Berezovsky vs Abramovich could be good news for the Exchequer

In Prohibition America, disputes between the likes of Al Capone, John Dillinger or Baby Face Nelson were settled with Tommie guns. In Putin’s Russia, squabbles involving Boris Berezovsky, Roman Abramovich or Oleg Deripaska are these days resolved by London’s High Court.

On balance, the old way is preferable for being stylistically pure. Since Al and Baby Face made their money outside the law, it would have been incongruous  for them to appeal to it when things went sour. So instead they’d slam those drum mags into their Tommies and settle it like men. The Russians, on the other hand, have decided to go legit for once in their lives.

You might say that there’s an important difference: American gangsters were universally acknowledged as such. By contrast the Russians pose as legitimate businessmen, and any speculation on their probity runs the risk of a libel suit. In Russia, of course, everybody knows what those ‘oligarchs’ really are, but in a civilised country one is innocent until proven guilty in court.

Hence the tremendous importance of the B v A trial: it proved beyond any doubt, reasonable or otherwise, that Russian oligarchs are typologically closer to Al Capone than to Bill Gates. This is one finding that has escaped the attention of our press, yet it’s the only one that makes the trial interesting.

The press got most of the facts right, even though it didn’t understand them properly. In broad strokes, Berezovsky was a major beneficiary of the Yeltsyn regime. Capitalising on his closeness to the president’s daughter, he gained access to the perpetually drunk leader and became a billionaire by buying up state assets for a derisory fraction of their value.

Abramovich was Berezovsky’s junior partner when the latter branched out into the oil business. Together they took over oil companies, refineries, gas processing plants and pipelines. In parallel, they acquired the controlling interest in the Russian government by masterminding Yeltsyn’s return for a second term. With the president dissolving the last of his marbles in booze, it was Berezovsky and Abramovich who interviewed and de facto appointed candidates for government posts. They were also the ones who chose Putin as successor to Yeltsyn, hoping the lowly KGB lieutenant-colonel would be putty in their hands.

That hope turned out to be ill-founded, and Putin outflanked the ‘oligarchs’. Abramovich, the former street guttersnipe, cottoned on quickly and kissed the new godfather’s hand, figuratively speaking. Berezovsky, the former maths professor, was slow on the uptake, overplayed his political hand and was thrown out of Russia, having been blackmailed into selling his assets for a pittance, just a few billion here or there.

The pressure on him was exerted through his former partner Abramovich, now playing ball with Putin and therefore allowed to benefit from the fire sale, provided he remembered which side his bread was buttered. Both A and B ended up in London, the former with Putin’s blessing, the latter with his anathema.

Berezovsky wouldn’t take it lying down. He’d use his remaining billions to finance anti-Putin opposition in Russia, and also try to sue Abramovich for cheating him out of more billions. The first part of the counteroffensive proved forlorn, the second difficult.

Abramovich, securely shielded from the outside world by a platoon of cutthroat bodyguards, was out of reach for any summonses or writs. But fate was on Berezovsky’s side. On a fine 2007 day, he espied Abramovich in an Hermès boutique, pounced on him and after an unseemly scuffle managed to thrust the writ into his hand. The biggest civil case in Britain’s history was under way.

It concluded last Friday, with Judge Elizabeth Gloster calling Berezovsky ‘an unimpressive, and inherently unreliable, witness, who regarded truth as a transitory, flexible concept, which could be moulded to suit his current purposes.’ In contrast, Her Honour found Abramovich to be ‘a truthful, and on the whole reliable, witness.’ Well, Dame Elizabeth was right in that commitment to truth has never been Berezovsky’s most salient trait. How she found Abramovich to be any different is a mystery, but then the law is full of them.

Yet, if you believe our newspaper accounts, Her Honour could hardly have ruled in any other way. It was the plaintiff’s word against the defendant’s, and the burden of proof was on the former. No written contract existed, and, as Samuel Goldwyn once explained, an oral contract isn’t worth the paper it’s written on. But the press got it wrong: Berezovsky’s case wasn’t entirely based on his word.

The plaintiff produced one undisputed fact: Abramovich had indeed paid Berezovsky more than a billion dollars. The latter claimed that this represented his share of the profits in the oil companies he owned jointly with Abramovich. The defendant, on the other hand, had to claim that no such partnership existed and that…

Here’s the rub: what on earth could he claim? A billion-odd is a rather large sum. Surely it wasn’t a birthday gift? Hence the strategy of Berzovsky’s case, and the man could make a hell of a poker player even though he lost this hand.

