Page 38 - bneMag February 2021_20210202

38 I Cover story bne February 2021
government contracts are available rather than charging economic rents, which is a much bigger business. Lukashenko’s fixation on concentrating all power in his own hands means the Belarusian oligarch system has never been able to develop very far. One of the big dangers of the changes that follow his mooted ouster is that in the economic chaos that follows Belarus will finally get its own oligarch class.
You can be a little more optimistic
in Belarus’ case, as with luck the country’s economic revival will be
led by the IT entrepreneurs who have the money, the relations with outside investors, and most importantly, ethical business principles thanks to their self-made wealth, rather than having earned their first fortunes from good connections with government.
Oligarchs in media
Media ownership plays an important role in the oligarch problem, as by controlling TV stations in particular, oligarchs gain real and unregulated political power.
When Putin took over in 2000 the two oligarchs he chose to attack first were Boris Berezovsky and Vladimir Gusinsky, who controlled the state- owned ORT (now the First Channel) and the largest privately owned broadcaster NTV respectively.
And it wasn't done subtly. Berezovsky was driven into exile and his stake in ORT was taken over by Abramovich, who was a Putin ally, and the channel is only now about to be “privatised”. Gusinsky was arrested and later complained that a figurative “gun was held to my head” forcing him to give up control of NTV, which was quickly taken over by Gazprom Media.
Putin’s control of the media was
an essential part of his programme to defang the oligarchs and was extended to the extreme of banning any foreign organisation from owning more than 20% of a Russian media business. Poroshenko played the same game: despite promising to put all his businesses in trust he explicitly excluded his TV station,
www.bne.eu
which he overtly retained control of throughout his presidency.
Leading Ukrainian oligarch Kolomoisky is widely credited with putting Zelenskiy into power in April 2019 thanks to the backing of his 1+1 TV station and
other media holdings. Moreover, it has recently transpired that the pro-Russia politician and personal friend of Putin, Viktor Medvedchuk, is also an investor in Kolomoisky’s media empire that is now agitating in Moscow’s interests.
The story is similar in Georgia, despite its democratic reputation, where there has been a running battle for control of the leading TV station Rustavi 2, an influential but financially troubled broadcaster.
Happily the power of the media
is waning slowly as internet use becomes widespread. In Russia the young have more or less abandoned watching TV in favour of YouTube videos, bloggers and a plethora of alternative online news sources that will contribute to the slow politicisation of the emerging middle classes.
The growing importance of truly independent online news was highlighted in the Belarusian mass protests last summer. Lukashenko flew in technical staff from Russia’ state- owned RT broadcaster to take over the Belarusian state media and pump out pro-regime propaganda very early on
in the revolution, but to little effect, as almost the entire population had turned to the independent Nexta Telegram channel that briefly became the most read news outlet in the world in August.
Oligarchs in the West
The West is not immune to oligarchic influence either. Their huge fortunes and their yearning for political influence makes them tempting sources of funding for western politicians.
Senior British politician George Osborne vacationed on Oleg Deripaska’s yacht, one of the top oligarchs from the end
of the Yeltsin era and Abramovich’s protégée. And UK Prime Minister Boris Johnson went as far as ennobling
Evgeny Lebedev in November, the son of Russian oligarch Alexander Lebedev and former head of the KGB station in London in Soviet times, and who now owns the UK newspapers the Evening Standard and the Independent.
Deripaska got caught up in another scandal after a Belarusian escort Nastya Rybka claimed she had evidence that Deripaska was actively planning to interfere in the US elections in February 2018.
In the US the Russian oligarchs Viktor Vekselberg and the US-based Len Blavatnik were major sponsors of Trump’s inauguration, while Trump has been linked to a major Russian real estate magnate, who probably lent him money when
his business was going badly.
Kolomoisky is also finally under
federal investigation in the US for laundering billions of dollars he stole from his PrivatBank through companies based in Delaware for years.
Most recently, the US imposed sanctions on seven Ukrainians in January who are accused of interfering in US elections on Russia’s behalf. Deripaska has been sanctioned on the same grounds, as
the Russian state sometimes makes use of its oligarchs for its own benefit or they act on their own hoping to curry favour with the leadership.
Ukrainian opposition leader,
former Prime Minister and head of Batkivshchyna (Fatherland) Party Yulia Tymoshenko was exposed using a US lobbying firm to meet with senior US politicians close to Trump during a
trip in December 2018. Tymoshenko
is also an oligarch, dubbed the “gas princess” after she participated in the oligarchic gas trading scams of the
90s to amass a fortune believed to
be worth some $350mn during her time as Energy Minister in the years before the Orange Revolution.
More insidiously, oligarchs in Eastern Europe have taken to funding think- tanks in an effort to manage the message and influence lawmakers