The Oligarchs Or - How the Virgin became a Whore

by Uri Avnery
The Western World was led to believe that Communism, along with the Berlin Wall, just 'collapsed'. The truth was somewhat different. The following article by an Israeli journalist allows us a glimpse of what really happened under the presidency of Boris Yeltsin.
But immediately following on from Uri Avnery's disclosure, we republish Ivor Benson's 1981 exposé of "The Underground Millionaires of the Soviet Union". Written over twenty three years ago, the Soviet Union was even then giving up its secrets, but at the time not too many Westerners could grasp the significance of what was written. Contrary to Uri Avnery's understanding 'the virgin was despoiled long ago'.
"This is a TV series about Russia. But it could have been about Israel. Or about the United States. It is entitled "The Oligarchs" and is now being screened on Israeli television. Some of its episodes are simply unbelievable - or would have been, if they had not come straight from the horses' mouths: the heroes of the story, who gleefully boast about their despicable exploits.

Series produced by Israeli immigrants from Russia.
The "oligarchs" are a tiny group of entrepreneurs who exploited the disintegration of the Soviet system to loot the treasures of the state and to amass plunder amounting to hundreds of billions of dollars. In order to safeguard the perpetuation of their business, they took control of the state. Six out of the seven are Jews.

The rule of the few
In popular parlance they are called "oligarchs" - from the Greek word meaning "rule of the few".
In the first years of post-Soviet Russian capitalism they were the bold and nimble ones who knew how to exploit the economic anarchy in order to acquire enormous possessions for a hundredth or a thousandth of their value: oil, natural gas, nickel and other minerals. They used every possible trick, including cheating, bribery and murder.
Every one of them had a small private army. In the course of the series they are proud to tell in great detail how they did it.
But the most intriguing part of the series recounts the way they took control of the political apparatus. After a period of fighting each other, they decided that it would be more profitable for them to cooperate in order to take over the state.
At the time, President Boris Yeltsin was in a steep decline. On the eve of the new elections for the presidency, his rating in public opinion polls stood at 4%. He was an alcoholic with a severe heart disease, working about two hours a day. The state was, in practice, ruled by his bodyguard and his daughter; corruption was the order of the day.
The oligarchs decided to take power through him. They had almost unlimited funds, control of all TV channels and most of the other media. (Sounds very like Australia where 2 men control the state, via the media properties they own - The Editor) They put all these at the disposal of Yeltsin's re-election campaign, denying his opponents even one minute of TV time and pouring huge sums of money into the effort.
(The series omits an interesting detail: they secretly brought over the most outstanding American election experts and copywriters, who applied methods previously unknown in Russia.)

The campaign bore fruit
Yeltsin was indeed re-elected. On the very same day he had another heart attack and spent the rest of his term in hospital. In practice, the oligarchs ruled Russia. One of them, Boris Berezovsky, appointed himself Prime Minister. There was a minor scandal when it became known that he (like most of the oligarchs) had acquired Israeli citizenship, but he gave up his Israeli passport and everything was in order again.
By the way, Berezovsky boasts that he caused the war in Chechnya, in which tens of thousands have been killed and a whole country devastated. He was interested in the mineral resources and a prospective pipeline there. In order to achieve this he put an end to the peace agreement that gave the country some kind of independence. The oligarchs dismissed and destroyed Alexander Lebed, the popular general who engineered the agreement, and the war has been going on since then.
In the end, there was a reaction: Vladimir Putin, the taciturn and tough ex-KGB operative, assumed power, took control of the media, put one of the oligarchs (Mikhail Khodorkovsky) in prison, caused the others to flee (Berezovsky is in England, Vladimir Gusinsky is in Israel, another, Mikhail Chernoy, is assumed to be hiding here- Israel.)
Since all the exploits of the oligarchs occurred in public, there is a danger that the affair might cause an increase in anti-semitism in Russia. Indeed, the anti-semites argue that these doings confirm the "Protocols of the Elders of Zion", a document fabricated by the Russian secret police a century ago, purporting to reveal a Jewish conspiracy to control the world.
(In retrospect) Moving from Russia to America - the same thing happened, of course, in the US, but more than a hundred years ago.
At the time, the great "robber barons", Morgan, Rockefeller et al., all of them good 'Christians', used very similar methods to acquire capital and power on a massive scale. Today, it works in far more refined ways.
In the present election campaign, the candidates collect hundreds of millions of dollars. George W. Bush and John Kerry both brag about their talent for raising enormous sums of money. From whom? From pensioners? From the mythical "old lady in tennis shoes"? Of course not, but from the cabals of billionaires, the giant corporations and powerful lobbies (arms dealers, Jewish organisations, doctors, lawyers and such). Many of them give money to both candidates - just to be on the safe side.
All of these expect, of course, to receive a generous bonus when their candidate is elected. "There is no such thing as a free lunch", as the right-wing economist Milton Friedman wrote. As in Russia, every dollar (or rouble) invested wisely in an election will yield a ten, or hundred-fold return.
The problem is rooted in the fact that presidential candidates (and all other candidates for political office) need ever increasing amounts of money. Elections are mainly fought out on TV and cost huge sums. It is not a coincidence that all the present candidates in the US are multi-millionaires.

