clothes and carpets. An estimated 5,000 buses arrived at the market every day, filled with shuttle traders who would buy up cheap goods in bulk and take them back to smaller markets in towns and cities across European Russia.

Two weeks ago, the market was closed down by police in what appears to be an attack on the extravagant Azeri businessman Telman Ismailov, the market's owner. Mr Ismailov, famous for throwing some of the world's most lavish parties, opened a resort hotel in Turkey in May that reportedly cost about £1bn to build. The Mardan Palace, named after Mr Ismailov's late father, has 17 bars, 10 restaurants, a swimming pool so vast that it takes half an hour to cross by gondola, rooms decorated in over-the-top palatial opulence, and a beach made with 9,000 tonnes of artificial sand.

For the opening party in late May, pictures from which appeared widely in the Russian media, Mr Ismailov paid Sharon Stone, Richard Gere, Mariah Carey, Paris Hilton and Tom Jones to attend. At one point, Mr Ismailov danced as $100 bills came fluttering down from the ceiling.

Mr Putin allegedly found the images of a tycoon who had made his money in Russia frittering it away publicly – and in another country – distasteful in the extreme, especially at a time of crisis. A week on, Mr Ismailov's problems began.

Mr Putin complained at a government meeting in early June that raids on the market last September had resulted in the confiscation of contraband goods, but there had been no arrests. The wheels were already in motion against Mr Ismailov.

With Mr Putin having given the nod, other senior officials began turning on the market. Alexander Bastrykin, the powerful head of Russia's investigative committee, called it "a disgrace in the centre of Moscow". According to Mr Bastrykin, some people spent a year without leaving the market: "It is a state within a state," he said. "It has its own police, its own customs service, its own courts, its own prosecutor and stand-alone infrastructure, including brothels."

Soon after, state television ran a programme investigating contraband at the market and painting a bleak picture of its occupants. Investigative journalism of this sort on Russian state television is usually provided to order when a nod has been given from above. According to the TV programme, there were 17,000 citizens of Tajikistan alone working at the market, and a Tajik consular point located in its midst. "Many people don't leave the market for years on end, because they have problems with documents, and with language. They don't speak Russian, and they don't want to," it said.

Police officers added that the market was run by its own internal mafia structures, and normal police were not allowed to go anywhere near the market, hinting that top officers were complicit in the corruption. All of this was known before, of course. But it was only at the end of last month that authorities stepped in, citing sanitary and storage violations to close the market down, temporarily initially.

Mr Ismailov has denied any wrongdoing, but is believed to have fled to Turkey. For now, the people suffering the most are the traders, many of whom have lost not only their work but goods at their stalls that they don't know if they will ever get back.

Yesterday at the market, police and security men guarded the entrance to the compound, and traders lurked in small groups outside waiting for news in the summer heat. The groups of traders spoke in a cacophony of tongues – the Turkic languages of Central Asia, Chinese, and the throaty languages of the North Caucasus. There were few native Russian speakers around. The Federal Migration Service said it would deport 151 Chinese and Vietnamese nationals who had been working at the market illegally.

"We have no information about whether or when the market will reopen," said Madzhumder Muhammad Amin, head of the Russian Federation of Migrants, who confirmed that more than 100,000 people had worked at the market. "The authorities have thrown thousands of people out on to the streets and are not telling us anything. Some people still can't get their possessions back from the market; others are sleeping rough." Mr Amin's organisation set up a field kitchen to distribute free food to those workers who had nothing, but police quickly shut down the kitchen and arrested those who came to be fed for not having their documents in order, he said.

Some have interpreted the attack on Mr Ismailov as part of a co-ordinated assault on the power of Moscow's Mayor, Yury Luzhkov. Mr Luzhkov has been a close friend of Mr Ismailov for many years, and running a business like Cherkizovsky market without lofty patronage would be unthinkable. Mr Luzhkov was at the hotel launch in Turkey with his billionaire wife, Yelena Baturina, who is one of Moscow's biggest developers.

The depth of the men's friendship is evident in a video of Mr Ismailov's 50th birthday party, held two years ago, and attended by Mr Luzhkov, as well as Jennifer Lopez, who hugged and kissed Mr Ismailov and sung him a ballad, for a reported fee of $1m.

"Telman, you are our friend, our friend forever," shouts Mr Luzhkov into the microphone, standing underneath a huge chandelier and surrounded by tables piled high with extravagant food and wines. "We are with you, Telman. We have gone through life together and take joy in our friendship."

But even Mr Luzhkov can't take on Mr Putin, and the Moscow Mayor seems to have taken the hint and has promised to close the market down for good. Whether the market closure is an attack on the businessman personally or a way to get at the Mayor, it is clear that Mr Ismailov has thrown his last party, at least in Russia. Whether or not the authorities will finish the job and seek to put him on trial remains to be seen.

For now, those suffering the most are the thousands of workers – many of them without permission to be in Moscow – who have lost their jobs. A crime wave is widely predicted as the migrants run out of food and money.

"The market was my life, I've been here for three years," says Farhad, dejectedly, waiting to find out whether he will be allowed back to his stall. "I've no idea what I'm going to do now."