Professor Richard Sakwa: Both were ‘gangsters’ – but one was cleverer than the other


Related Topics

The long-running saga of Boris Berezovsky versus Roman Abramovich opened the window on how oligarchical capitalism was established in Russia in the 1990s.

The judgement ruled in favour of Abramovich’s contention that Berezovsky in fact had not really played much of a part in the establishment of the Sibneft oil company. Instead, he had provided political cover, and had not been the prime mover. Instead, he received rather large payments for political services, above all acting as the political ‘roof’ (‘krysha’) with President Boris Yeltsin and others. We learnt a lot about how capitalism was built in Russia, including details of Berezovsky’s less than glorious role, although the big picture has not changed.

Several key points emerge out of the judgement. First, Berezovsky was always more interested in politics than in business. He used companies for the cash flow that they generated, rather than as an opportunity to invest. Berezovsky was a ‘political capitalist’. He differed from others of the era, notably Mikhail Khodorkovsky at the head of the Yukos oil company, who in the end was able to reinvent himself as a ‘corporate capitalist’. All the so-called oligarchs were ruthless in the exercise of political and judicial power to win their assets, but Khodorkovsky and others went on to become the leaders of extremely successful businesses. So did Abramovich, and the trial provided a lot of genuinely new material on how he built up Sibneft.

The second point is the heart of the judgment: that Abramovich did not use intimidation to force Berezovsky to sell his shares in Sibneft as he went into exile in 2000. This provides a powerful insight into how President Vladimir Putin reined in the oligarchs at this time. A few months earlier Vladimir Gusinsky had been effectively coerced into selling his media empire and business interests as he left the country, and this acted as a clear warning to all the others. Berezovsky took the rather large hint that the era in which he could claim to act as a power broker was over, and he sold up to his partner, Abramovich. At that point Putin could act the innocent, and insist only that all oligarchs should be kept ‘equidistant’ from the authorities.

All the oligarchs were kept equally distant, but some were more distant than others. Abramovich was the winner in 2000, buying up Berezovsky’s shares, but in the wake of the expropriation of Yukos in 2003-04, he too was forced to sell up. In September 2005 Sibneft passed into the ownership of Gazprom.  Abramovich made a hefty profit: but the sale really was one that he could not refuse. Sibneft has disappeared and is now Gazprom Neft. As far as public opinion in Russia is concerned, both were gangsters; but one was cleverer than the other in adapting to new realities.

This tells us a lot about how business relates to the state today. Although not averse to using overt coercion on occasions, as with the Yukos case, the Putinite system prefers to work though a system of hints and rewards. This is a system that Abramovich understands perfectly, and thus remains a powerful player within Russia. Berezovsky (and Khodorkovsky) failed to grasp how things had changed, and both fell victim to a system which they had in large part created.

Few Russians will have much sympathy for the two slugging it out in the London court, but the Putinite elite will smile with satisfaction as their arch-enemy Berezovsky is humiliated.

Richard Sakwa is Professor of Russian and European Politics at the University of Kent and an Associate Fellow of the Russia and Eurasia Programme at the Royal Institute of International Affairs, Chatham House.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Read Next
David Cameron faces the press as he arrives in Brussels for the EU leaders summit on Thursday reuters  

On the Tusk of a dilemma: Cameron's latest EU renegotiation foe

Andrew Grice
John Profumo and his wife Valerie Robson in 1959  

Stephen Ward’s trial was disgraceful. There can be no justification for it

Geoffrey Robertson QC
Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas