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One morning I saw a young couple, noses pressed to the glass, standing transfixed by the cardboard city. Like so many of the pilgrims who came to see this model of Moscow, they were eager and hopeful witnesses to the birth of the new Siti. They tried to locate their apartment in the model city, but it spun too fast. They spent another moment, then moved on.
“Think it’ll ever be built?” the elfin girl, her long hair braided low below her waist, asked her companion.
“No,” he replied. “Of course not.”
THREE (#ulink_5a042873-a502-59bd-bdfd-5933c7abaef0)
IN MOSCOW I WAS AFRAID every day. Not that I would be attacked. I had been, but not harmed. No, my fear was derived from bad news, the flow of death, violent and early death, that courses through each day in Moscow. As luck would have it, we lived a floor beneath a celebrity, a would-be banker who helped run a notorious pyramid scheme that bankrupted thousands when it crashed in the first post-Soviet years. He was well protected. In the morning, he posted flint-chinned bodyguards with short-stock Kalashnikovs buttoned inside their suit coats at his door and on every landing of our stairwell. At night, he didn’t let us sleep. Big footsteps pounded overhead at all hours. One of his guards, it seemed, stood post all night. In the morning I would be sure to cough, sniffle, or shuffle loudly to let the guards know I was coming their way. I bade them good morning as they rebuttoned their jackets.
Paul Tatum, a onetime Republican fund raiser from Oklahoma and a well-known man about Moscow, was the most famous foreigner killed. Pravda, in 1990, had announced his arrival with creamy praise. Tatum, Pravda said, “has a dream, an American dream … He dreams of the day when a tiny American oasis will grow in the center of the Soviet capital.” The “oasis” was the Radisson Slavyanskaya, Russia’s first deluxe Western-style hotel and business complex. Coowned with the Moscow city government, it grew into a bustling hotel that hosted visiting American presidents. “My baby” Tatum liked to call it. But as later was the case in so many of the so-called joint ventures, before long the natives made moves to muscle him out – at times literally. A long, nasty fight ensued.
Tatum was killed on Halloween night in 1996, the week I started at Time. I was working in the bureau on a Sunday evening when a few blocks away Tatum, as he entered an underground walkway, fell to the ground in a hail of bullets. Eleven of the twenty shots hit him. I had often seen him around town. The last time had been on the summer night earlier that year when Yeltsin won his improbable reelection. Tatum made the rounds at election headquarters. “I’m gonna win this war,” he vowed to all who would listen. As the TV correspondents reported Yeltsin’s “miraculous comeback” and “the end, perhaps forever, of the Communist threat to Russia’s young Democracy,” Tatum was his usual cocksure self “United we stand,” he declared, “and divided we fall.”
Tatum was by no means alone. Each day I scanned the local wires: an English engineer found burned to death in his own apartment; an American television producer, a Californian in his thirties who came to Moscow to do good, stabbed to death; a young Canadian diplomat discovered dead in his living room (victim of a slipped mickey, the reports said); a German chef beaten to death on a central street, his face “torn.” There were many more, but those who succumbed to Moscow’s violence were rarely foreigners. We were invisible. Compared to the newly moneyed local elite, we were poor.
“Not likely these days,” said my friend Lyona, the son of a Soviet general lavishly decorated for his service to military intelligence, when I told him how Mia and I had been robbed in Moscow once before, in 1991. That had been back in the old Soviet days, when foreigners were few in number and far richer than their neighbors. In one hour, as we shopped at a local market, our place had been stripped. The thieves took everything – and tidily hauled it off in our suitcases. They even took the telephone. “No one will touch you now,” Lyona said. It was nothing against foreigners, he said. It was just that Russian thieves now wanted real money.
Now they went after the New Russians. The so-called Noviye Russkie–a deliberate play in Russian on “nouveau riche” – were those who had managed to grab a slice of the spoils and grown preposterously rich overnight. Most Russians, being Old Russians, naturally hated the New Russians. In the jokes that Russians addictively tell each other, they had replaced the Chukchi, a desperately poor native people of the Russian north who had long suffered as the favored butt of Soviet jokes. Lyona was right. The New Russians had become the new target.