Abramovich could only win the case and save himself $5 billion by claiming that the money represented something entirely different. But if it wasn’t a partner’s share of the profits, it had to be a payment for services rendered. And the only service Berezovsky could have rendered to Abramovich was to provide what in the Russian underworld is called krysha. Literally meaning ‘roof’, the word is used to denote that cornerstone of organised crime: protection.

For Abramovich to declare that he had paid all those zeroes for protection was tantamount to admitting that he had made his money Al Capone’s way, not Bill Gates’s. The Gateses and Bransons don’t need protection: they become rich by delivering products we want to buy. The only ‘businessmen’ who need protection are gangsters. So Abramovich’s choice was stark: he either had to insist he and Berezovsky are both legitimate businessmen and pay up – or admit they are both Mafiosi.

Berezovsky was hoping his adversary would balk at declaring himself a Russian answer to Scarface Capone. This was the plaintiff’s bluff, but it was called. Rather than parting with $5 billion, Abramovich for all intents and purposes admitted he had made his money under the protection of the mafiya.

The moment the word krysha crossed Her Honour’s lips, Berezovsky’s case was lost, even though it’s likely that this once he was indeed telling the truth. But in the absence of documented proof that that billion-odd he had received from Abramovich was anything other than krysha, only one ruling was possible. Dame Elizabeth did what any other judge would have done: she found for the defendant.

Case closed? Not quite. For Abramovich’s admission effectively means that his and Berezovsky’s (and by inference other Russian oligarchs’) fortunes aren’t rewards for successful entrepreneurship, but ill-gotten gains being laundered through Western banks. The Exchequer would be justified in impounding such assets and holding them until their exact provenance is ascertained.

Since Abramovich had to own up that his money had been made in ways that are illegal in Britain, the oligarchs’ assets could eventually be confiscated and applied against our national debt. Meanwhile, Abramovich and Berezovsky deserve our gratitude: they’ve added another word, krysha, to the English legal lexicon.







P.S. The shaving of politico Ryan

And speaking of Romney’s team, his VP choice has added a whole new meaning to the term ‘running mate’. Paul Ryan has just admitted he shaved more than an hour off his best marathon result when claiming he had clocked in at ‘two-hours, fifty something’. Ryan’s actual time in the only marathon he ever ran, back in 1990, was 4:01 – far short of the professional-level performance he boasted.

In admitting his dishonesty, Ryan said he had ‘exaggerated’. This word comes from the Latin exaggerāre, which means ‘to magnify’. Considering he claimed a shorter and not longer than actual time, this Latinism isn’t quite precise. May I suggest a shorter Anglo-Saxon verb? You know, the one that starts with an ‘l’.

Admittedly, Ryan isn’t the first politician to use his phoney athleticism as a key to people’s hearts. The stratagem has served the likes of Mao and Putin well, so Romney’s boy finds himself in good, if not unimeachably democratic, company. 



Voting for Obama is difficult, voting against Romney isn’t

Whether it’s up in Westminster or down the pub, the British are looking for the side to pick in the upcoming US presidential election. In doing so, they project their own politics onto the American scene.

Generally, those of conservative leanings tend to prefer Romney, although one doesn’t detect much enthusiasm either way. Coming across as more stolid than solid, the Republican candidate doesn’t inspire misty-eyed affection: if you loved George Bush Sr., you’ll like Romney. Still, for a conservative to support Obama would be tantamount to high treason, or at least that’s the consensus.

Yet knee-jerk support for the seemingly more conservative candidate is ill-justified this time. If I were still qualified to vote in US elections, I’d vote for Obama, much as I despise him, his policies, everything he stands for and the horse he rode in on (its name is Demagoguery).

As his piece in the Telegraph demonstrates, Daniel Hannan doesn’t see it that way, not this time around. Four years ago, he supported Obama, mainly because he ‘enjoyed his speeches’. Let me get this right. The world economy was collapsing on our heads, the Middle East was ready to explode into a global conflict, British soldiers were dying God knows for what, and yet supporting a transparent nonentity with the gift of the gab seemed like the proper thing to do.

