Russian Jewish oligarchs
2008 10 26
There is a danger of blaming 'Jewishness' as the root cause for the unsavoury reputation of many Russian oligarchs. So what if a number of them are Jewish? Should one compare and contrast what is known of the Jewishness of the Bolshevik Revolution; the Jewishness of Hollywood; the Jewishness of the Clinton administration; the Jewishness of Neoconservatism; the Jewishness of Critical Theory, the Frankfurt School, Boasian Anthropology, and Freudian Psychoanalysis; the claims of Tacitus; the claims of the early Christian church; the claims of Martin Luther; the claims of the Spanish Inquisition; and the claims of the Third Reich? Is there a relationship? -- the analytical answer must be no -- yet emotions may dictate otherwise.
It is suggested that when the Soviet Union collapsed, a bunch of alleged scheming, criminal and corrupt Jewish businessmen took over the economy and made billions at the expense of ordinary Russians. They became the Jewish oligarchs and it is said that some fled to Israel with their ill-gotten gains, where they were given refuge because the Russians wised up and began to crack down on their corruption. Furthermore it is suggested that Putin has been bribed by some of these Jewish oligarchs but only if they cooperate with him and the government. The example is given of, Roman Abramovich, Russia’s richest man, who was forced to sell 72% of his giant oil company to the government in September 2005.
There are considerable -- and some weighty pieces lambasting the Jewish oligarch -- however what is often overlooked is that most Russian oligarchs are far from popular in the state of Israel.
The below article 'Shady oligarchs and the politics of pork' is indicative of current Israeli feeling to the migrant Russian oligarch. That said -- there remains not a little untruth that some Russian oligarchs may be 'bad' people despite the fact that they are Jewish.
The Rise And Fall Of Russia's Jewish Tycoons
Russian court finds Jewish oligarch living in Israel guilty on four counts of murder
Shady oligarchs and the politics of pork
An analysis of Russian Oligarchs on Forbes 2004 Rich List:
Jewishness -- is it a coincidence?
He lives in a $3.7 million home in Herzliya Pituah and his net worth was recently estimated at $4.1 billion. He was just crowned "the richest person in Israel" by the Israeli press. No, it's not Steff Wertheimer, not Lev Leviev and not even Sammy Ofer. Try Leonid Nevzlin. If the name is unfamiliar, you're not alone. Only a little over a year in Israel, Nevzlin recently became the major shareholder in Russia's biggest oil company, Yukos, after its principal shareholder Mikhail Khodorkovsky, who is in trouble with the Russian authorities, gave him his 60 percent share. To understand the size of Yukos, consider that in 2002 alone it posted annual revenues of $11 billion and a net profit of $3b.
But the title of richest Israeli may be premature, as Nevzlin's wealth is only on paper. The assets of the company he controls have been seized by the government, which is seeking more than $27 billion in back taxes. Some say that Yukos's strength was the source of its weakness. By becoming so wealthy and so powerful, the Yukos group posed a threat to the powers that be. Nevzlin claims that Putin is taking revenge on him and Khodorkovsky for supporting Putin's opponents in the last elections. To escape an arrest warrant, Nevzlin fled to Israel in October 2003. He came with two other Jewish heads of Yukos, Vladimir Duvdov and Michail Brodno, who together own 22% of the company, or $7 billion worth. Yukos head Khodorkovsky, also Jewish, wasn't as lucky. Once considered Russia's richest man, worth an estimated $15 billion, he has sat for the past year in a Russian jail. According to the Russian press, Nevzlin took control of Khodorkovsky's stake in Bank Menatep under a shareholder agreement foreseeing a transfer of ownership if Yukos were stripped of substantial assets.
To recover punitive tax claims against Yukos, the Russian government recently sold Yukos's daughter company Yugensk at what many believe was a rigged auction. Yugensk pumps one million barrels a day, accounting for 60% of Yukos's total output. The winner of the auction was Baikal Finans, an unknown outfit registered in a provincial Russian town. It paid $9.4b. for the company. Only a few weeks later the state oil firm, OAO Rosneft, took over Baikal Finans and installed its own management team, so Yugensk is now back in the hands of the Russian state. Some have expressed fears that the re-nationalization of Yukos represents a reversal of the privatization of Russian industry and could lead to lower GDP growth. Economists say that if the fall of Yukos was an anomaly, then the Russian economy need not be overly concerned, but if it is part of a grander political plan, then trouble lies ahead.
