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The Real Story Behind Vladimir Gusinskiy's Arrest

The 13 June arrest on embezzlement charges of Vladimir Gusinskiy, President of the Russian Jewish Congress (RJC), Vice President of the World Jewish Congress (WJC), one of the most prominent Russian "oligarchs" (founders of the semibankershina, "the rule of the seven bankers," under Yeltsin), and international media magnate has caused a storm of protests in Russia, Europe, Israel, and the U.S. President Clinton saw fit to comment on Gusinskiy's travails and his friends in the U.S. Congress - spearheaded by longtime Congressional "friend of Gus," Tom Lantos (D-Cal) - worried aloud about state repression under former KGB officer, now president, Vladimir Putin. A delegation of U.S. businessmen canceled a Moscow capitalists' pow-wow in protest, and Israeli premier Yehud Baraq and WJC big wigs have voiced concern over Gusinskiy's fate. Most observers have, correctly, identified the fierce criticism of the Chechen campaign by Gusinskiy's Media Most outlets, especially NTV, and Gusinskiy's support of Kremlin opponents, especially Moscow Mayor Yuriy Luzhkov and former premier Yevgeniy Primakov, in last December's parliamentary elections as reasons behind the Kremlin's strong arm moves against his media empire. But the real story of why Vladimir Gusinskiy is cooling his heels in a Moscow jail goes much deeper than that and involves Israeli and U.S., as well as Russian, politics, the reach and influence of the WJC, and the ambitions of Oligarch Number One, Boris Berezovskiy (hereafter "BAB").

BAB, Gusinskiy and the RJC The "clash of the oligarch titans," as the nationalist weekly Zavtra has dubbed the Berezovskiy-Gusinskiy rivalry, has its roots in a struggle over control of the RJC and influence in the WJC, organizations that can muster political and economic muscle across the globe.  Following the re-election of the oligarchs' front man, Boris Yeltsin, in 1996, the oligarch consensus began to break down. Oligarchs "one" (BAB) and "two" (Gusinskiy), who united to back Yeltsin, fell out over the creation of - and control over - the RJC. Gusinskiy founded the organization earlier in 1996 and BAB's attempts to join the RJC were, according to Moscow sources, rebuffed, probably on Gusinskiy's orders.

 Control over the RJC yielded substantial benefits to Gusinskiy, who already controlled Russia's second most watched TV channel, NTV, and who had exploited Kremlin contacts to set up Most Bank, the core of his business empire. "Gus" had control over an organization with a $10 million budget that guaranteed him automatic influence with the network of Jewish oligarchs (six of the original "seven bankers," not to mention a host of lesser regional oligarchs and counterparts in former Soviet republics who are predominately Jewish) and an open door to membership in the WJC, which, according to the Russian magazine Profil, means "access to far bigger money" in Israel, Europe, and the U.S. "Gus" established ties with Israeli politicians, boosting Nathan Sharansky's party of Russian-speaking immigrants, and using his satellite TV network, NTV-Plus, to help elect Baraq premier.

Gusinskiy has substantial business interests in Europe and Israel, holds dual Russian-Israeli citizenship, owns 25% of the popular Israeli newspaper, Maariv, and aspired to the presidency of the WJC, which, according to Profil, would have made him "invulnerable."  Moreover, Gusinskiy's Most Bank was the most likely agent for handling Russia's portion of the $1.3 billion Swiss fund for Holocaust victims (about 10% of the total) and was the preferred partner for such foreign investment banks as Lehmann Brothers. Not bad for an oligarch whose ties to organized crime are common knowledge in Russia.

BAB, however, had other plans, using his ties to the Kremlin and his own media empire, which includes ORT-TV, which overtook NTV early on as Russia's most popular TV network, to launch an "information war" on his rival (more on that later). Meanwhile, BAB and his business partner, Roman Abramovich, created their own Jewish social/political organization, the Federation of Jewish Communities (FJC) last fall. Its head is Berl Lazar, who was sent to Russia by the Brooklyn-based Orthodox Chabad Lubavitcher movement in 1991. Lazar immediately identified the RJC as the enemy, telling Berezovskiy's Nezavisimaya Gazeta that the RJC was nothing more than a club of "Reform Jews" who did not observe "basic Jewish law." Lazar's goal has been to mobilize Orthodox Jews in the former Soviet states to oust the RJC as the leading Jewish organization in the collapsed Soviet empire. He has also sought to displace Gusinskiy ally Adolf Shayevich as Russia's chief rabbi-and found an ally in BAB.