· The Bush family has amassed a fortune from the oil business (helped by its political connections, of course.)
· Kerry is married to one of the richest women in America, who was once the wife of the ketchup king, Henry John Heinz.
· Dick Cheney was the chief of a huge corporation that has garnered contracts worth billions in Iraq.
· John Edwards, candidate for Vice President, has made a fortune as a trial lawyer.

From time to time there is talk in America about reforming election finances, but nothing worthwhile ever comes of it.
None of the oligarchs has any interest in changing a system that enables them to buy the government of the United States.
In Israel, too, talk about "Money and Power" is now in vogue. Ariel Sharon and one of his two sons have been suspected of accepting bribes from a real estate magnate. An indictment was blocked by the new Attorney General who happened to be appointed by the Sharon government at the height of the affair.
Another investigation into Sharon and his sons is still pending. It concerns millions of dollars that reached his election coffers by roundabout routes, crossing three continents.
Shimon Peres' connections with multi-millionaires are well-known, as are the huge sums poured out by American Jewish multi-millionaires for extreme right-wing causes in Israel.
One of the Russian oligarchs is the part-owner of the second biggest Israeli newspaper.
A political scandal concerning the Israeli Minister for Infrastructure has mushroomed into an affair involving giant multi-national corporations competing for contracts for supplying natural gas to the Israeli Electricity Company, an affair of billions in which underworld figures, politicians and private investigators play their parts. This disclosure has made it clear to Israelis that here, too, politicians of the highest rank have long ago been acting as mercenaries for powerful financial interests.
These facts must alarm everybody who cares about democracy - in Israel, Russia, the United States and elsewhere. Oligarchy and democracy are incompatible. As a Russian commentator in the TV series said about the new Russian democracy: 'They have turned a virgin into a whore.'"
Uri Evnery is an Israeli writer and peace activist. Contact him at >evnery@counterpunch.org<

Putin calms business elite
"After a decade of pumping Russia's fields dry for quick profits amid the chaos of the Yeltsin era, Russia's tycoons were beginning to behave more like real owners. The year 2000 marked an important change. Oil prices soared, and Mr. Putin came to power as president with a calming message for the business elite. The state wouldn't question whether they'd acquired their companies legally as long as they started investing their profits at home rather than stashing them in foreign banks." "Dow Jones Newswires" 26th February, 2003

