Nets’ Mikhail Prokhorov to run for Russian presidency

MOSCOW — After a week of surprising challenges to his authority, Vladimir Putin faces a new one from one of Russia’s richest and most glamorous figures — the billionaire owner of the New Jersey Nets says he will run against Putin in March’s presidential election.

Mikhail Prokhorov’s announcement Monday came just hours after another Russian economic star, Putin’s former finance minister Alexei Kudrin, said he was ready to work to form a new party.

The declarations underline the extent of the discontent with the man who has dominated Russian politics for a dozen years, coming on the heels of Saturday’s unprecedented nationwide protests. Tens of thousands of people gathered in the streets to denounce alleged election fraud favoring Putin’s United Russia in Dec. 4 parliamentary elections.

Prokhorov

The fraud and the party’s comparatively poor showing in the elections — losing about 20 percent of its seats, though it retained a narrow majority — galvanized long-marginalized opposition forces to conduct a startling series of demonstrations, including an enormous rally in Moscow of at least 30,000.

At a news conference announcing his candidacy, Prokhorov refrained from criticizing Prime Minister Putin or President Dmitry Medvedev, but said “society is waking up.”

“Those authorities who will fail to establish a dialogue with society will have to go,” he declared.

Medvedev has promised on his Facebook page that the alleged vote fraud will be investigated. But Putin’s spokesman, Dmitry Peskov, predicted Monday the probe will show that little vote fraud occurred and that it had no effect on the outcome.

Peskov’s comment signaled that Putin — who served as Russia’s president in 2000-2008 and stepped over to the premiership because of term limits — is holding firm, despite the protests that were the largest in post-Soviet Russia.

It is unclear how effective a challenger the 46-year-old Prokhorov might prove to be. His wealth, estimated by Forbes magazine at $18 billion, and his playboy reputation may turn off voters who resent the gargantuan fortunes compiled by tycoons even as countless Russians struggled through the economic chaos of the 1990s after the Soviet Union collapsed.

The 46-year-old bachelor is known for lavish parties and occasional scandal. He and some guests were arrested at a Christmas party in the French Alpine resort of Courchevel in 2007 for allegedly arranging for prostitutes; but he was soon released without charges.

Prokhorov made his fortune in metals and banking and became majority stakeholder in the New Jersey Nets last year. Since then, he has traveled widely to build a global fan base for team, in the process showing off his towering 6-foot-8 (203-centimer) frame and excellent command of English.

The 51-year-old Kudrin lacks that kind of flash, but as finance minister under both Putin and Medevedev he earned wide respect for his economic acumen. Kudrin was widely credited with softening the blow of the 2008-09 global downturn in Russia with his conservative fiscal policies. During Putin’s presidency from 2000-08, Kudrin set up a rainy day fund to stash some of the revenue from Russia’s oil exports. The idea angered many in the government who sought higher spending, but it ultimately proved to be an invaluable cushion.

In an interview with the business newspaper Vedomosti published Monday, Kudrin said the country needed a new liberal party and “I am to assist” in creating it.

Kudrin was fired in September for saying that he would not serve if Medvedev became premier after Medvedev agreed to step aside, become prime minister and allow Putin to run for another term. The decision by Medvedev and Putin to effectively swap positions was seen by critics as cynical and antidemocratic, so Kudrin’s dismissal could give him a principled aura.

Prokhorov said he hopes to win the support of Russia’s growing middle class, which formed the core of Saturday’s demonstrations. However, he said he agrees with only some of the anti-Putin and anti-government slogans shouted at rallies. He also did not say whether he plans to attend a follow-up protest in Moscow later this month.

He is one of several candidates who have said they will oppose Putin in the presidential election, including Communist chief Gennady Zyuganov, who has finished second in past presidential elections.

Prokhorov’s presidential bid follows his botched performance in the parliamentary race when he formed a liberal party under tacit support of the Kremlin, then abandoned the project under what he called Kremlin pressure.

He has personally blamed Vladislav Surkov, a presidential deputy chief of staff, for staging a mutiny within that party’s ranks. “I can solve that problem by becoming his boss,” Prokhorov said, referring to Surkov’s possible opposition to his presidential bid.

