Thursday, November 27, 2014

Greatest scam of all time? Privatization "auctions" by Russian gangster-pols, according to Taibbi

In September, The Atlantic magazine asked The Big Question, What is the greatest scam of all time?

One answer came from journalist Matt Taibbi, then of First Look Media (which he has since left):
Dreamed up in the ’90s by Russian gangster-pols and their Western advisers, the privatization “auctions” of the loans-for-shares scheme were actually crudely rigged pantomimes in which cronies of Boris Yeltsin were handed some of the world’s largest energy companies—like Yukos and Sibneft—for pennies on the dollar, instantly creating an oligarch class.
That, of course, would include Brooklyn Nets majority owner Mikhail Prokhorov, who Taibbi in 2010 called "a real gangster."

The recalls a line (which I highlighted below) from Connie Bruck's 1/20/14 New Yorker profile of Leonard Blavatnik, The Billionaire’€™s Playlist: How an oligarch got into the American music business:
Blavatnik enjoys acclaim for his philanthropy, and an increasingly high social profile. Last April, he had dinner with Bill and Hillary Clinton at a Lincoln Center gala honoring Barbra Streisand. But he remains deeply private, wary of the press and sensitive to any inquiry about his past; he declined to comment for this article, even to confirm basic facts. (Blavatnik’s spokesman said that his silence “should not be construed or interpreted as acknowledgment of the accuracy of any or all of what was provided. It is quite to the contrary.”) Some associates are afraid to speak with reporters. Even longtime friends say that they aren’t sure exactly what he did in the nineties, or how he got the money to make his early investments in Russia, which became the foundation for his fortune. One acquaintance referred to an expression that is popular among Russian businessmen: “Never ask about the first million.”

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