GODFATHER KREMLIN OF THE GODFATHER KREMLIN OF THE Boris Berezovsky and the Looting of Russia Paul Klebnikov Harcourt, Inc. NEW YORK SAN DIEGO LONDON Copyright © 2000 by Paul Klebnikov All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the publisher. Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida 32887-6777. www.narcourt.com Library of Congress Cataloging-in-Publication Data Klebnikov, Paul. Godfather of the Kremlin: Boris Berezovsky and the looting of Russia/Paul Klebnikov. p. em. Includes bibliographical references and index. ISBN 0-15-100621-0 1. Berezovskire, B. A. (Boris Abramovich), 1946- 2. Businessmen-Russia (Federation)-Biography. 3. Capitalists and financiers-Russia (Federation) Biography. 4. Russia (Federation)-Economic conditions-1991- I. Title: Boris Berezovsky and the looting of Russia. II. Title. HC340.12.K555 2000 338.092-dc21 99-462183 [B] Text set in Simoncini Garamond Printed in the United States of America First edition ACEGIKJHFDB To Jim Michaels /or training me as a reporter; To Forbes for standing firm, To Musa /or her support TABLE OF CONTENTS Pre/ace xz Introduction 1 Cast of Characters 7 1. The Great Mob War 11 2. The Collapse of the Old Regime 46 3. Trader's Paradise 77 4. Selling the Country for Vouchers 110 5. The Listyev Murder 144 6. Privatizing the Profits of Aeroflot 170 7. The Race for Oil 188 8. The Black Treasury of the Yeltsin Campaign 212 9. Oligarchy 248 10. Vladimir Putin Takes Power 284 Epilogue 318 Appendix I: Boris Berezovsky Appeals to the President 327 Appendix II: The Yeltsin Campaign Covers Up 337 Appendix III: Berezovsky's Empire 345 List ofS ources 346 Notes 361 Index 391 vii Things fall apart; the center cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity. W. B. YEATS