Prokhorov now faces the immediate challenge of collecting the 2 million signatures required to qualify for the presidential race. A number of opposition candidates and parties in the past could not even run for parliamentary seats because their applications were turned down for technical reasons.

Prokhorov also is not the first of Russian’s superrich to have ambitious political goals. Mikhail Khodorkovsky, once Russia’s richest man, has been in prison since 2003 on tax evasion and embezzlement charges that are widely seen as a punishment for having challenged Putin’s power.

The influential Russian Orthodox Church has also weighed in on the brewing controversy over the elections.

“Very serious questions have been raised, however uncomfortable for the authorities. We will hope that the authorities respond to them adequately and honestly,” church spokesman Vsevolod Chaplin told the Interfax news agency.

Copyright 2011 by The Associated Press

Abramovich v Berezovsky: what have we learned so far?

It is Britain’s most colourful legal battle. On one side is Roman Abramovich, the billionaire owner of Chelsea FC. On the other is Boris Berezovsky, the former Kremlin insider turned political exile who is now Moscow’s biggest headache. Over the past month the two oligarchs have been slugging it out in London’s high court.

Berezovsky says Abramovich, his former friend, cheated him out of more than $5bn. Abramovich denies this. Both men have faced hours of gruelling cross-examination, and accusations that they have lied about – or conveniently forgotten – what happened when they made their fortunes in the murky Russia of the mid-1990s. Abramovich is likely to finish his stint in the witness box on Tuesday. The case will continue for several more weeks.

The legal drama has opened a tantalising window into the secretive world of Russia’s mega-rich. It’s a place of off-shore bank accounts, luxury cruises in the Caribbean and business deals done in five-star London hotels. Its cast is equalling fascinating: the best QCs money can buy, bodyguards in dark shades who silently patrol the corridors like silent trolls, blonde Russian women, journalists who have flown in from Moscow and PR consultants.

But what have we actually learned so far?

1 Abramovich can’t speak English

Despite buying Chelsea FC in 2003, the oligarch’s knowledge of the language is rudimentary. He has given evidence in Russian. This has forced the judge, Dame Elizabeth Gloster, and both legal teams to listen to translation via headphones. Abramovich can say a few words, apparently. But he can’t read English at all. Consequently, the case is often lost in translation. (One area of dispute involves something called the “bolshoi balance”. This came out as “bolshoi ballet”.)

Abramovich’s aides stress their man’s educational disadvantages. He grew up in 1980s Soviet Moscow. Abramovich wasn’t able to study English at school. His teachers remember him as a friendly and popular boy, but no great scholar. His lawyers say he has a keen strategic mind, and a quick if non-verbal brain. Abramovich’s deadpan style and delivery recall Vladimir Putin, whose uncompromising answers radiate a hidden menace.

Boris Berezovsky, by contrast, speaks fluent English, delivering long, florid sentences. He attributed Abramovich’s success not to “intellectual capacity” but to his talent for getting on with people.

And then there is the vexed question of how you pronounce the oligarch’s name. The correct Russian stress is AbramOvich, not AbrAmovich. The lawyers have now got this right, just about. But everyone is still struggling with the name of Berezovsky’s Georgian business partner, the fiendishly monikered Badri Patarkashshivili.

2 Vladimir Putin is in court too

Russia’s once and future president is the third unacknowledged party in this dispute. He hovers over the proceedings like a scowling ghost. Berezovsky’s feud with Putin is well known. They fell out in 2000, and he decamped to Britain to become the Kremlin’s most fervent critic.

But it wasn’t always like this. Berezovsky’s witness statement recalls how they were once close; its tone is that of a jilted teenager’s diary. They met in 1991 in St Petersburg; Putin was head of the committee for external relations in the mayor’s office. “During this time we became friends. We met frequently and sometimes spent holidays together in Russia and abroad. He even stayed with me at my chalet in Gstaad, for several days in the early 1990s,” Berezovsky writes.

This friendship continued throughout the 1990s. Berezovsky supported the upwardly mobile Putin when he became head of Russia’s FSB spy agency – then prime minister, and then president.

