The senators quickly realized that they’d stumbled onto something much bigger than one horrific case. They had inadvertently discovered a new method for fighting human rights abuses in authoritarian regimes in the twenty-first century: targeted visa sanctions and asset freezes.
With the brakes off, the oligarchs embarked on an orgy of stealing. The tools they used were many and with no law enforcement to stop them, their imaginations ran wild. They engaged in asset stripping, dilutions, transfer pricing, and embezzlement, to name but a few of their tricks.
Instead of 150 million Russians sharing the spoils of mass privatization, Russia wound up with twenty-two oligarchs owning 39 percent of the economy and everyone else living in poverty.
It bears mentioning that in Russia there is no respect for the individual and his or her rights. People can be sacrificed for the needs of the state, used as shields, trading chips, or even simple fodder. If necessary, anyone can disappear. A famous expression of Stalin’s drives right to the point: “If there is no man, there is no problem.”
This was typical billionaire psychology. If I hadn’t had a competing offer, Safra wouldn’t have done anything. But since another deal was on the table, Safra couldn’t resist.
What I’d completely missed was that the world is one big sea of liquidity. If the tide goes out in one place, then it goes out everywhere. When big investors started to lose money in Asia, they began unloading risky securities from their portfolios everywhere else in the world and anything Russian was at the top of that list.
The moral is simple: when it comes to money, Russians will gladly—gleefully, even—sacrifice their own success to screw their neighbor.
The Russians have great skill in talking without saying anything, and this was on full display that evening.
In any major crisis, what you do in the first few hours defines it forever.
You may wonder why Vladimir Putin allowed me to do these things in the first place. The answer is that for a while our interests coincided. When Putin became president in January 2000, he was granted the title of President of the Russian Federation, but the actual power of the presidency had been hijacked by oligarchs, regional governors, and organized-crime groups. As soon as he took office, it became his highest priority to wrest power from these men and return it to its rightful place in the Kremlin, or more accurately, into his own hands.