I HEARD COUNTLESS TALES of horror from friends and neighbors. But none was more frightening than the one I heard T
tell. I believed it right away because I believed everything he told me. He was the only Russian I ever met who had survived, flourished even, in the upper reaches of the Soviet Communist Party and the Russian Orthodox Church. His business, at least on the wintry day we met in the center of Moscow just off Pushkin Square, was oil. The church’s oil. Early in the Yeltsin era, the Orthodox Church won the right to export, tax-free, millions of barrels of Russian crude each year. T
now worked for the trading company the men of the cloth had set up. The work, he said, was pretty much the same as what he did in the old days. “Only now instead of the general secretary, I serve His Holiness.”
T
was fond of sushi, sweet Georgian wine, and sayings like “Creeds come and go, but I’m still here.” Over lunch he digressed from a discussion of the church’s role in building the market economy to a description of the forgotten world of Mikhail Andreyevich Suslov, Brezhnev’s long-serving ideologist and gray cardinal. Though dead for decades, Suslov remained one of the few old Party bosses who still conjured fury among Russians. My neighbor Valery, a kindly retiree from the Soviet Foreign Trade Ministry, hated him as the symbol of Politburo excess. Valery’s aunt, a nurse who spent her life ministering to the Party elite in the Kremlin hospital, had regaled him with tales of Suslov’s enemas. Each morning he came to the Kremlin hospital for his daily fruit juice. Not to be outdone, his wife demanded fresh trout each week, flown in from Lake Sevan in Armenia. But none of this troubled T
. His tale concerned Suslov’s grandnephew, a forty-year-old banker named Vladimir Sterlikov. Sterlikov, it was said, once lived in the dacha of Galina Brezhneva, Brezhnev’s daughter, who had a weakness for diamonds, drink, and circus performers. For a time Sterlikov had worked for Pravda. Now he was the deputy head of the Russian Bank for Reconstruction and Development–“until recently,” T
added with relish.
“It was early one morning out on Rublyovka …,” T
said, setting the scene. He was careful to call the Rublyovskoye Schosse by its nickname, the Rublyovka. He was letting me know that he too graced Moscow’s most prestigious artery. Clogged morning and night with convoys of Bavarian sedans, the Rublyovka was the gateway to the off-hours realm of the elite. It was the road that bore the city’s richest and mightiest into town from their fortified cottedgi, cozy five-story affairs nestled in the birches just beyond the city limit. Because it led directly to the residences of the mayor of Moscow, the prime minister, the cabinet, and, of course, the president himself, the Rublyovka was also the most heavily guarded road in Russia.
“It was early in the morning,” T
repeated, pausing between sips of green tea, “when Suslov’s poor grandnephew met his bitter end.”
A waitress in traditional Russian peasant dress, a nod to the prerevolutionary undertones of the menu before us, interrupted T
to unveil his swordfish, a taste for which he had acquired, along with the affection for green tea, during an extended Asian stint, back in his days as a “journalist” reporting to the Central Committee’s foreign relations office. T
, many whispered, was KGB in those Asian days. Some insisted that he still was. But T
just laughed at all the talk and maintained that he was merely a journalist, a student of the Japanese language and culture, and, above all, a loyal, if less than devout, follower of the Party line.
As soon as the waitress took her leave, he continued.
“Sterlikov’s driving his Saab, or rather his driver-bodyguard is, in from the dacha when all of a sudden a cop speeds past, cuts in front of them, and forces them to pull over. The cops ask the driver for his license. Then they say they want to check the engine number. So the driver opens the hood. Just as he leans over the engine – pop. They shoot him in the back of the head. Poor Sterlikov starts to get out of the car to see what’s going on, and one of the cops shoots him. Six bullets in the chest. Died later in the hospital.”