UNDERGROUND MILLIONAIRES OF THE SOVIET UNION

A RIDDLE……….
We have been permitted to peep into what Winston Churchill once described as "a riddle, wrapped in a mystery inside an enigma" - but not for our final disillusionment, we may be sure.
"How to Succeed In Business Where Business is a Crime" says Fortune's supplementary headline.
First of all, then, let us take a look at the "business" which has won such rich rewards while practised under-ground in the world's most efficiently and most rigorously conducted police state, whose citizens are said to live in constant dread of the KGB and its vast army of informers.
Writes Simis: "Everyone knows that the Soviet state is the monopoly owner of all means of production and that private enterprise is a crime. But the remarkable reality is that in the Soviet Union a great many private enterprises operate - at great profit. Indeed, a network of privately controlled factories spreads across the whole country and these factories manufacture goods worth hundreds of millions - perhaps even billions - of roubles (A rouble is currently worth $1.40...)"
Private enterprise, he goes on, cannot for obvious reasons handle items like motorcars and machinery, but must concentrate on items of the kind that most people want and can afford to buy, like clothing, shoes, artificial-leather goods, sunglasses, costume jewellery, recordings of Western popular music, etc.
But how do they manage to do that in a country where every citizen is encouraged to spy on his neighbour?
Part of the answer: "A private enterprise will co-exist under the same name and the same roof, with a state factory; it could not exist without this cover. In this symbiotic relationship the state factory manufactures goods as called for by the state plan. These goods appear on the factories' books and are distributed through commercial channels for sale. But alongside these official goods the same factory is manufacturing goods not registered in any documents." Goods of the first kind are called "registered for" and the others, in the jargon of the underground are described as "left hand".
Simis tells us that not only are there "tens of thousands" of such factories all over the Soviet Union, most of them concentrated in the great towns and cities like Moscow, Odessa, Tiflis, Riga and Tashkent, but there exists also a vast distribution network handling a "left hand" trade worth possibly billions of dollars a year.
One "company" is mentioned, part of the "Glazenberg empire" which owned so many factories that it was forced to set up its own marketing group which proceeded to organise outlets of its own in 64 towns and regions - in addition to all the outlets provided by the state.
And who are these daring and energetic businessmen who appear to have fashioned for themselves cloaks of invisibility?

JEWISH BUSINESSMEN
Writes Simis: "For historical reasons, the underground business milieu in the large cities of Russia, the Ukraine and the Baltic republics has been predominantly Jewish. While my clients included Georgians, Armenians and members of other groups, the great majority were Jewish - like myself':
What "historical reasons"?
Simis says that the Russian Jews, after having been discriminated against by the Czarist regime, were "liberated" by the Bolshevik Revolution, thereafter throwing themselves eagerly into spheres of life previously closed to them, like science, the arts, literature, etc. He tells us that during and after World War II, Stalin turned against the Jews, many of whom were then forced to find outlets for their energies in "underground business':
Elsewhere in his article, however, he tells us about one Isaac Back who in the mid 1930s set about creating a family company which by 1940 (when Stalin was at the peak of his power) owned "at least a dozen factories manufacturing underwear, souvenirs and notions, operating at the same time a network of stores in all the republics of the Soviet Union':
Some of these Jewish entrepreneurs, including Back and one of the three Glazenberg brothers were prosecuted and imprisoned, but evidently not enough of them to discourage the rest. It was decided to "sacrifice" young Lazar Glazenberg, says Simis, whose job it was to defend them in court, "at least partly because of his playboy life-style as reflected in his two dozen suits and the wardrobe of his wife..."
It is significant, surely, that although private enterprise carried on in secret must be regarded as the most dangerous and destructive form of sabotage, being the exact antithesis of Marxist socialism, there is no mention of this class of big-fish offender among the hundreds of individual cases discussed by Alexander Solzhenitsyn in the three volumes of his Gulag Archipelago; indeed, Jewish prisoners are rarely mentioned by Solzhenitsyn, whereas, judging by their names, there was no scarcity of Jews among the slave camp bosses - Aron Solts, Jakov Rappaport, Matvei Berman, Lazar Kogan and, most notorious of all, Naftaly Frenkel who appears to have master-minded the whole technique of slave labour. Nor have big businessmen figured at all prominently in the great show trials which the Western media were permitted to report and dramatise.
Next question:
Why should this kind of activity with its almost fabulous rewards, plus attendant dangers, be confined almost exclusively to Jewish citizens of the Soviet Union?

