Normally I don't care for Latynina much, but she's good here.
Chris Doss The Russia Journal ------------------ Moscow Times May 15, 2002 Oligarchic System Rules By Yulia Latynina
If you watch state-owned RTR television and read state-owned Rossiiskaya Gazeta newspaper, you know that Russia's new leaders have booted impudent insiders like Boris Berezovsky out of the Kremlin and rounded the rest of the oligarchs up into a harem, where they quietly try to outdo one another in the service of the sovereign.
Foreign journalists watch RTR and ask me: "Is it true that the era of the oligarchs in Russia has come to an end?"
A year and a half ago oligarch Oleg Deripaska bought the Gorky Auto Works, or GAZ.
A month later, two trucks loaded with stolen spare parts were caught at the factory gate. The son of the head of GAZ security was riding in one of the trucks. Some 80 percent of spare parts produced at the plant were carted off
in exactly this way.
Then a car dealer showed up at the GAZ plant. The dealer had done time in the early 1990s and become a well-known criminal figure. He produced a document showing that GAZ owed him 140 million rubles ($4.5 million) for prep work contracted out to his dealership's service department.
GAZ didn't pay the 140 million rubles because it figured that the dealer had
stolen much more than that from the plant over the years. And because the plant was already carrying 15 billion rubles in similarly questionable debt.
The dealer sued and won, but GAZ still refused to pay.
Then the dealer went to the office of the presidential plenipotentiary representative, and said: "Help me out, guys! You were the ones who wanted to put pressure on this oligarch to bring him around to your way of thinking."
The bureaucrats put the squeeze on GAZ. And GAZ again refused to pay.
The dealer then went to Moscow and approached federal agencies known to be unhappy with the oligarch. He said: "Come on, guys. You were looking for a way to lean on the oligarchs. Here you've got one who's totally out of line.
He's openly breaking the law and not paying his debts to the little guy with
prison tattoos on his fingers."
Honest bureaucrats from Moscow working hard to restore the executive chain of command ordered GAZ to pay the debt. And GAZ again refused.
Instead, the GAZ security department sat down and crunched the numbers. They
calculated that with the number of mechanics employed at the dealership in question, it would have taken 389 years to perform 140 million rubles worth of prep work. They explained to the dealer that if he persisted, they would have him arrested for fraud. And no one in Moscow trying to restore the "executive vertical" would be able to save him.
To repeat: Dealers like this hold 15 billion rubles in GAZ debt. So what's the conclusion?
That whether Putin likes it or not, only the oligarchs can manage the economy because they're the only ones capable of restoring something resembling a legal infrastructure on the territory of their factories -- an infrastructure that has disappeared everywhere else in Russia.
It's true that the federal government is trying to build a strong, even authoritarian state. But along side this authoritarian state, another feudal
structure is developing based on one simple principle: It doesn't matter who's right or wrong, it matters who you know. The law is reserved for your enemies.
The result resembles Persia under the Achaemenian Dynasty (559-330 B.C.), when the Persian state was mighty and fearsome and the Persian rulers bore the title King of Kings.
This title testified not to the rulers' might, however, but to their weakness. The rulers of the Achaemenian Dynasty were Kings of Kings because their kingdom contained independent kings whom they could not destroy. The best they could do was to set them at each other's throats.
The Kremlin is now doing essentially the same thing. The authorities are capable of destroying individual oligarchs. But the authorities themselves are merely a part of the oligarchic system.
Yulia Latynina is a journalist with ORT.