T
took a sip from his bone china teacup and watched my eyes contract. But I had heard such tales before. The Moscow tabloids were full of them. “Never open a door for anyone in uniform” was one of the first rules a landlord taught a foreign tenant. The hit men, we were told, had access to the proper uniforms and even genuine IDs. Cop cars? No problem. T
was undeterred. It was not the end of the tale, he said. “The cops were hit men,” he said. “But they were also cops.”
Another sip, right pinkie raised, to let it sink in.
“How do I know all this? Sterlikov worked for one of our banks. A recent hire and not the best. But he brought a certain pedigree, and we owed a favor to a friend. The poor guy was killed by real policemen. We don’t know their names, but we know what happened.” The bank, he explained, had conducted its own investigation. The cops had been hired to kill. They were moonlighting.
T
returned to his fish. As for Sterlikov, he checked out clean. No extravagant debts. Nothing certainly to get killed over. And he hadn’t been at the bank long enough to steal anything. He fell victim to a stupid blood feud. Banker for banker, that kind of thing.
“But the cops,” T
said, wiping the edges of his red lips with an ironed napkin, “now isn’t that something?” He marveled at the accelerated evolution of the criminalization of the organs of law enforcement. He refolded the napkin and revealed a grin. Once we had left the restaurant, I watched T
trundle off down the snowy boulevard and disappear into the noonday thicket of cars and passersby on Pushkin Square. He almost seemed pleased.
FOUR (#ulink_0d674530-463d-5c9e-8f75-168911b6e65e)
BEYOND LUST AND FEAR, Moscow breeds power. You cannot help feeling that you are trespassing in its path. Every effort is made to impress upon the populace its privileged proximity to the unlimited power of the state. This is not just state power as in other countries. This is not merely the pomp of officialdom, but the deliberate demonstration of the state’s power over the people, an ever-present slap in their face.
It is midmorning. You walk through the cold, dank underpass, lit by long fluorescent lamps. At one end stand two grandmothers, selling cigarettes, hand-knit caps, dried flowers. The underground walkway fills with the sounds of an accordion. A mournful Russian ballad. Every day the accordion player, a Moldovan refugee, is here busking. Every day he squeezes out the same song. It is a long underpass. When at last you emerge and climb the stairs up into the cold wind of the far side of the street, you suddenly hear it: the silence. Nothing announces the power like the silence.
Kutuzovsky Prospekt may well be the broadest street in Moscow. At its widest it has seven lanes in each direction. In its center the road is divided by a lane reserved for the political and financial elite, or at least any Russian sufficiently well moneyed or well connected to procure the coveted migalka, a little flashing blue light that, once affixed to a car roof, announces the right of the faceless passenger hidden behind the curtained, smoked windows to break any traffic rule or regulation. In the morning, as the city’s bankers and bureaucrats rush toward their offices, the road is filled with cars and heavy trucks trying to tack their way into the center. The roar of the traffic, with all fifteen lanes fully loaded, is deafening. Walking the sidewalks of Kutuzovsky, as I did nearly every morning, can be unpleasant.
Until the silence comes. It happens at least twice a day, usually in midmorning and just before the sun sets. You are walking down the sidewalk, and then, in a single moment, you realize something has changed, something is amiss. All you hear is the crunch of your boots on the hard snow. On the street, the slow-moving river of cars has not simply stopped; it has disappeared. (In minutes a road as wide as a highway is completely cleared.) The trolley buses have pulled over and stand along the edge of the prospekt. The citizens too, waiting at the bus stops, stand still. Everyone waits. Hundreds of poor souls, trapped in the stilled traffic, sit mute in their parked cars. The street has frozen into a photograph, and you are the only one moving through it.
For several minutes nothing stirs. Then suddenly a black Volga, an illuminated migalka fixed to its roof, speeds down the middle of the prospekt. Then another, and a third, a fourth. And then the chorus of sirens accompanying the flashing lights. A convoy of automobiles, a dozen in all, each duly impressing the motionless citizenry with its size, speed, and cleanliness. As men, women, and schoolchildren (and the secret policemen in plain clothes sprinkled among them) stand and watch, a squadron of BMW militsiya sedans sweeps past, followed by an extended black Mercedes limousine and a quartet of oversize Mercedes jeeps. As the convoy passes, the cars leave a ripple of turned faces on the sidewalks.