THE FAIRYTALE story of how Nevzlin and other Jews became Russian oligarchs starts almost 20 years ago. In 1987, Nevzlin and Brodno were simple computer programmers working for the government. One day Nevzlin saw a small ad ­ a marketing company was offering its services to computer firms. He called and Khodorkovsky answered. The two men eventually became friends, and together established Bank Menatep. Shortly thereafter, Prime Minister Boris Yeltsin began the privatization scheme which was to become the source of wealth for many Jewish tycoons. His government began distributing vouchers in public companies to Russian citizens. But to the disappointment of the public, the vouchers turned out to be practically worthless. Many citizens didn't even save them.
Khodorkovsky and Nevzlin didn't mind that the vouchers were considered worthless; they realized their true value, and via Menatep began buying them up, often at laughable prices. Almost 10 years later, in 1996, Yeltsin encountered big political problems and couldn't manage more than 10% in the polls. Desperate for money, he turned to Menatep. The bank reportedly gave him $200m. for his election campaign ­ $197 more than the law allowed. After his return to power, Yeltsin thanked them by offering them their choice of shares in publicly owned natural resource companies. It is believed that some 70%-control in Russia's biggest public gas, oil and metals companies was distributed to a small group of businessmen at that time.
Yukos, for all its problems with the government, is considered the first major Russian company to issue transparent financial statements. Just prior to its fall, there was a plan to merge it with Sibneft Oil, owned by another Russian Jewish tycoon, Roman Abramovitch. This would have made them the fourth-largest oil company in world. "Khodorkovsky was so certain of his position, especially thanks to his close connections to the US Democratic party," says Eli Krichevsky, business editor at Vesty, Israel's most popular Russia newspaper. But when the Democrats fell from power he lost his overseas support and his star began to fall. Khodorkovsky has said that Yukos would have been worth $50 billion today if not for the persecution of the Russian authorities. Now its capitalization is a mere $1.5b. according to Nevzlin.
ABRAMOVITCH, WHO lives safely in England, is still the Kremlin's man, according to managing editor of Vesty, Yevgeny Seltz. But Seltz believes it could also happen to him. "There are rumors that the Russian State Ombudsman has checked up on Abramovitch and found that he bought England's Chelsea soccer team with the public funds of a Russian province he governs. "Nevzlin hasn't taken the charges sitting down. He says he plans to sue the Russian government for damages. "As shareholders, we intend to demand compensation for damages in all available international courts," he was quoted as saying by the Moscow business daily, Vedomosti. Nevzlin expects cooperation from all shareholders "because in the current circumstances a consolidated position and joint efforts in safeguarding property are more important than ever."
But that won't be easy. US investors have already filed a class action lawsuit in an American court accusing Yukos's managers of failing to inform them of the risk involved due to the government investigation of their tax break schemes.
Nevzlin has two daughters from two marriages, one 20 and one 26. Both live in London. Besides his business pursuits, Nevzlin was a "lord" in Russia's upper house. He was also very active in Russian education, and was rector of the Russian State University for Humanities in Moscow. Why Nevzlin chose to come to Israel is a good question. Some would say it's because Israel is one of only two countries that don't have a deportation agreement with Russia ­ the other being England. But there's more to it than that. Nevzlin has a long connection with the Jewish community. He was former head of Russia's Jewish Federation and a Zionist activist. Since he came to Israel, he has become active in several philanthropic pursuits. He established the Nevzlin Center for the Study of Jews of Russia and Eastern Europe at The Hebrew University. He is also a big supporter of the Diaspora Museum, which he thinks can eventually become the main Jewish museum in the world.
