Murky World Of Oligarchs And Former Spies

The claim by the Kremlin that a Russian born Jewish oligarch hiding out in Israel was involved in the radiation poisoning of former Russian spy, Alexander Litvinenko in London, has added yet another layer to an already murky tale.
Moscow’s Prosecutor General pointed an accusing finger at Leonid Nevzlin who fled to Israel in 2004 to avoid charges that he ordered the murders of some of his business associates. At the time, he and another Jewish oligarch, Mikhail Khodorkovsky, owned the Yukos oil company, which was later seized by the Russian state and eventually declared bankrupt. In Nevzlin’s absence, Khodorkovsky was arrested, found guilty of tax evasion and given an eight year prison term. As a further punishment, he was sent to a remote Siberia prison camp to serve his sentence.
According to the Moscow Prosecutor General, the same type of plutonium 210 that killed Litvinenko in London was used to kill one of Nevzlin’s business competitors. The prosecutor’s office told journalists that Nevzlin and other former Yukos executives were behind not only behind attempts to wipe out business competitors but that Nevzlin had Litvinenko killed.
Nevzlin’s friends say the latest accusation against him is not only extravagant but is another attempt by Russian president Vladimir Putin and the FSB to attack oligarchs who continue to expose Russia’s role in ordering the assassinations of its enemies abroad, in particular Litvinenko. Nevzlin claims that Litvinenko visited him in Israel weeks before he was murdered and gave him documents showing how Russian intelligence was running a dirty war against former Yukos executives and oligarchs like himself and Boris Berezovsky.
Since 2003 when Nevzlin fled to Israel the Kremlin has made several attempts to have him returned to Moscow to face murder charges. In 2005, when he visited Washington and New York, the Kremlin even appealed to the White House to extradite him. Nevzlin claims that not only are the charges against him bogus but his billionaire status is a myth deliberately perpetuated by the Kremlin. He told an Israeli newspaper that all he had at one stage was $5 in a Swiss bank but the Swiss authorities warned him that the Russian government was going to try to freeze the account. He quickly moved most of the money out of the account, leaving $100,000 for family expenses.
Supporters of Nevzlin and Khodorkovsky have consistently argued that Vladimir Putin personally moved against them because they bankrolled one of his opponents in the 2004 Russian presidential election. Whether or not that is true, in 2002, two years after he took over the presidency from Boris Yeltsin, Putin warned oligarchs that they should not use their wealth to try to shape Russia’s political landscape, something Nevzlin later tried to do while in exile in Israel. Putin also told the oligarchs if they stayed out of politics they would be left alone. After that warning, in the autumn of 2002, several Jewish oligarchs, including Nevzlin fled to Israel, and Berezovsky allegedly on the advice of the dead Russian spy, Litvinenko sought sanctuary in London.
Nevzlin claims that within months of his decision to support an anti-Putin candidate in the 2004 presidential election, the Kremlin moved against him. In January 2004, he was living outside Tel Aviv when he got the news there was an international warrant for his arrest on tax evasion charges. Six months later a second warrant was issued accusing him of conspiring with a Yukos security chief to murder a businessman and his wife, and of ordering two attempts on the life of the president of East Petroleum, a Yukos competitor. Nevzlin claims the warrants were efforts by the Kremlin to fabricate serious charges in order to punish him.
However, the warrants were no threat to Nevzlin because he had been given de facto political asylum in Israel in 2003. That was done when the Israeli state granted him an Israeli passport within days of his arrival in the country. As an Israeli citizen, he was immune from prosecution because Israel has a tendency to refuse requests for the extradition of Jews resident in Israel. He has since strenuously denied that he used his wealth to fund Jewish projects in Israel as a way of courting favor with the Israel authorities or that he laundered hundreds of millions through Israel’s biggest bank.