A visitor might imagine the world had stopped because of a dire emergency. But the Muscovites frozen in place along this vast slate gray avenue recognize the scene for what it is: their president, the leader of all Russia, making his way to work. More than twenty miles of roadway in the Russian capital are closed in this fashion every day. In a city already paralyzed by too much snow and too many cars. And still no one complains, ever. It is the essence of power, Moscow style. It is naglost. In general, naglost is an unseemly blend of arrogance, shamelessness, and rudeness. In this instance it is the contemptuous disdain of the rights of ordinary Russians.
FIVE (#ulink_cadd7793-44ae-5a48-9e91-7676d48d1bf8)
IN THE COVETED neighborhood of Nikitskiye Vorota, nestled among small parks and large embassies and tucked behind the poplar-lined boulevard that circumscribes the city center stands a surprisingly modest apartment building where the new guard meets the old guard. No. 15 Leontievsky Pereulok, a squat seven-story building of beige brick and broad balconies, has an exterior that bears few distinguishing marks except for a row of Soviet-era plaques that honor a half dozen of its previous residents. Built in 1962 for Politburo members evicted from the Kremlin living quarters when Khrushchev tore them down to build his massive Palace of Congresses, the building housed Party overlords, titans of Soviet industry and arms, and even Dolores Ibárruri, the famed doyenne of the Spanish Communists. More recently, the chief of the International Monetary Fund mission in Moscow, a jovial bald economist with a hefty pinkie ring, lived here in the old flat of Andrei Gromyko, the long-serving Soviet foreign minister.
“That’s the apartment of Mikoyan, designer of the MiG,” Nikita Khrushchev told me one evening as we toured the building where he had lived since childhood. “And in that apartment,” he exclaimed, “lives Lenin’s niece!”
Just below the IMF chief, in a sprawling apartment filled, I imagined, with an overstuffed Warsaw Bloc living room set, lived Grigori Vasilievich Romanov, among the oldest of the old guard. One sub-zero afternoon in midwinter, as the air chilled to a glass-sharp edge, I set out to meet Romanov. He commanded me to stand, alone, on Ulitsa Tverskaya beneath the iron statue of Yuri the Long-Armed, founder of Moscow. Across the street looms Luzhkov’s office, the lavishly remodeled Moscow Communist Party headquarters. A red electric sign at the Central Post Office flashed seventeen degrees below zero. I spent twenty minutes examining every passing face, but I had patience. I had been waiting to see Romanov for two years.
I spied him shuffling slowly, painfully, down the crowded sidewalk long before he spotted me. As he approached, a silver Mercedes, a For Sale sign taped to its rear window, nearly ran him down. He was short, no more than five feet five inches, and I remember hearing how Romanov, back when he was in the Politburo, had placed his desk atop a raised platform to make himself appear more imposing. He wore a gray topcoat, with a thin sweater beneath. A faint stubble shaded his sagging square cheeks; tuffs of gray jutted from beneath his brown fur hat. At seventy-five, and despite a recent heart attack, he was in far better shape than his phone voice had led me to believe. His pale blue eyes, however, were tearing from the cold wind.
“It’s not that I don’t trust journalists,” he declared straight off, dabbing his eyes with an ironed blue handkerchief “I don’t trust anyone. But someone has to say what has happened here. Someone has to speak of Russia’s misery.”
Romanov came to the West’s attention in the 1980s, when he and Mikhail Gorbachev served as lieutenants to Andropov and his ailing successor, Konstantin Chernenko. Romanov was the darling of the Politburo’s hawks, the truest of the cold warriors, but upon Chernenko’s death, he was ousted by Gorbachev. He had not spoken to a foreigner in years. “The only people he hates more than foreigners,” joked Nikita, “are reporters.” But I had long badgered him, calling him first thing in the morning once or twice a week. At last he relented. He agreed to meet-only in public, “in an hour.”