BAB's information war on Gusinskiy and "Operation Putin" BAB's "information war" on Gusinskiy focused on what - for a Jewish banker who has bragged of his influence in the Kremlin - would appear to be an explosive issue in post-Communist/oligarch Russia. BAB has chosen to question the loyalty to Russia and Russian patriotism of magnates who hold dual citizenship, have ties to U.S. and Israeli politicians, and generally seem to boost the New World Order of supra-national business and political ties. Such people cannot be considered "national capital," that is, tycoons who, like American robber barons of old, supposedly built a great industrial superpower (sverkhderzhava in Russian; those who dream of a great Russian state are called derzhavniki). No, such people cannot be trusted, especially if they question an independent Russian foreign policy line that opposes American hegemony (the Kremlin line is the creation of a "multi-polar world"), and attack the "anti-terrorist" action in Chechnya, effectively giving aid and comfort to the terrorists and undermining "our guys" in the army. They are a fifth column in the Great Conspiracy to Destroy Russia.

It helps if the attacking oligarch has his children baptized - as BAB has - and secretly finances "patriotic" publications like Zavtra, which recently took BAB's side in the "clash of the oligarchs." The "patriotic" line seems to be: He's an S.O.B. - but our S.O.B.  BAB has gone to great lengths to portray himself as a derzhavnik. A defensible position, you might say. If Russia must have an oligarchy, then let it be headed by "our" S.O.B. like BAB rather than "theirs." There are a few things, however, that point to BAB as decidedly a plain old S.O.B., loyal to nobody and nothing other than his own ambitions. Among them is what Moscow wags have taken to calling "Operation Putin," the carefully planned boosting of Vladimir Putin as Boris Yeltsin' anointed successor. According to Kremlin sources, BAB was the originator of the plan, though other interested parties eventually added their own touches to what was essentially a plot to derail democratic elections and preserve the power and influence of the "family" and the oligarch group headed by BAB and Abramovich after Yeltsin's retirement.

The plan was outlined in March of 1999: the "family," fearing that Luzhkov and Primakov would come to power in upcoming parliamentary and presidential elections, began casting around for a suitable - and pliable - Yeltsin successor, and planned an information war against the Luzhkov-Primakov "Fatherland" electoral bloc. The plan revolved around provoking renewed warfare in the North Caucasus and boosting someone - a loyal someone - tied to the security apparatus into the premier's post. Both Luzhkov and Primakov had voiced some reluctance in the past to use force to solve the Chechen question. Gusinskiy, closely aligned with the Moscow Mayor, could be counted on to criticize any war that raised the delicate "nationalities" question, making him vulnerable to BAB's information warfare. An appropriate war was arranged.

That summer, Premier Sergey Stepashin, considered weak and indecisive by the Kremlin, was replaced by Putin, who headed both the Federal Security Service (FSB), the successor to the KGB's domestic arm, and the Security Council. BAB and Kremlin staff chief Aleksandr Voloshin held a series of clandestine meetings with Chechen warlords in Europe, agreeing to finance an invasion by Chechen "holy warriors" of the neighboring republic of Dagestan, providing the splendid little war the Kremlin needed. Putin, as chief of the Security Council, had Russian troops removed from the Chechen-Dagestan border.  In early August, the Chechens crossed the border and Putin mobilized army and Internal troops units to meet the threat. Consequently, Putin's poll numbers began to climb, but, according to Kremlin deep throats, the "family" and BAB were disturbed that the "Fatherland" bloc was still outpacing the pro-Putin "Unity" movement, which had been hastily organized by BAB and the presidential staff. Moreover, Putin had yet to overtake either Luzhkov or "Primo" in the polls.