Israel’s position on extradition is a somewhat confusing one. The 1978 law banning the handing over of any Israeli national accused of crimes abroad was amended in 1998 only because the US government had demanded that Israel hand over an American teenager, Samuel Sheinbein. He had fled to Tel Aviv after charged were issued against him for murder. The change to the law did not affect the Sheinbein case because he faced trial for the murder in Israel but it caused enough outrage in Congress for the Israeli government to amend its law. The resulting change stipulated that if a suspect wanted abroad was resident in Israel, extradition could only proceed if two factors were in place. One was that a defendant's country of origin had to have an extradition treaty with Israel. The second was that if a defendant were to be found guilty and sentenced to a term of imprisonment, the prison term had to be served in Israel.
Nevzlin’s use of Israel as an ideal place of exile was is nothing new. There has been a growing tendency in the past two decades for some rich Jews with connections to organized crime in Eastern Europe to move to Israel the moment they get into trouble with local or international legal authorities. In several instances, they have been able to do that because they had Israeli passports. By all accounts, the amending of the 1978 law had little effect and did not prevent Israel from being a place where Jews from other countries could hide out. Israeli Justice, Horan Porat, who helped amend the law in 1998, said the old legislation was responsible for making Israel a haven for criminals, not realizing the changes he was making would not considerably alter Israel’s extradition rules.
This latest element in the already murky story of the poisoning and death of former Russian spy Litvinenko in London has brought back into focus the short history of the Russian oligarchs. The term oligarch came into vogue in the early 1990s to define a group of people who suddenly became extremely wealthy, not having previously owned anything. It was the era of Russian president, Mikhail Gorbachev who was determined to liberalize the Soviet economy. Unfortunately, he did not foresee that, by suddenly opening up Russia and its republics to a semblance of a free market economy without proper controls in place, the outcome would be economic lawlessness.
Within a short time, there was an economic power vacuum filled by organized crime, opportunists and both communist party officials and members of the state security apparatus throughout the Soviet bloc. Western goods, including computers flooded into Russia. But the real opportunities for those wanting to make a lot of money came during the eventually collapse of the Soviet Union and the rise to power of a drunken, corrupt leader, Boris Yeltsin. He surrounded himself with men who wanted to privatize everything for their own ends. In effect that opened the way for well connected people to seize, sell off or hold and exploit the assets of Russia and some of its republics. In particular, those with a shrewd knowledge of banking and energy resources quickly made financial killings. Overnight men like Nevzlin, Anatoly Chubias, and Yegor Gaidara, who all now reside in Israel, became billionaires. So too did Berezovsky, Kohodorkovsky and at least 18 others.
Many of the emerging rich were well connected to the Communist Party and its state apparatchiks and as such they had all the information they needed to get things done and to assess the market value of state assets. What many people today seem to forget is that, a side from the billionaires, there are now hundreds of millionaires who were minor party officials in positions that allowed them to exploit the chaos of the Yeltsin era. Some ran state controlled factories that immediately made them their own and sold them off. Others moved into real estate, seizing state owned property. Across the board there was a confluence of elements, one of which was a burgeoning organized crime element. Members of the KGB got in on the act and quickly became partners with organized crime syndicates or provided security for the emerging rich. It was essentially a free for all and its effects are still being felt within Eastern Europe. For example, countries like Bulgaria and Rumania that have just joining the EU have high levels of corruption that can be traced back to the break up of the Soviet Union. Many of Bulgaria’s rich have organized crime connections that extend into Moscow and throughout Eastern Europe, a fact that worries the EU leadership in Brussels.
While oligarchs outside Russia point a critical finger at Putin, his supporters credit him with bringing order to the Russian economy which is now one of the strongest in the world. Russia’s energy resources alone make it a powerful global force economically and one on which Western Europe depends on for much of its gas and oil. Some observers argue that Putin’s tough stance prevented men like Nevzlin and Khodorkovsky from using their wealth to shape the political framework of Russia in a way that suited their business interests and those of western partners to whom they had become financially attached. No matter where the truth lies in the story of the Putin– Yukos battle, one thing is for sure, oligarchs like Nevzlin who fled to Israel and Britain are no longer in a position to influence the future of Russian politics. Those that remained behind thrive in a Russia that has to some extent embraced capitalism. They understand that their freedom to continue to make vast sums of money very much depends on their non involvement in the politics of the Kremlin.