His rant that winter day was almost pauseless. “Gorbachev will pay for his sins! I can’t stand the sight of his pig’s mug! He’s a traitor! A traitor to the Motherland! He’s sniveling about how no one here thanks him, about how ungrateful Russians are to him. To hell with Gorbachev. He started this disaster. He was a catastrophe, a peasant who had no right coming to the big city … Yeltsin? Who is Yeltsin? A swine who drinks. He got drunk on power. I can’t even speak of him. He’s a criminal. A common thief who’s robbed his Motherland and killed his people. All these Gaidars, Berezovskys, these so-called oligarchs, they’re all Yeltsin’s little children. Now they want to ban the Communist Party. Do you think all people are born the same? Of course not. Some are born to make things – to create, build, and work. Others are born to take, to steal. Gorbachev is one of the takers. He started the fashion. Now look where it’s led us.”
To some, Grigori Romanov was an oddity, a hapless relic shuffling toward his life’s end. He was, to be sure, a diehard Communist who had chewed sour grapes ever since he fell hard from the Soviet Olympus. But oddly enough, in advanced retirement, far from his rarefied life among the Party elite, Romanov echoed the lament of many a common man in Russia. In the years after the Soviet collapse, he had found company. Romanov had no power now, but he took solace in the knowledge that millions of Russians shared his views. His principal conviction – Ran’she bylo lushche (“Things were better before”)–had become the motto of his generation. And the dirty secret, only conceded in the capital sotte voce by the ascendant Young Reformers, was that they were right. For many of his generation, things were indeed better before – for them.
Romanov lived on some sixty dollars a month. As a veteran of the blockade of Leningrad, he said he deserved much more. “I’m entitled to several war pensions. I’m a veteran and an invalid. And I received the Hero of Soviet Labor. Politburo privileges? What a joke! We have nothing. No dacha, no car, no privileges at all. Only the apartment.”
Once it was a very different story. After rising through the Party ranks, he ran Leningrad, Russia’s second city, for twenty-five years, until he was summoned to Moscow by Andropov in 1983. He survived various Politburo wars, until he was finally outflanked by the ascendant Gorbachev.
“In February 1985, Chernenko called me out to the dacha,” Romanov told me. “He was weak. He sat up in bed. I stood beside him. ‘Just wait,’ he said. ‘Relax. It’ll come to pass.’ He relied on the defense sector. He knew the importance of our work. He never wanted Gorbachev … We all knew Chernenko couldn’t last long. He was in very bad shape. So were most of the others, for that matter. They were all old and sick. Gromyko and the rest. There were two candidates discussed at that time: Vladimir Shcherbitsky and Romanov … No one talked about Gorbachev with any seriousness.”
A few weeks later Chernenko died, and within hours Gorbachev wrested control of the Politburo in a late-night five to four vote. It was a bit of spectacular luck, or so his biographers have held, that the three committee members who were Gorbachev’s chief opponents were absent from Moscow.
“The week before Chernenko died, my wife and I flew to Vilnius,” Romanov said. “They had given us a trip to Lithuania, to a sanitarium. The day Chernenko died, we were there. They said the plane would only fly the next day. They met that day, hours after he died. But the three most senior members of the Politburo weren’t present! Kunaev was in Almaty. Shcherbitsky was in the States. And I was in Lithuania. By the time we got back to Moscow he’d already done it. That fast. That was it. It was agreed to in public of course at the Politburo meeting and at the plenum. But he’d already cut the deal in secret with all of them. And you think the timing, Chernenko’s death, I mean, was all accidental?”
In the aftermath Romanov was stripped of power. He had long been renowned as an epicurean lush, ridiculed as the “Last of the Romanovs.” Gorbachev’s cronies played upon that reputation, spreading the rumor that to celebrate his daughter’s wedding. Romanov had ordered the caterers to use Catherine the Great’s Sèvres from the Hermitage. Worse still, the story went, a few pieces had been smashed. By July Romanov had been summarily retired and sent, according to another rumor fed to reporters, to dry out.
Did he ever regret, I wondered, not making it to the top?