What could the Kremlin do to a) drive Putin's poll numbers higher; b) ensure overwhelming public support for a war that had so far not touched the lives of most Russian citizens; and c) use that support to arrange an electoral victory for both Putin and "Unity"? How about something that would very much "touch" the lives of ordinary Russians - like a series of terrorist bombings that killed some three hundred innocents while sleeping in their beds? That is exactly what happened in September and to this day the questions raised by the bombings - the use of explosives found only in tightly controlled military installations, for instance - and other oddities have not been adequately addressed by the Russian investigators (for more, see earlier articles on this website and in Chronicles).

The bombings ensured broad public support for the war and Putin's, as well as "Unity's" poll numbers skyrocketed. Meanwhile, ORT's information war tied Luzhkov and Primakov to the disloyal Gusinskiy and broadcast gruesome home videos, captured by Russian forces, of the Chechens torturing and decapitating Russian victims. The Chechen field commanders, the men BAB and the Kremlin had cultivated close ties with and even financed, were now denounced as savages. Putin promised to "wipe out" the terrorists wherever he found them, "even on the toilet." His approval numbers climbed to near seventy percent.

Then came the clincher: even as the information war was undermining "Fatherland" and destroying Luzhkov's hopes of becoming president, Yeltsin announced his early retirement, having anointed Putin as his chosen successor. Yeltsin's New Year's Eve announcement meant that the elections would take place ahead of schedule, in March, leaving little time for the Kremlin's foes to stage a comeback-or for the war to go wrong. The plan worked brilliantly, with Putin winning a first round victory. More importantly, from the "family's" viewpoint, his involvement in the planning of "Operation Putin" provided them with a basis for blackmailing the new president if need be. Simply beautiful.

What Does the Kremlin Want? Some fun facts and a few rumors:

1) Russia has the third largest Jewish population in the world behind the U.S. and Israel.

2) NTV-Plus reaches nearly a quarter of Israeli TV viewers and played a major role in Baraq's election according to Israeli sources. It also broadcasts to the Russian-speaking Diaspora in North America. Gus has recently expanded his media empire in Europe.

3) Media Most is in debt to the state-controlled Russian gas monopoly Gazprom to the tune of hundreds of millions of dollars, money that Gus has failed to pay back.

4) Media Most is the nominal owner of both NTV and Gus's 25% stake in Maariv, an important Israeli daily.

5) Lazar has managed to get himself elected as Chief Rabbi of Russia, disputed by Gus's man, to be sure, but Lazar appears to have considerable support from Orthodox Jews in the former Soviet Union. The WJC will have to reckon with the Brooklyn rabbi.

6) The Kremlin plans to force "outside management" on Media Most - acting on the pretext of Gus's huge debts to Gazprom. Gusinskiy himself may eventually be released. The Kremlin's real target is Media Most.

7) Baraq himself is now the target of a corruption investigation. It seems that certain "non-profit" organizations may have funneled "soft money" to him during the election campaign. Gusinskiy may have been involved. Meanwhile, Gus's business partner in Israel, Ofer Nimrodi, has been charged with a series of crimes, including contract murder.

8) Russian Interior Minister Rushaylo, who has long been viewed by Russian observers as an agent of the "family" and BAB, visited Israel in June, supposedly to return an Israeli boy who been held hostage by the Chechens (there are about 40-50 Jewish hostages in the North Caucasus). Rushaylo met with Israeli officials to discuss anti-terrorist cooperation with the Jewish state, which sees the Chechen episode as part of a broader Islamic threat. Shortly thereafter, Gusinskiy was arrested.

So what does the Kremlin want? And why has Putin appeared to be unperturbed by Western criticism of Gusinskiy's arrest? Control over Media Most would squelch the only opposition media left in Russia and would give the Kremlin-and BAB-an outlet to influence public opinion in Europe, North America, and Israel. The Gusinskiy case could provide the Kremlin with information to blackmail Baraq and certain U.S. congressmen.  Moreover, influence in international Jewish organizations could bring considerable financial and political rewards. Power, money, and prestige are the goals of the game, a game of ruthless elites who will stop at nothing to get what they want. Ordinary citizens of Russia, Israel, or the U.S. are viewed as mere pawns in the elite game. It is simply irrelevant to label them "ours" and "theirs." The S.O.B.s mean to have their fun.