DOLLARS FOR ISRAEL
Simis gives us what is obviously an important part of the answer: "The sense of national identity among Jewish underground businessmen is strong - much stronger than that of the Soviet Jewish intelligentsia. There may not be many among them who understand what Zionism is all about - even fewer who are prepared to relinquish their fortunes and emigrate to Israel - yet I never met a single one who was indifferent to the fate of that country and who did not feel a blood relationship with it. It came as no surprise to me that during the Six-day War the underground businessmen in many cities donated large sums in dollars - not roubles but dollars - to Israel'
These underground business tycoons would have been much assisted, we may be sure, by another circumstance revealed by Simis:
"Nevertheless many Jewish underground businessmen of all ages eagerly join the Communist party for desperately practical motives: to enhance their social prestige and gain some shield - beyond bribery-to keep them from being prosecuted by the DCMSP".
Here he seems to have forgotten what he told us a few paragraphs back - that Jews were forced into underground business by discrimination that excluded them from the party and state hierarchy.
Simis explains how the wheels of the "left hand" industry are copiously oiled with bribes. The blue-collar factory workers are bribed with additional tax-free incomes to work for the private operator and keep their mouths shut, as are also the clerical personnel and foremen; bigger bribes are paid to officials whose duty it is to establish quantity and quality norms for goods manufactured for the state, giving the private operator his main supplies of raw materials in the form of surpluses which don't have to be recorded; and the biggest bribes of all are those paid to officials of the DCPSP, which is an arm of the KGB whose precise task it is to "combat the misappropriation of Soviet property".

TO WHAT END?
It would appear that the underground businessmen who are caught and punished are those whose operations have become too glaringly obvious, like one Golidze who "owned two magnificent houses, luxuriously furnished with antiques bought from dealers in Moscow and Leningrad" and who "entertained officials with banquets which would go on for hours..."
Most Soviet tycoons try not to be too ostentatious as they stash away most of their wealth in foreign currencies, precious stones, metals and gold coins. Simis tells us that during the 1960s and 1970s the salon of one Elizabeth Mirkien enjoyed great popularity in Moscow, for here middle-aged businessmen could enjoy excellent meals, plus the euphoria of feeling rich as they risked the loss of huge stakes at cards and roulette.
"But all to what end?" asks Simis rhetorically:
"Dealers in precious stones in Moscow, Tashkent, Riga and other cities continue to operate diligently to this day, filling the caches of underground millionaires with their wares. These caches amount to vast treasures, probably worth more than all the pirate booty in Caribbean waters. And yet - what about their owners? What are they waiting for? A fabulous future time when they will be able to unearth their riches and regally use them? Or the downfall of the Soviet regime?"
So what does it all mean? Simis himself doesn't seem to know, for he ends his article and, presumably, also the book he has been writing, with unanswered questions.
If we are to have any hope of getting at the real and final meaning of the Simis story, experience should have taught us that we are here exerting our investigative skills in an area of maximum falsification and concealment in which devices of deception are used which are the product of centuries, even millenia, of practice and accumulated experience.
Winston Churchill was certainly not exaggerating when he described the Soviet Union as "a riddle, wrapped in a mystery inside an enigma".

AN INSPIRED GUESS
In these circumstances, the truth, if it is to be found is more likely to be the product of what, for want of any better description, we call insight, or, as some would say, "an inspired guess' than the product of a detailed and laborious study and juxtaposition of all the available facts - which, in any case, are always in short supply. Therefore we should know in advance that the truth we are seeking is not something that can ever be "proved" with evidence and argument; it is "truth" of a kind which only unfolding history can prove or refute.
For example, no one was ever able to "prove" Oswald Spengler's axiom that "there is no proletarian movement, not even a Communist one, which does not operate in the interest of money..." - and yet it is one that continues to offer the clearest, most coherent and most consistent explanation of much that has happened in the world since those words were written more than 60 years ago. Likewise, Douglas Reed's dictum that "similar men, with a common aim, secretly rule in both camps" - the capitalist West and the Soviet Union.
Insights of this kind are not pure guesswork, but can be described metaphorically as the product of some higher computing process of the mind in which the enquirer, having absorbed as many as possible of the available hard facts, is able to "tune in" emotionally to the motivational systems involved - rather like having electronic bugging devices planted inside the minds of those men whose policies and actions are being studied. The infinitely wise Chinese call this jen ai, putting yourself in the place of the other person, the secret of all skill in human relations, whether these be friendly or hostile.
Now then, let us place ourselves in the position of Konstantin Simis and of his former Kremlin bosses and see what turns up.
We are told in a biographical piece in Fortune that from 1953 Simis acted as defence lawyer for dozens of prominent underground businessmen, giving up his practice in 1971 to join the Ministry of Justice as an international law expert. In 1976 the KGB raided his apartment and seized the manuscript of a book on Soviet corruption, the first draft of which was already in the hands of an American publisher. Then Simis and his wife Dina, who was also a lawyer, were told that unless they left the Soviet Union they would be sent to a hard labour camp. Simis could hardly be expected to regard this as severe punishment for so grave an offence, for he was able to join his son who was already established at Johns Hopkins University as director of a Soviet studies programme, thus acquiring a vastly improved launching pad for his literary assault on the Soviet regime.
All this does not make good sense in terms of the ostensible motives and expected natural reactions of those involved - whereas, the expulsion of Solzhenitsyn is precisely what could have been expected by those able to share with the Soviet bosses the awful dilemma of what to do with a man who had become the glowing symbol of an awakened and aroused young Russian intelligentsia.