America and the rest of us needed a man with a golden touch, not a silver tongue, and yet Hannan, supposedly a conservative, favoured the man slated to become the most socialist US president ever. And anyway, how anyone can enjoy Obama’s demagoguery escapes me. His speeches always have been and always will be long on rhetoric and short on content, but then he’s a politician, as, come to that, is Mr Hannan. There must be some professional kinship there that transcends reason.

So what has changed this time? Barack still has a nice turn of phrase on him; he’ll talk your ear off with all the right resonances and diligently rehearsed gesticulation. Why not support him again for this reason alone?

Hannan goes into a long litany of Obama’s economic failures, which isn’t really worth doing. Pointing out Barack’s inadequacy in that area is like lobbing a wheelchair-tennis player: too easy and hardly sporting. We all know Obama is incompetent. But what makes us think Romney will be less so?

By way of reply, Hannan reverses the ancient wisdom by suggesting that the devil you don’t know is better: ‘Whether Mitt Romney can eliminate the deficit is not clear. What is beyond doubt, though, is that Mr Obama cannot.’ America national debt as percentage of GDP is 25 percent greater than ours, her budget deficit stood at 8.7 percent last year, and yet there’s an off chance that Romney will avert a global collapse. And even if he doesn’t, he’s unlikely to do worse than Obama. What better reason to support him?

And then comes the crux of the argument: ‘From a British point of view, the choice should be straightforward,’ writes Hannan. Obama doesn’t like us, whereas ‘Mr Romney, by contrast, is an old-fashioned Republican when it comes to foreign policy: he knows who America’s friends are.’

I’d say he knows it at least as well as George W. Bush did, he of ‘Yo, Blair!’ fame. These days, American presidents take it for granted that Britain will go along with any hair-brained adventure, any pointless and potentially catastrophic military undertaking. They count on us not the way a man depends on a friend, but the way he relies on his Alsatian to bark at a stranger or, if need be, bite him.

Over the last couple of decades, US foreign policy (and Britain, after all, is foreign to the USA) has been variously influenced, shaped or – under Republican administrations – dominated by neoconservative philosophies and personages. 

Neoconservatism, it must be said, has nothing to do with conservatism – non-conservatism would be a more appropriate name for it. Unlike real conservatism it’s an eerie mishmash of Trotskyist temperament, infantile bellicosity, jingoism, expansionism masked by pseudo-messianic effluvia on exporting democracy to every tribal society on earth, Keynesian economics, Fabian socialism, welfarism and statism run riot. These are mixed together with a spoonful of vaguely conservative phrases purloined from the rightful owners to trick the neocons’ way to electoral support.

In an odd sort of way, neoconservatism plays into the hand of innate American activism: it’s not in the national psyche to believe that sometimes doing nothing is the best thing to do. ‘We must do something!’ was the Middle American battle cry after 9/11, which I prefer to call 11/9. George W. Bush, who at the time was still putting his family photographs on the Oval Office desk, is Middle America personified, so the cry resonated through his heart, skull and bone marrow. He! Had! To Do! Something!

The question was, what? And Bush relied on his foreign-policy advisers to answer it. Now those chaps were to a man either card-carrying, fully paid-up neocons themselves or at least hugely receptive to neocon ideas. That is to say they were ready to strike a blow for American supremacism, with democracy as the slogan inscribed on the banners of aggressive war. Islamist terrorism was for them not the tragedy it was for other Americans. It was a convenient pretext.

Over the next decade, America, with our help, succeeded in replacing every marginally friendly Middle Eastern regime with a madcap Islamist one, unsettling and radicalising the region, bringing it closer to an uncontrolled implosion and thereby creating a risk of global conflict. Thousands of Americans and their ‘friends’, Brits mostly, had to die to promote this neocon agenda, and, as Americans say, we ain’t seen nothing yet.

Now, if Bush’s foreign-policy entourage was mostly neocon, Romney’s is exclusively so. It doesn’t take a crystal ball to predict in which direction they are going to steer what passes for US foreign policy should Romney get elected. Nor does one have to be a seer to know that, when Americans say ‘Jump’, the only possible British response will be ‘How high?’

It’s entirely possible, nay likely, that a Romney administration would drag us into a war that may or may not have an invigorating effect on the US economy, but would definitely be ruinous for us.

So yes, Romney ‘knows who America’s friends are’. But does Hannan know who Britain’s friends are? On the evidence of his facile comments on the US election, one rather doubts it.