There were, however, dark signs. “I was astonished to see that he [Putin] had a statuette of Felix Dzerzhinsky – the notorious and hated founder of the Cheka, the predecessor of the KGB – in his office,” Berezovsky told the court.

Their feud began when Berezovsky’s ORT TV station criticised Putin for his indifference during the sinking of the Russian submarine Kursk. During their last stormy meeting in August 2000, Putin told Berezovsky to sell ORT or go to jail. Putin’s parting words were stiff: “Goodbye, Boris Abramovich”, he said, using the formal patronymic. Berezovsky’s sorrowful reply used his affectionate diminutive: “Goodbye Volodya.”

But Berezovsky’s fall coincided with Abramovich’s rise. By the late 1990s Abramovich was a Kremlin insider in his own right. By 2000 – according to Berezovsky – he “played a central role in the selection of members of President Putin’s cabinet”, and had the power to open and shut criminal cases.

While Berezovsky plotted in exile, Abramovich served loyally and patriotically as governor of Chukotka, a frozen province in Russia’s remote far east. Abramovich admits he has a “good relationship” with Putin.

Britain may know Abramovich as the smiley guy who watches Chelsea from the VIP box. In reality, however, he is a consummate, steely backroom Kremlin operator. Sure, Berezovsky is suing Abramovich because he wants the money. But his secondary goal is to humiliate Putin.

3 Oligarchs love offshore companies

After acquiring an oil company and refinery Abramovich immediately “inserted” opaque intermediary entities between the two, the high court has heard. (Previously the oil company sold oil directly to the refinery.)

Abramovich’s new oil company Sibneft sold oil to these mysterious companies, which then sold the oil back to Sibneft for “two or three” times the price. The ruse – perfectly legal – saved Sibneft millions of dollars in tax, and reduced its tax liabilities from 35% to 5.5%.

One of these third-party entities was registered in Kalmikia, a small Buddhist republic in southern Russia. (The entity employed disabled people to qualify for tax exemptions. Asked about this, Abramovich said: “I don’t recall why this was done. But these were real people. We paid them salaries.”) Others were registered in tax havens around the world – Panama, Gibraltar, British Virgin Islands, Cyprus, and other balmy destinations. The company names, too, are mysteriously alluring – Hotspur, Octopus (used by Berezovsky), Olivesta (used by Abramovich). Berezovsky says he used these offshore havens not to avoid tax but to stop his assets being stolen.

Britain’s Clydesdale bank has a walk on role in the drama. In 2002 Abramovich paid Berezovsky and Patarkashshivili $1.3bn — in exchange, Berezovsky says, for their interest in Sibneft. Clydesdale accepted hundreds of millions of dollars of this cash. The bank then, however, got cold feet and told Berezovsky to take his money elsewhere.

4 Oligarchs adore British courts

Rich Russians don’t trust their own legal system. It is too susceptible to political influence, too corrupt, too fundamentally lacking in transparency. Instead they sue each other in London. English courts have become the place where wealthy Russians settle their feuds, unhappy marital disputes and libel actions. Berezovsky v Abramovich is now the world’s biggest private litigation battle. But the case is a uniquely Russian one – a tale of greed, political manipulation and deceit in the murky years of Boris Yeltsin’s presidency. Abramovich’s QC Jonathan Sumption compared 1990s Russia to “medieval England”.

A couple of doors down from court 26, where this case is being heard, Berezovsky is involved in another case against Vladimir Terluk. Terluk appeared on Russian TV and claimed that Berezovsky killed Alexander Litvinenko. Berezovsky sued him for libel and won. Terluk (with the assistance of the Kremlin) is appealing. The libel lawyers, Carter-Ruck, meanwhile, are involved in another case, involving Alexander Lebedev, the ex-KGB officer and now owner of the Evening Standard and Independent. Lebedev recently punched a construction maganate, Sergei Polonsky, on Russian TV. Polonsky has sued him in London after he allegedly bragged about it afterwards. And then there is Yelena Baturina, the wife of Moscow’s sacked mayor Yuri Luzhkov. She has just successfully sued the Sunday Times for libel after it wrongly alleged she was the owner of a 65-room mansion in Highgate, north London.

