From Wikipedia, the free encyclopedia

Business oligarch is a near-synonym of the term "business magnate". The choice of the word oligarch denotes the significant influence such wealthy individuals may have on the life of a nation. However, in modern Russia it is very common to apply this term to any business tycoon, regardless of whether or not he or she has real political power.^[1] The term came into wide circulation after the collapse of the Soviet Union, in reference to those individuals who acquired tremendous wealth, significant political influence and often even have controlled mass media in some post-Soviet republics.

A number of prominent oligarchs, including Mikhail Khodorkovsky (far right), pictured with Boris Yeltsin in the mid-1990s

The Russian oligarchs are business entrepreneurs who started under Gorbachev during his period of market liberalization. Rare goods, such as PCs and jeans, were smuggled into the country and sold on the black market for a hefty profit, an unforeseen consequence of partial market liberalization with still excessive trade restrictions. In the 1990s, the oligarchs emerged as well connected entrepreneurs who started from nearly nothing and got rich through participation in the market via connections to the corrupt, but democratically elected, government of Russia during the state's transition to a market-based economy.

Post-Soviet business oligarchs includes relatives or close associates of government officials, even government officials themselves as well as criminal bosses who achieved vast wealth by acquiring state assets very cheaply (or for free) during the privatization process controlled by the Yeltsin government. Specific accusations of corruption are often levelled at Anatoly Chubais and Yegor Gaidar, two of the 'Young Reformers' chiefly responsible for 'shock therapy' privatization in the early 1990's. According to David Satter, author of Darkness at Dawn, "what drove the process was not the determination to create a system based on universal values but rather the will to introduce a system of private ownership, which, in the absence of law, opened the way for the criminal pursuit of money and power." In some cases, outright criminal groups in order to avoid attention assign front men to serve as executives and/or 'legal' owners of the companies they control.

Although the majority of oligarchs were not formally related with the communist party of the Soviet Union, there are allegations^{[citation needed]} that they were promoted (at least initially) by the communist apparatchiks, with strong connections to soviet power structures and access to the monetary funds of the communist party. In official media, oligarchs are usually pictured as the enemies of "communist forces". The latter is a stereotype that describes political power that wants to restore Soviet-style communism in Russia.

During Yeltsin's presidency, oligarchs became increasingly influential in politics and played a significant role in financing the re-election of Yeltsin in 1996. With the insider information about financial decisions of the government, oligarchs could easily increase their wealth even further. The 1998 Russian financial crisis hit some of the oligarchs hard, however, and those whose holdings were based on banking lost much of their fortunes. In the Putin era, the remaining oligarchs have come under fire for various alleged and real illegal activities, particularly the tax evasion in the businesses they acquired. Vladimir Gusinsky (MediaMost) and Boris Berezovsky both escaped justice by running out of Russia, and the most prominent, Mikhail Khodorkovsky (Yukos oil), was arrested in October 2003, and sentenced to 9 years.

Their defenders (often associated with Chubais's party—the Union of Right Forces) argue the companies they acquired were not highly valued at the time because they were still run on Soviet principles, with non-existent stock controls, huge payrolls, no financial reporting and scant regard for profit. They turned the businesses—often vast—around and made them deliver value for shareholders. They obtain little sympathy from the Russian public, though, due to resentment over the economic disparity they represent.

In 2004, Russian Forbes listed 36 billionaires of Russian citizenship, with an interesting note: "this list includes businessmen of Russian citizenship who acquired the major share of their wealth privately, while not holding a governmental position". In 2005, the number of billionaires dropped to 30, mostly because of the Yukos case, with Khodorkovsky dropping from #1 ($15.2 bln) to #21 ($2.0 bln).

A significant number of Russian oligarchs have bought homes in an upscale section of London, England, which has been dubbed "Moscow on the Thames".^[2] Some, like Boris Berezovsky, are expatriates, having left Russia permanently. Most own homes in both countries, and commute on a regular basis; in many cases their families reside in London, with their children attending school there. Roman Abramovich, considered the wealthiest of the oligarchs, bought the English football club, Chelsea F.C., in 2003, and has spent record amounts on players' salaries.^[3]

Former State Duma Speaker Ivan Rybkin claimed that President Vladimir Putin "is the biggest oligarch in Russia" and that Russian businessmen Gennady Timchenko, Mikhail Kovalchuk, Yuriy Kovalchuk, and Roman Abramovich are "looking after Putin's business interests and swallowing up a vast share of the nation's financial flows" [1]. Such claims have been supported later by Russian political insider Stanislav Belkovsky [2] [3] [4]. Economist Anders Åslund, author of "Russia's Capitalist Revolution" ^[4], described this story in his Moscow Times article[5]:

"Everybody around Putin is completely corrupt, but many think that the president himself is honest. In February 2004, presidential candidate Ivan Rybkin named three men as Putin's bagmen, including Gennady Timchenko, the co-founder of the Gunvor oil-trading company. After Rybkin made this statement, he vanished from the political stage. In September, the Polish magazine Wprost wrote that Timchenko, a former KGB officer and member of Putin's dacha cooperative in St. Petersburg, has a net worth of $20 billion. Officially, Timchenko sells the oil of four Russian oil companies, but how are the prices determined to generate such profits?