“No,” he retorted. “I’m just sorry the wrong man did. The traitor. Because if it had been me, the invasion never would have happened.”
SIX (#ulink_dc53f9a8-28a2-5565-bd70-b610f1201696)
Please, put it in a bank … Please, let’s put it in a foreign bank.
–Vladimir Putin advising the relatives of those who died on the nuclear submarine Kursk on what to do with their compensation
EVER SINCE RICARDO, economists have built intricate mathematical models to explain and forecast how markets will move. Calculus, however, assumes reason. When Russia crashed in the summer of 1998, there was little rational about it. “Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency,” John Maynard Keynes wrote in 1921. “Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” Russia under Yeltsin was less a test market for the “Invisible Hand” or shock therapy than a new Babylon where the wheeling and dealing were nasty, brutish, and, for many in August 1998, lethal.
In the dawn of the new market those who would play its princes, if only for a while, needed gastronomic palaces where they could feast in the unreality of their reality. Across Moscow elite men’s clubs sprouted, with reliable security and robust wine cellars. Fashioned from the pages of Tolstoy and Pushkin, the clubs were draped in pre-Bolshevik bliss. Whether or not such bliss had ever existed didn’t matter. Artifice and excess were the object. In their urge to build a new world, the plutocrats imported Swiss chefs, Austrian furniture, English nannies. Having grown fat on the spoils of the Motherland, they could bask in the shimmer of their own money.
Tucked discreetly off Moscow’s Ring Road, two blocks down from the Institute of Biological Structures, which handles the annual repair work on Lenin’s corpse, is Club T. For a time it was considered among the finest restaurants in Russia. It should be, since it was designed as a private reserve for the new plutocracy, its very own “21” Club. Guests are vetted by videophone. The ten or so tables inside reflect absolute elegance, their pink tablecloths radiant under crystal and gold chandeliers. One corner of the dining room is heavy with the smell of Cuban cigars, another with the high notes of French perfume and Armenian cognac. Silk drapes keep the outside outside. Gold seraphim dance on the walls, their pudgy arms hoisting aloft little gilded candles Large mirrors announce your entrance, reassuring you that you belong, that you’ve arrived. The mirrors also assist the discreet diner to find the famous faces hidden across the room.
One evening, as the cold wake of the crash forced its survivors to renew their exit strategies, I invited four of the earliest American pioneers to join me at Club T. Paul Tatum of course was not the last American investor to see his dream sour in Russia. By the time Russia crashed in 1998, countless frontiersmen had been scalped, fled for home, or moved on to the next gold rush. But the quartet of Americans I invited to dinner – Bill Browder, Peter Derby, Charlie Ryan, and Boris Jordan – who, when their portfolios were at their fattest, controlled several billions of dollars of investments in Russia, remained.
Derby, a New Yorker of Russian descent, had arrived first, opening Russia’s first foreign-owned commercial bank in 1991. Jordan, another prodigal son of Long Island’s Russian diaspora, with roots among the Whites who fled the Revolution, had come in 1992 to help run Crédit Suisse/First Boston’s Moscow outpost. By 1995, having reaped billions of dollars in the privatization scheme, he had left to found Russia’s first Western-style investment bank, Renaissance Capital. The 1998 crash forced a divorce that split the bank, and Jordan for a time found himself isolated and on his own.
Browder, the soft-spoken grandson of, ironically, the American Communist leader Earl Browder, had also arrived in 1992, having run an equity fund for Robert Maxwell and later the Eastern European markets for Salomon Brothers. In April 1996 he founded the Hermitage Fund, a high-end hedge fund that at its peak boasted $1.2 billion in assets. By 1997 Hermitage had returns of 228 percent; Browder’s return on his initial capital was 725 percent.
Ryan first came to Russia after working at the EBRD, the European Bank for Reconstruction and Development. Together with one of Russia’s leading reformers, former Finance Minister Boris Fyodorov, Ryan founded the United Financial Group, which, by 1998, managed more than a billion dollars in assets. With his main line roots and mainstream résumé, he was an anomaly, a reflective banker. “Of course the money brings us here,” Ryan told me in 1997. “But it’s much more than that. We’re building something entirely new. Okay, you can get stability and good returns in the U.S. But can you get the buzz?”