Nevzlin has connections to Israel's politicians, including Finance Minister Binyamin Netanyahu. The two have met several times, and reportedly like each other. Netanyahu even once tried doing a business deal with Nevzlin, but nothing came of it. Since arriving here, he has invested in several Israeli hi-tech companies on the advice of his financial advisers. He also sees great potential in the local tourist industry. He believes Israel offers the widest variety of attractions of any country and only lacks good marketing. But all that depends on funds and Krichevsky says he doesn't have any. "Most of Nevzlin's money is stuck in Yukos. He probably came to Israel with only $10m," says Krichevsky. Krichevsky believes it is unlikely that any of the Yukos heads will ever see their money again. As they say; easy come, easy go.
Russian court finds Jewish oligarch living in Israel
guilty on four counts of murder
By Reuters 01/08/2008
A Russian court found one of the top managers of the now defunct YUKOS business empire guilty in absentia on Friday of ordering several murders and attempted murders. The Moscow city court found Leonid Nevzlin, an Israeli citizen and one of YUKOS chief Mikhail Khodorkovsky's closest advisers, guilty of organizing murders including the killing of a local mayor, the presiding judge in the case said.
Nevzlin, who was appointed head of the Diaspora Museum in Tel Aviv in 2004, is accused of working with the former head of security of YUKOS, Alexei Pichugin, to carry out the murders. Pichugin was sentenced to 24 years in prison in 2006 for carrying out murders. Nevzlin has repeatedly denied the charges and says they are simply part of a plot to discredit Khodorkovsky, who says he was attacked by corrupt Russian officials who wanted to carve up his business empire, once one of Russia's biggest.
In 2006, Nevzlin admitted to meeting with murdered former-Russian spy Alexander Litivenko in Israel shortly before he was killed. According to Nevzlin, during the meeting, Litvinenko allegedly passed him documents containing classified information possibly damaging to the current leadership in Russia. In Nevzlin's estimation, Litvinenko's murder was tied to the information relating to YUKOS, and plots by Putin's government against the corporation contained in the documents.
Nevzlin fled to Israel after Russian secret services arrested Khodorkovsky in 2003, and was given Israeli citizenship shortly thereafter. Israel has repeatedly denied requests from Russia to extradite Nevzlin.
Arcadi Gaydamak, the shady Russian-Jewish oligarch who allegedly made his billions by funneling billions of dollars in arms and oil-backed loans to Angola's government in return for lucrative oil contracts with Western oil companies, is now busily trying to buy the State of Israel, Inc. Mainstream Israel has been watching, bemused and cynical but mostly passive, as he bought the Beitar Jerusalem football (soccer) team, purchased a radio station, donated millions to charity, was investigated for money laundering, created tent camps for residents of the north who were displaced during the war last summer, started his own political party (Social Justice), made back-room deals with uber-icky politicians like Benjamin (Bibi) Netanyahu and even announced that he aspired to be the next mayor of Jerusalem. But now, with his latest move, he has gone Too Far. Gaydamak has purchased a controlling interest in Tiv Tam, the chain of supermarkets that specializes in non-kosher products and stays open on Saturdays and holidays. According to newspaper reports, he paid $100 million for his shares - 80 percent above their value. In other words, he made the owners an offer they couldn't refuse.
What's so terrible about that? Glad you asked. Almost as soon as the news hit the Internet on Friday, the man who last year threw a huge bash to celebrate the very un-Jewish holiday called Sylvester (a.k.a. New Year's Eve) and most probably couldn't list the Ten Commandments if you put a gun to his head, announced that he intends to make Tiv Tam kosher. No more milano salami or imported non-kosher cheese! No more shopping for pork chops and frozen shrimp on Saturdays! Thus pronounced the Arcadi the pious: “In my view, as a Jew and as a public figure in Jewish society, the promotion, distribution and sale of pork products in Israel offends the Jewish tradition. Therefore, my first order of business will be to ban the distribution and sale of pork products.”