A BIG CHANGE COMING?
In our interpretation, what we are seeing today are the first signs of dramatic change in the picture of the Soviet Union as presented by the Western media and contemporary historians. In other words, the whole story of what has happened since the Bolshevik Revolution is going to have to be retold in a revised form.
Chapman Pincher in his book Their Trade is Treachery tells us that KGB agents like Kim Philby, Guy Burgess and others had been taught that when being investigated they must keep their interrogators talking for the purpose of finding out how much these interrogators already know for certain, so that their story can be tailored to fit in with facts that cannot be disputed. Moreover, finding out what is already known, the person being investigated is warned in time to change his original story as he goes along.
The story which the people of the West have been getting since before the Bolshevik Revolution is now going to be adjusted to accommodate and absorb information which has been seeping through and which could quite soon be common property. For the future edification of a deliberately stupefied public opinion in the West, there are to be, as it were, "guided tours" through what were hitherto "no-go" areas in the realm of news reporting, public debate and contemporary history writing. A start must be made in preparing the public for changes inside the Soviet Union and in East-West relations, which are pending, or, at any rate, intended.
These changes could be of a magnitude, and every bit as traumatic as, the changes inside the Moscow-Berlin pact of 1939 or the process of de-Stalinisation after World War II.

A CONVERGENCE
Implied in the policies and actions of the leading Western powers, the U.S.A. in particular, is the assumption that all are working towards the "ideal" of some sort of convergence of the two worlds, an "ideal" that does not, however, exclude the possibility of a third world war. Meanwhile, it is becoming increasingly obvious that economic socialism of the kind implemented in the Soviet Union by Lenin and his successors cannot ever be made to work. It is, therefore, highly significant that in the Soviet Union, as Simis shows, there has come into existence a vast network of super-rich capitalists, matching in so many ways the super-rich capitalists of the West, ready to take over when the present system of totalitarian state capitalism finally collapses, as collapse it must, sooner or later. How else? And who better entitled to take over than "heroes" of the underground, anti-Communist, counter-revolutionary struggle, freedom, every one of them "freedom fighters" in the new dispensation?" (Emphasis added…ed)

* "Vodka-Cola", Charles Levinson's massive "exposé" of the involvement of Western banks and multi-national companies in the expanding Soviet economy, and the publicity given to this book in a BDC television documentary earlier this year, must be seen as part of the same historical phenomena as the Simis report. What is not generally known is that Levinson is a key figure in the international trade union movement, with headquarters in Paris. In this way the one-worlders aim to retain control of the minds of the trade union masses by themselves undertaking to reveal much of the truth that can no longer be concealed. This is done with an exhaustively documented, highly plausible story carefully tailored to prevent the workers from finding out that they are themselves just as much under the control of the super-capitalists as the banks and companies operating in the U.S.S.R.

Editor's note: Is this for why those many millions of lives were destroyed under the Soviet Regime of terror, torture, famine and mass deportations?"
Along with Wilfred Owen, the young poet who died after suffering the witless mud and blood of the trenches at Flanders we can only ask:
Was it for this the clay grew tall? - O what made fatuous sunbeams toil, To break earth's sleep at all?

LETTERS TO THE EDITOR