All this is good news for London’s eager barristers and translators – not to mention its security guards and deliverers of sushi. (Berezovsky and his team take lunch in a consultation room.) Sumption has even delayed his elevation as a supreme court judge to act as Abramovich’s lead counsel. There is speculation his fee for the case is between £3m and £10m. As well as London, Russian companies are also slugging it out in New York and Cyprus.

5 The meaning of krysha

The word of the trial. Literally, it means “roof” in Russian. But it carries a kaleidoscope of other associations: an arrangement; lobbying; political services; icebreaking; protection from murder by Chechen terrorists and bandits; fixing; and a long-term relationship with more or less regular payments.

Abramovich’s case is that he hired Berezovsky – a figure with svengali-like influence over Yeltsin – to give him krysha. In 1994 Abramovich was a relatively small-scale oil trader keen to profit from the opportunities offered by privatisation. Berezovsky, at this stage, was an unofficial member of Yeltsin’s entourage and the president’s tennis partner. In 1995, with Berezovsky’s help, Abramovich’s Sibneft in 1995 won a rigged auction for an oil company and refinery – a step that made him very rich indeed. In return Abramovich made regular under-the-table payments to Berezovsky. These totalled several hundred million dollars – with sums of up to $5m handed over in cash.

Abramovich says he also coughed up for Berezovsky’s private jet travel, bought him a chateau in France, and paid for jewellery for his girlfriend.

Berezovsky doesn’t deny the payments. But he says that they were simply his rightful share of his profits accruing from Sibneft, in which he and Patarkashshivili were each 25% partners. There was no krysha arrangement, he insists. Berezovsky says Abramovich screwed him over after he fell out with Putin, forcing him to sell his interests in Sibneft at a knockdown price of — well — $1.3bn.

Abramovich says he paid this enormous sum for krysha. This is surely the most expensive roof in the world.

One footnote. The word krysha features in the WikiLeaks documents released last year. In a cable describing corruption in Moscow, US diplomats note that Russia’s FSB spy agency – former boss Vladimir Putin – offers the best krysha of all, extending its protective arm to Moscow’s biggest mafia gang.

Alexander Lebedev reveals his street fighting past after YouTube brawl

It has become a video sensation: the moment when Alexander Lebedev punched a fellow businessman live on Russian TV. Ever since Lebedev – the billionaire owner of the Evening Standard and Independent – floored tycoon Sergei Polonsky, speculation has swirled: where did Lebedev learn his pugilistic skills? The KGB, perhaps? And why did he swing first?

In an interview with the Observer, Lebedev discloses that his dust-up with Polonsky on a show about the global economic crisis wasn’t his first brawl. The oligarch said he had been involved in numerous street fights in Moscow during the 1970s and 1980s – the final years of the Soviet Union.

It was an era characterised, he said, by excessive boozing, hot tempers and social disorder. “Moscow was full of hooligans back then. If you went for a walk in the evening in the street you always got someone asking for money,” he recalled. “Everyone in the Soviet Union was doing boxing or karate. I was party to a lot of street fights. People were always drunk.”

Sometimes he came off worse, but sometimes he bested his opponent. He said on several occasions his face got covered in bruises and “a couple of times” he woke up in hospital. These fistfights occurred not just when he was a young student but also when he was an “officer” – after he had joined the KGB.

At home in Russia, Lebedev has found his attempts to enter government repeatedly blocked. But since the punching incident on Russia’s NTV channel his credibility has soared. The tabloid portal Lifenews.ru has even hailed him as a national hero. Prime minister Vladimir Putin – a black belt in karate – seems less impressed, however. Last week he suggested that veterans from the Soviet war in Afghanistan should be sent in to sort out the country’s brawling oligarchs.

Speaking in private Mayfair offices belonging to his son Evgeny in London, Lebedev said he had no idea that Polonsky was going to be on the show, and that Polonsky had then needled him off-camera. Polonsky had behaved obnoxiously, Lebedev said. During the broadcast the construction magnate was “extremely agitated”, according to Lebedev.