This story was on the front page of all three major Israeli daily newspapers on Monday. Both Yedioth and Maariv put it on the front page of their magazine (opinion and human interest) sections, and Haaretz put it on the front page of the news section. Several Israeli bloggers have weighed in on the matter in both Hebrew and English. This, it appears, is what it takes to rouse mainstream Israel from its glorious apathy - take away Saturday shopping and non-kosher food. Who knew? Yes, I am being cynical. Also, a bit of a hypocrite. Because the truth is that I love Tiv Tam - and not because I'm a big pork fan. There is a branch in my neighbourhood that opened a few months ago, and it has rapidly become my primary destination for groceries. First of all, it's wonderfully convenient: I no longer have to cut short my Friday afternoon cafe socializing in order to get to the shops before they close for the weekend. I can also buy all sorts of imported products that are not under rabbinical supervision, even though they don't contain any non-kosher ingredients - like Rajah brand chutneys and pickles, chili sauce from Vietnam, or real English cheddar cheese. I can purchase all these items at any number of small groceries around Tel Aviv, and there are dozens of shops that specialize in pork and non-kosher meat if that's what I'm looking for, but it's great to have a one-stop shopping destination - especially during the sweltering summer months, when schlepping from shop to shop for various items is distinctly unappealing. If Tiv Tam stops carrying these items, and is closed from Friday afternoon to Sunday morning, I won't have any reason to shop there anymore. I can get my staples from the makolet - the traditional corner grocery - with the added benefits of purchasing on credit and free delivery; as for the specialty items, I guess I'll go back to schlepping.
I suspect that most Tiv Tam customers feel the same, which makes me wonder how long the chain will last if Gaydamak makes good on his threat promise. There is a wide selection of small shops that specialize in non-kosher products in pretty much every Israeli city and large town, so it's not as if there are no options. Of course, a billionaire can afford to experiment. One hundred million dollars is mere lunch money for him, and it could pay off big time in political dividends if this move wins him support from the religious parties and traditionalist Jews who live in the peripheral towns like Sderot and Kiryat Shmona. And, of course, with the religious voters in Jerusalem. Tiv Tam also owns 75 percent of Maadaney Mizra, a meat processing factory that has been specializing in high quality pork products for over 50 years. The factory was originally established by Kibbutz Mizra, a veteran kibbutz that was founded more than 80 years ago - largely by German-Jewish pioneers. Gaydamak has promised that he won't fire any of the Mizra employees, but the kibbutz members are pissed off. They're proud of their factory's success, and of their secularism. They are suspicious of oligarchs and of religion, too.
Ultimately, I think, the overheated reaction to the news about Gaydamak taking over Tiv Tam and making it kosher is not really about food. This is the first time the shady oligarch's power plays have affected the lives of mainstream Israelis. It was worrying to watch him buy his way into politics, but most Israelis are so disgusted by politics and politicians that they're beyond reacting. They shook their heads at the news and laughed at the political satire shows, but that's about it. But now he is depriving them of their freedom to shop at their leisure at a one-stop shopping destination in a convenient location. They are feeling the creeping effect of religious extremists trying to impose their values on them, via a megalomaniac who is pandering to the religious minority in order to gain access to political power. A kosher Tiv Tam symbolizes an erosion of freedom for the largely secular Israeli public. It'll be interesting to see how this story unfolds. Me, I think some aspiring entrepreneur will just establish another non-kosher chain that will fill the gap.
My friend Ana Schulick, a reporter who works for Channel 9 (Channel 2's Russian TV channel), did a fascinating Day in the Life of Gaydamak report a few weeks ago. She starts the Hebrew version by showing Gaydamak doing his morning exercises with a personal trainer, as she narrates, “This is the only time of the day when Gaydamak listens to a voice other than his own.” At another point, he rapidly concludes a $100 million deal on the phone, then turns to her and says, “You work all day for, what, $300? I just made several hundred million with a single phone call.” Ana is a tough, seasoned reporter who has covered many, many episodes of As the Middle East Turns, but she told me she never felt as emotionally exhausted as she did after a day in the company of Arcadi Gaydamak.
Update: Ah ha! It appears that the shady oligarch may have changed his mind. That was fast. Apparently he is so ignorant of Jewish religious law that he actually thought he could make Tiv Tam kosher just by removing the pork products - thereby winning the support of the ultra-Orthodox rabbis. The article is full of eyebrow-raising quotes, like the one about the rabbi who supposedly said that not eating pork was more important than observing the sabbath. Wow, that's news to me.
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