Over snails and caviar, king prawns, and medallions of New Zealand lamb, the evening’s theme, at my request, was “What went wrong?” For the next three hours, the foursome pointed fingers at the IMF, former Prime Minister Sergei Kiriyenko, inborn Russian corruption, falling commodity prices, the global recession, prudish U.S. investors, prudent Asian investors, again the IMF. Jordan inevitably dropped the name of every player in Russia, from Kiriyenko to Soros, and declared early on: “This’ll help them” (“this” being the crash, “them” being the Russians). Derby spoke in breathless arias on the chronology of the fall. Ryan waxed philosophical, and Browder concluded, “Sadly, this is a crash with too many morals.” Sadly, too, the meal, by far the most expensive I had ever eaten, got lost in the burlesque of charge and countercharge.
“The basic problem is you can’t control a company in this country,” stated Jordan.
“You can have controlling stakes,” said Browder.
“And get ripped off on every level,” parried Jordan.
Derby announced that his number two, “a great Russian guy,” would go to jail in days. (In fact, he didn’t.) Derby paused, then said: “We will stay and try to be honest and fulfill our responsibilities.”
“This country’s so corrupt they fucked themselves,” added Browder.
“Bill, you obviously don’t believe that,” replied Jordan, “or else you didn’t do your fiduciary duty for your clients, investing a billion in the place.”
At this moment the joust between Browder and Jordan was interrupted by the governor of St. Petersburg, Vladimir Yakovlev, a blithe opportunist, who stopped by for a round of handshakes. When the governor floated away, Derby seized his chance. “The worst thing about it was there was no reason to default,” he said. “Absolutely none. There wasn’t that much debt coming due, like twelve billion dollars over the six weeks. And it was ruble-denominated. There were reasons to take action, but not to default on the domestic debt.”
“Any country will default if they can’t roll over their debt,” noted Browder. “If the U.S. couldn’t sell T-bills for a month straight, they’d have a big fucking problem. But the thing that’s most damaging is the collapse of the banking system …”
“This place never had a banking system,” scoffed Derby.
“It had a system where you made payments,” Browder retorted. “You can’t make payments now.”
“The banking sector did not take savings, invest it, and get growth through investment,” said Derby.
“There was no multiplier effect,” Ryan summed up.
“And the reason you don’t have people breaking the windows here is that they didn’t deposit their money in the banks,” said Jordan.
“This is one the great mysteries of Russia,” Ryan noted. “No one’s had a job in a lot of towns for years. But car ownership in those same towns has gone up by two hundred percent. Consumer durables are way up. And at the same time no one’s rioting. That’s a clear sign that no one’s being very honest about their real net worth or about their real sources of income.”
“Let’s say you’ve got twenty-five percent of your money in the bank and seventy-five percent in your mattress,” said Browder. “Eventually your mattress money is going to disappear.”
Tuxedoed waiters unveiled course after course with remarkable flair, raising broad silver lids from big silver plates, making sweeping bows in unison. As the evening wound down, Browder, more puckish than the rest, observed, “There used to be Third World countries. Then they became Developing Countries. Then Less Developed Countries. Then the wall came down, and we got Emerging Markets. Well, folks, now they’re gone, too.”
With dessert the conversation drifted to talk of the price of bodyguards, the best tax havens for billionaires, and the travails of Bermudan citizenship. Over coffee, Jordan offered a parable: Back when it was flush, the Central Bank decided to buy an American satellite to monitor electronic trading across Russia’s eleven time zones. No sooner had the satellite been launched than it spun out of orbit. Eventually it disappeared altogether.
SEVEN (#ulink_08155742-ac16-5b36-b335-744cf5acc32f)
So many wonderfully fine women can hardly be seen in any country in one assemblage.