The brawl came at a delicate moment in the shadow world of Russian politics.with Putin – Russia’s pre-eminent politician – deciding to stand in the presidential elections in the spring of 2012 and return to the Kremlin. The press baron said he thought Putin wasn’t relishing the idea of a comeback because two decades after the demise of communism Russia was in poor shape. “The crisis in Russia is different from the crisis in Italy or the US,” Lebedev said. “The infrastructure is 50 years old. The industrial base is completely eroded. Russia is not producing anything. Corruption is beyond any normal sensible proportion.”

During his visit to Moscow this month, David Cameron, the British prime minister, recounted how two charming young Russians approached him on his gap year trip to the USSR in 1985 and struck up a conversation. They were, Cameron suggested, KGB. Lebedev, who served as a KGB spy in the Soviet embassy in London in the late 1980s, said that he thought that this unlikely. He said that the KGB’s reputation for efficiency had been grossly exaggerated. “It could have been anything. Maybe [they were spies], maybe not.”

Lebedev met Cameron briefly in Moscow at a party in the British embassy. Of the prime minister, he said: “I think he is qualified for the job.” According to Lebedev, when his son Evgeny recently met Hamid Karzai in Afghanistan, Cameron telephoned Evgeny to find out what was said – a tantalising hint of Downing Street’s continuing backroom contacts with newspaper proprietors in the wake of the hacking scandal.

Lebedev was reluctant to talk about recent management changes at the Independent or the removal of the paper’s veteran editor, Simon Kelner, in July. Lebedev also said he didn’t know anything in advance about the Independent‘s serialisation of Julian Assange’s unauthorised autobiography, declaring: “Now you see! I’m not interfering.”

He added: “We asked Simon [Kelner] whether he would become number one in an international federation devoted to supporting investigative journalism. That is the job he has been offered. I think he likes the idea.” Asked about the editor’s departure, Lebedev said Kelner had occupied the position for nearly 14 years and it was time for something new.

Lebedev was speaking before a fundraising gala held on Thursday night at Hampton Court. The event to raise money for the Raisa Gorbachev cancer foundation was hosted by Evgeny Lebedev, together with Graydon Carter, the editor of Vanity Fair, and Colin Firth.

The publisher’s fraught relationship with the Russian state extends to the security services – he is suing Russia’s Federal Security Service (FSB)the successor agency to the KGB, after it raided his bank last year. He said: “The case is being heard in the arbitration court. We are asking for $10m (£6.4m) in compensation.”

Was Alexander Lebedev’s punch misguided? | Open thread

John Prescott jabbed an egg hurler, Wendi Deng slapped a foam pie thrower and now the Russian billionaire owner of the Independent and Evening Standard, Alexander Lebedev, has landed a hook on a fellow talkshow guest. Lebedev, who swung for Russian real estate developer Sergei Polonsky after he expressed a “desire to give [him] a punch in the chops”, later claimed his actions were justified. “In a critical situation, you don’t choose: I don’t see any reason to get hit first if you know it’s coming,” he said.

But is violence in situations like these ever justified? Can we excuse the actions of politicians and media moguls who lash out on instinct? Or should we expect them to behave peacefully at all costs?

Russian billionaires come to blows

In his skinny jeans and basketball boots, he may appear to be the model of a modern media mogul. But Alexander Lebedev, the billionaire owner of the Independent and London Evening Standard, has shown a flash of his old KGB steel after punching a businessman in the face during a Russian television show.

Lebedev, 51, knocked Sergei Polonsky, a property developer, from his chair as both men were appearing as guests on a show about the global financial crisis that was being recorded in Moscow for the NTV channel on Friday.

The incident took place when Polonsky, a wealthy real estate developer, lambasted his fellow pundits and gestured at Lebedev saying: “I’m already worn out from the desire to give [him] a punch in the chops.” In response, Lebedev said: “Well, try it” and sprang to his feet.

Lebedev was persuaded by the host to take his seat, but seconds later he swung from a sitting position and hit Polonsky with a right cross as the latter began criticising him again.

A second blow which did not connect cleanly sent the developer tumbling backwards in his chair to the floor.

