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Russian oligarch Roman Abramovich

AKIRA SUEMORI/AP

By one count, there are about three dozen "oligarchs," the somewhat menacing term used in the Western media to describe the men who became overnight billionaires by nabbing Russian state assets on the cheap in the 1990s. One of them, former oil baron Mikhail Khodorkovsky, is rotting in a northern Russian prison. Most of the rest are free, though the small number of them that ran afoul of the Kremlin live in luxurious exile.

The revelations in a London court trial that pits Roman Abramovich against Boris Berezovsky makes you wonder why there aren't more oligarchs keeping Khodorkovsky company. Or why anyone with an IQ greater than that of an aberrant trout would invest a single ruble, dollar, pound or euro in Russia. Wasn't Vladimir Putin, the once and future president, supposed to have cleaned up their acts?

We all know that the oligarchs presented the rawest face of capitalism during capitalism's rawest days—the decade after the breakup of the Soviet Union, when Boris Yeltsin unloaded government-owned goodies, from energy to telecommunications, at rock-bottom prices in exchange for cash to fund his 1996 re-election campaign. The scheme was called "loans for shares" and was recently described by the economist Paul Roderick Gregory as "the largest single heist in corporate history and a lasting emblem of the corruption of modern Russia."

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The stories of crony capitalism, theft, corruption, chicanery, boorish behaviour, violence and gangland hits are so astonishing that they would seem tame by medieval standards. At some points during the decade, gang-related murders were running as high as 20 a day, according to the Financial Times, and it is well known that the infamous "aluminum wars," fought to gain control of Siberia's aluminum plants, resulted in a bloodbath. What is less well known is that epic corruption persisted well after the Yeltsin years, a fact made evident in the Abramovich-Berezovsky trial.

First, the truncated bios. Roman Abramovich, listed by Forbes as Russia's ninth-richest man, is owner of the Premier League's Chelsea soccer team, and collects yachts, palatial houses and jumbo jets. During the perestroika years, he sold rubber ducks. He made his billions from Russian oil giant Sibneft and from the aluminum operations that would later form the basis of Rusal, now controlled by Oleg Deripaska, the billionaire Russian industrialist whose own trial—launched against him by Mikhail Chernoy, the exiled oligarch wanted on international arrest warrants for alleged money laundering—is about to start.

Boris Berezovsky is Abramovich's onetime mentor and purported partner, as well as a high-powered Kremlin insider in the pre-Putin era. Once a media magnate whose TV stations were critical of Putin, he fled Russia in 2000 and lives in England, where he reportedly has found refuge in a fortified mansion protected by former French Foreign Legionnaires. He was an associate of Alexander Litvinenko, the former FSB (domestic successor to the KGB) employee who once claimed he received orders to kill Berezovsky. Litvinenko himself was poisoned to death in 2006 in London.

Not the nicest bunch of guys. This is from Russia with hate, and billions are at stake. The core of the London trial: Berezovsky claims that Abramovich cozened him into selling his stake in Sibneft for a fraction of its true worth after he (Berezovsky) fell out of favour with Putin. Berezovsky is suing for about $6 billion (U.S.), one of the biggest private claims in English history. Abramovich alleges that Berezovsky never owned any Sibneft shares and that the huge amount paid to Berezovsky—about $1.3 billion (U.S.)—was for his services as a "political godfather."

The point, really, is not which oligarch is owed what—who cares?—but the admissions of illegal activity that emerged from court proceedings.

Abramovich's attorney admitted that the Sibneft privatization auction won by Abramovich was a political "stitch-up" designed to exclude other bidders. On the witness stand, Abramovich explained how payments to Berezovsky were "for the opportunity of creating the oil company under his protection." He also admitted that he diverted profits from Sibneft to his own account, even though the company had other shareholders. Over all, Abramovich's side conceded that the deal that handed him Sibneft was "corrupt."

The tainted money allowed Abramovich to become one of the world's richest men, living a lifestyle that is obscenely decadent. Yet Abramovich and Berezovsky are not on trial for the money looted from Russian citizens or minority shareholders; the trial is to determine which of them ripped off the other guy.

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The oligarchs control industrial and financial Russia. The Russian state—the Kremlin—can crunch any oligarch's wealth if it determines he is more trouble than he's worth. No wonder Russia—as far as foreign investors are concerned—was, is and will remain a pariah state.

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