–Cassius Marcellus Clay, the Kentucky abolitionist Lincoln sent as America’s emissary to Alexander II
ANOTHER STREAM OF PROSPECTORS had started in the last days of the old USSR. American men, weighted with middle age and regret, began to come to Moscow to troll. Back then they were searching for a woman they had heard of, the charming and servile Russian antifeminist, the alluring woman who could be wife, lover, cook, cleaner, and mother all in one. Moscow, the American lonely hearts believed, would be their mecca. For thousands, it was.
In the hotel bars and nightclubs you ran into all sorts: human rights lawyers and postdoctoral scholars, cardiologists, and even astronauts. Most of the men spoke no Russian, knew nothing of Tolstoy or Pushkin. To them, the girls were “Natashas,” one and all, and Moscow was heaven. That was in the pioneer days. As time moved on, the marriage market slumped. “Russian bride” agencies still claimed a strong niche, but many of the men who came to Moscow now wanted only one thing. Sex ruled the night, and the dollar was the coin of the realm.
During Bill Clinton’s last presidential visit to Moscow, Mia and I went for a beer at a new hotel on Tverskaya, Moscow’s main drag. We found half a dozen Secret Service agents lining the bar. (After Tatum’s murder the White House was relieved that a new American hotel had opened in Moscow.) Nearby sat several other Americans, from their banter, junior-level White House adjutants. The Secret Service on that night was more than happy to share a tip. “Go to Night Flight,” one agent in a pinstriped suit said, “and you’ll never regret it.”
Night Flight was Swedish run and scarcely resembled a bordello, but it was famed for offering Moscow’s most beautiful, and most expensive, prostitutes. (“DO IT TONIGHT,” said its ads at the airport, tempting new arrivals.) The cover was steep, the Secret Service agent said, twenty dollars after 9:00 P.M. “But,” he added, “it’s the best twenty bucks you’ll ever spend.”
If Night Flight was the high end, the Hungry Duck anchored the low end. Run by a Canadian innkeeper who opened his first bar in Moscow in 1993 and housed in the old House of Culture for Soviet Workers in the Arts, a few minutes’ walk off Red Square, the Duck, as the bar was known among ex-pats and natives alike, grew world famous. The Washington Post even dubbed it “the wildest bar in the world.” While it lasted, it was certainly one of the most vulgar, with drunken sex in its dark corners and vomit on its floors.
The first time I braved the Duck, I ended up bartending. I had come to interview the club’s impresario, Stanley Williams, a black deejay from Brooklyn who had recently emerged from a Moscow prison cell. Caught up in a sweep targeted against African students in a Moscow disco, Stanley had been arrested for possessing “less than an ashtray” of marijuana. In the end the charges were dropped, but by then he had spent nearly two years in Moscow’s worst jails. I was writing a story on the miserable state of Russian prisons – the prison population had risen to more than a million, and the prisons had become one of the world’s leading TB incubators – and I wanted to talk to Stanley.
I arrived too late. Stanley was already behind his turntables. So I was put to work, pouring beer behind the bar. All eyes were fixed on the male strippers who paraded on top of the long bar that ringed the center of the club. “We usually get upwards to eight hundred in here on Friday nights,” Stanley screamed as Puff Daddy blasted out from huge speakers. (Nine hundred and twenty girls, he said, were the house record.) Stanley had stacked the speakers on top of one another, building a barricade to protect him from the sweating masses. “It can get a little–” I could not make out the end of his sentence. But I saw what he meant.
The Duck’s managers, relying on the laws of physics and desire, had mastered the art of maximizing the sexual tension a single room can permit. The girls, many of whom had to survive long train journeys to get here, got in free. They drank – only hard liquor – for free. Men were allowed entrance only after 9:00 P.M. They gathered in a long queue outside the bar, like bulls locked in a chute awaiting a rodeo’s opening bell. The effect naturally was dramatic. The sweating mass of Russian teenaged girls danced harder and harder as the music grew faster and faster, while the older, mostly Western men lusted all the more publicly. As the fever swelled, one, then two, then many more girls took to the bar to dance. Before long they had ripped off their blouses and bras. It was not rare, Stanley would say, for the action to go farther, much farther than that.