The newspaper owner then advanced across the stage in a hunched, pugilist’s pose and stopped in front of Polonsky, saying: “Go on then, or are you waiting for me to take off my glasses?”

There were gasps of shock and the host called security guards as the two faced off. A stricken-looking Polonsky, 38, the former owner of Mirax Group, a large developing company that went bankrupt earlier this year, did not respond for some moments before mumbling: “I’m in shock.” Both men were persuaded to calm down.

Polonsky is well known for his brash statements, in particular saying in 2008 that anyone without a billion dollars is a “loser” and “those who don’t have a billion, can go to hell”.

During the recording of the NTV show he reportedly complained to Lebedev for drawing public attention to a crack in a skyscraper Polonsky was building in Moscow.

Both men commented on the confrontation on social media over the weekend. Polonsky posted a picture of a scratch on his arm and of the seat of his jeans with a tear in it. He said he had requested footage and would consider legal action against Lebedev.

“NTV has promised to give a full copy of the programme for a court action,” Polonsky wrote on Twitter. “How disgusting and repulsive it all is.”

Lebedev, who served as an officer in the KGB and Russia’s foreign intelligence service, played down the incident in interviews with local media.

He told a news agency he had asked Polonsky to confirm whom he wanted to punch: “I said, ‘Do you mean me?’ He replied, yes. After which I neatly neutralised that absolutely unfounded threat.”

Lebedev also said Polonsky had “behaved like a street hooligan”, been rude to several guests and conducted himself with “real aggression” during the recording of the show.

“I grew up in Soviet Moscow and unfortunately, as a youth, took part in many such incidents,” he wrote in his blog, saying that normally you do not get a warning when you’re about to be hit.

“In a critical situation, you don’t choose: I don’t see any reason to get hit first if you know it’s coming.”

In a sharp aside, Lebedev added: “Now he’s showing his ripped trousers, which is rather difficult to comment on. He got it in the face, but he holds up trousers with a hole in the backside. Strange.”

Lebedev joined the KGB in the early 1980s and trained at its spy school, the Red Banner Institute, where he most likely received instruction in hand-to-hand combat.

He transferred to London in 1987 and worked there as a foreign intelligence officer until 1992.

He is a keen sportsman and swims or pumps iron every day in one of several gyms at his home and offices.

The two men received expressions of support online, with Lebedev appearing to gain the most.

Dmitri Rogozin, Russia’s representative to Nato, tweeted: “Nice one, Lebedev, although fighting is not good. He deserved it. You’re a real man.”

TV tantrums

The clash between Alexander Lebedev and Sergei Lobonsky Polonsky is the latest in series of tantrums and bust-ups caught by TV cameras.

John Prescott’s left jab at an egg-throwing protester during the 2001 election campaign overshadowed the launch of Labour’s manifesto when TV cameras captured the then deputy prime minister – and former amateur boxer – landing a punch on a farm worker in Rhyl, north Wales.

The 29-year-old protester’s girlfriend said of Prescott’s target afterwards: “He is a countryside contractor from Denbigh, a placid lad who has never been in trouble.”

Earlier this year, Wendi Deng’s slapdown of the protester who threw a foam pie at her husband, Rupert Murdoch, while he was being questioned by a parliamentary select committee over phone hacking was beamed across the world. Commentators celebrated her vitality and dubbed her “tiger woman” and “Charlie’s Angel”.

Meanwhile, former prime minister Gordon Brown showed he was not one to be messed with after an unhappy interview with Adam Boulton on Sky News. He was pictured glowering menacingly at the journalist before storming from his chair, refusing any goodbyes.

Other famous bust-ups include Grace Jones, who attempted to beat up talkshow host Russell Harty live on TV in 1981 after he “provoked her” by apparently turning his back on her, and singer-songwriter Björk, who was pictured flying into a rage at an airport in Thailand in 1996, at a British journalist who she claimed had been pestering her for four days.

A year later, chatshow presenter Clive Anderson enraged the Bee Gees on his BBC2 programme. Anderson revealed, without warning, that in the 1960s the group had been called Les Tosseurs. The Australian disco kings stormed off stage when Anderson concluded: “Well, you’ll always be tossers to me.”

Damien Pearse