In a sensational interview in Germany's Die Welt on Nov. 12, Stanislav Belkovsky, the well-connected insider who initiated the Kremlin campaign against Yukos in 2003, made specific claims about Putin's wealth. He alleged that Putin owned 37 per cent of Surgutneftegaz (worth $18 billion), 4.5 per cent of Gazprom ($13 billion) and half of Timchenko's company, Gunvor (possibly $10 billion). If this information is true, Putin's total personal fortune would amount to no less than $41 billion, placing him among the 10 richest in the world."

From Russian Forbes, May 2005. Wealth in 1,000,000,000 (billion) USD.

1. Roman Abramovich 18.2 (Роман Абрамович, Millhouse Capital, sold Sibneft Oil)
2. Vladimir Lisin 7.0 (Владимир Лисин, Novolipetsk Steel)
3. Viktor Vekselberg 6.1 (Виктор Вексельберг, Renova Group)
4. Oleg Deripaska 5.8 (Олег Дерипаска, Rusal aluminium)
5. Mikhail Fridman 5.8 (Alfa Group)
6. Alisher Usmanov 5.7 (Алишер Усманов, ferrous metallurgy)
7. Vladimir Yevtushenkov 5.1 (Владимир Евтушенков, Sistema telecommunications, finance, real estate)
8. Alexei Mordashov 5.1 (Алексей Мордашов, Severstal ferrous metallurgy)
9. Vladimir Potanin 4.7 (Владимир Потанин, Interros)
10. Mikhail Prokhorov 4.7 (Михаил Прохоров, Interros)
11. Vagit Alekperov 4.1 (Вагит Алекперов, LUKoil petroleum)
12. Viktor Rashnikov 3.6 (Виктор Рашников, ferrous metallurgy)
13. German Khan 3.5 (Герман Хан, petroleum, finances, telecom)
14. Boris Ivanishvili 3.0 (Борис Иванишвили, metallurgy, finances)
15. Alexander Abramov 2.9 (Александр Абрамов, Evraz Group steel)
16. Aleksei Kuzmichev 2.7 (Алексей Кузьмичев, petroleum, finances, telecom)
17. Suleiman Kerimov 2.6 (Сулейман Керимов, investor)
18. Vladimir Bogdanov 2.3 (Владимир Богданов, petroleum (Surgutneftegaz))
19. Iskander Makhmudov 2.2 (Искандер Махмудов, non-ferrous metallurgy)
20. Nikolay Tsvetkov 2.2 (Николай Цветков, Uralsib finance)
21. Mikhail Khodorkovsky 2.0 (Михаил Ходорковский, Yukos petroleum)

• Rustam Tariko 1.9, Russian Standard vodka and banking
• Boris Berezovsky 0.73 (Борис Березовский)
• Vladimir Gusinsky 0.35 (Владимир Гусинский, MediaMost)
• Anatoly Chubais (Анатолий Чубайс, Unified Energy System)
• Shalva Chigirinsky, Sibir Energy

The wealthiest bankers by their shares in Russian banks:

• Vladimir Antonov 6-7-7-7
• Roman Avdeev 21-19-21-15
• Sergei Bazhanov 10-10-11-11
• Konstantin Bekov 17-15/16-16/17-19
• Oleg Deripaska 5-#-#-#
• Mikhail Fridman #-1-1-1
• Alexander Gitelson #-#-#-12
• Andrei Isaev #-#-#-20/21
• Nikolai Karpenko 9-6-6-6
• Petr Kellner 4-3-3-3
• German Khan #-4-4-4
• Igor Kim 21-9-9-9
• Sergei Kirilenko 16-14-15-18
• Vladimir Kogan 7-#-#-#
• Yuriy Kovalchuk 15-17-18-16
• Alexei Kuzmichyov #-5-5-5
• Maxim Lavrentyev 36-19/20-19/20-23/24
• Andrei Melnichenko 2-#-#-#
• Anatoly Motylyov 1-2-2-2
• Dmitry Orlov 11-8-10-8
• Sergei Popov 3-#-#-#
• Dmitry Pumpyansky 14-12-12-13
• Vladimir Romanov 37-19/20-19/20-23/24
• Andrei Serebrennikov 18-15/16-16/17
• Alexei Titov 22-18-13-14
• David Traktovenko 8-#-#-#
• Mikhail Volkov 20-#-#-#
• Vladimir Yevtushenkov 12-11-8-10
• Ilya Yurov 13-13-14-17

(rank as of 1.10.2005 [6] - 1.01.2006 [7] - 1.04.2006 [8] - 1.07.2006 [9])

• Rinat Akhmetov is the wealthiest man in Ukraine.
• Viktor Pinchuk, the son-in-law of ex-president Leonid Kuchma, is the second wealthiest man in Ukraine and controls much of the nation's media.
• Yulia Tymoshenko, the ex-Prime Minister of Ukraine, and a close ally of President Viktor Yushchenko, is also one of the wealthiest persons in Ukraine. She is said to have acquired her wealth when former Prime Minister Pavlo Lazarenko let her set up a company that sold Russian natural gas for shares in Ukrainian businesses.

• Business magnate
• History of post-Soviet Russia: The "loans for shares" scheme and the rise of the "oligarchs"
• Oligarchy
• Robber baron (industrialist)
• Political groups during Vladimir Putin's presidency