Oligarchs

   During the late Soviet period, private enterprise returned to the Soviet Union, allowing a number of well-connected entrepreneurs to benefit from the introduction of a limited market economy. In some cases, these individuals were veterans of the perestroikaera black market, while others moved into the business world from academe, the sciences, or other occupations. Through the use of political and social connections (blat), these budding capitalists began to develop small commercial empires in a number of fields, including banking, industry, and computers. During the Soviet period, they were dependent on ties to the Communist Party of the Soviet Union (CPSU), the nomenklatura>, and/or the Komsomol network. However, under Boris Yeltsin’s administration, a small clique of businessmen became corporate tycoons through voucher privatization under the direction of Anatoly Chubais and Yegor Gaydar. The corrupt loans for shares program further transferred large amounts of the country’s wealth into the hands of a small economic elite, which included Boris Berezovsky, Vladimir Gusinsky, Mikhail Khodorkovsky, Roman Abramovich, Vladimir Potanin, Vahid Alakbarov, Viktor Vekselberg, and Mikhail Fridman, among others. While these mostly Jewish oligarchs were loathed by the Russian masses, their influence over the country’s economy, media, and political system made them nearly untouchable in the mid-1990s. Good relations with Yeltsin and his inner circle, colloquially known as “the Family,” certainly aided the rise of certain oligarchs, but there were anti-Yeltsin oligarchs as well. During the 1996 presidential election, a number of wealthy businessmen—particularly Berezovsky—shifted their allegiance to Yeltsin, fearing the alternative, that is, Gennady Zyuganov and the Communist Party of the Russian Federation (KPRF). The 1998 ruble crisis severely impacted the fortunes of these magnates; however, most survived the economic turmoil. The rise of Vladimir Putin presented an existential challenge to their political influence in Russia. Early in his first term, Putin demanded that the tycoons abstain from politics if they wanted to preserve their economic empires. Gusinsky and Berezovsky soon fell afoul of the new president and were forced into exile. Khodorkovsky, the richest man in Russia, took on Putin, and was arrested on charges of fraud and tax evasion in 2003. A new cadre of pro-Kremlin oligarchs saw their fortunes rise during the Putin years, including Oleg Deripaska, while others—like Abramovich and Fridman—were able to establish cordial relations with the new president. The 2008–2009 global financial crisis saw the oligarchs’ fortunes wane, with Moscow scooping up many of their most lucrative assets in what some have called a “deprivatization.” Despite this, a small number of economic high-flyers continue to dominate the Russian economy today.