Three days later Russian Interior Minister Sergei Stepashin announced that if Berezovsky returned to Russia and spoke to prosecutors, he would not be arrested. ‘Berezovsky will arrive in Russia, present his explanations, and this, I hope, will be the end of the incident,’ he said.
A week later Berezovsky returned to Moscow, visited the Prosecutor-General’s office and was questioned for four hours. He was released after the interview and told his own television crews, ‘The case against me was instigated by the Prime Minister in violation of the law’. On 26 April 1999 Berezovsky was formally charged and barred from leaving Moscow while prosecutors investigated the case.
On 1 July 1999 Swiss police raided the Lausanne-based offices of Andava and Forus in response to requests by Skuratov. The Swiss investigation was led by Carla Del Ponte, the Swiss prosecutor who had uncovered connections between the Italian drug trade and Swiss money launderers in the late 1980s and had, as a result, been targeted for assassination by the Italian mafia. She later became Chief Prosecutor of the International War Crimes Tribunal in The Hague.
Then, out of the blue, on 4 November 1999 the Russian Prosecutor-General’s office terminated its investigation. But although things seemed to have gone quiet, the case was far from over.
The threat of prosecution still hung over Berezovsky’s head and the highly public controversy would haunt him for years to come, even though he strenuously protested his innocence. In mid-July 2000, however, he received some good news: PricewaterhouseCoopers announced that it had investigated Forus’s transactions with Aeroflot - on Forus’s behalf - and had found no evidence that funds were being illegally transferred. But while the investigation seemed to go quiet for several years, the Russian authorities later tried to extradite Berezovsky from London to Moscow. It was all to no avail: the extradition application failed and Berezovsky did not return to Russia. Eventually, on 28 November 2007, a Russian court convicted and sentenced Berezovsky - in absentia - to six years in jail. From his new base in London, he dismissed the conviction as ‘trumped up’ and ‘politically motivated’.
Berezovsky’s business dealings have always been subject to controversy. One person who fell out badly with Berezovsky over his business methods was George Soros. The two had once been friends and Soros had considered financing a number of the oligarch’s deals in the 1990s. But by 2000, the ‘love affair had turned sour’, according to Alex Goldfarb, one of Berezovsky’s closest allies. Soros once told Goldfarb, ‘Your friend is an evil genius. He destroyed Russia single-handedly.’ Berezovsky retorted, ‘Soros lost money because the “young reformers” fooled him…And then he tried to convince the West - out of spite - that the oligarchs were evil and should not be allowed to control the beast.’
Business for Berezovsky was a vehicle for bringing in the wealth to finance his real interest: indulging in political intrigue. He was easily bored by the detail of entrepreneurship and left that to others. At a conference in Moscow in 2000 Ian Hague, manager of the emerging markets Firebird Fund, which invested heavily in Russia, asked Berezovsky directly,‘Could you explain how it is that every time you’ve been involved with a company, its capitalization has run down to zero?’ Berezovsky countered that the value of just about all Russian companies had fallen because of political uncertainty, adding later that each of the companies with which he had been connected had actually improved its performance.
Although events were moving against him, Berezovsky retained enough powerful contacts to get himself elected to the Duma in December 1999 as a deputy for Karachayevo-Cherkessia, a small republic close to Chechnya. This carried the additional advantage of providing immunity from prosecution. Although he may still have hoped to reattach himself to Putin’s coat-tails, it is also likely that, despite their apparent closeness, Berezovsky had by now started to have doubts about Putin. Years later he would admit to having second thoughts about Putin as President, but put them to one side.20
In the ruthless, cut-throat world of Kremlin politics alliances rarely survived for long and Berezovsky was fast losing friends. Desperate for political intelligence, in October 1999 he even asked Roman Abramovich to attend Putin’s birthday celebrations in St Petersburg. Abramovich did so and reported back to his mentor, ‘You sent me to spy on spies but I found no spies there. Normal crowd, his age, wearing denim, someone playing guitar. No KGB types around whatsoever.’21
Berezovsky had every reason to feel nervous about Putin. While both men had once been friends and Berezovsky had thrown his political weight, money, and television channel behind Putin’s successful bid for the presidency, within weeks of his succession, the two alpha males were at war.
There were fierce political differences: Putin was vigorously prosecuting the Chechen war, while Berezovsky argued that a military solution was not possible and openly called for peace talks. They also had very different visions for the future of Russia: Berezovsky advocated a liberal, economic, pro-Western approach that would have kept the oligarchs and himself at the centre of power and with access to contracts. Putin preferred a central role for the state. He was more interested in modernizing Russia than in democratizing it. ‘The stronger the state, the freer the individual,’ he wrote in an open letter to the Russian people before becoming President.
From the moment Putin became President, Berezovsky embarked on a series of politically reckless acts. Such bravado was typical of the man but it was also his undoing. When Gusinsky was arrested, Berezovsky was shocked. He had not expected Putin to go so far. Two weeks later a furious Berezovsky fired off an open letter attacking what he saw as Putin’s authoritarism. This was triggered, too, by Putin’s intention to exert greater central control over Russia’s regional authorities. Quoting Aristotle and the Russian poet Osip Mandelstam, who had died in one of Stalin’s gulags, the letter was the first public declaration of their emerging differences. Berezovsky was even more outspoken in a television interview on ORT: ‘All the decrees, all the laws proposed by Putin are directed at again enslaving people.’
Berezovsky was incensed by the way that Gusinsky had been forced to sell up and go into exile. Although the media baron was a former rival, and the two had become bitter opponents, Gusinsky’s fate intensified Berezovsky’s deepening doubts about Putin. In interviews he denounced Putin and compared his policy of centralizing state power to the human rights abuses of Chile’s General Pinochet. The next month he resigned his seat in the Duma, thereby losing his immunity from prosecution. He had been elected only six months earlier. ‘I do not want to take part in this spectacle,’ he said. ‘I do not want to participate in Russia’s collapse and the establishment of an authoritarian regime.’22 He also declared that he intended to create a new opposition party to take on Putin directly.
A fired-up Berezovsky dismissed dire warnings from his inner circle. His old friend Alex Goldfarb told him, ‘Boris, if you go down this road, I predict in a year’s time you will be an exile…or worse, sitting in jail…For Putin, the substance does not matter - as long as he sees you as one of his gang. But if you go against him publicly, you will cast yourself out of his pack.’23
The feud finally reached a critical state over the way Berezovsky used his media empire. In 1994 Berezovsky, in partnership with Badri Patarkatsishvili, had been awarded a 49 per cent stake in the television station ORT, broadcaster of Channel One. Under Patarkatsishvili’s leadership, ORT was instrumental in the campaign that saw Yeltsin re-elected in 1996, and the company was handsomely rewarded. By late 1998, Berezovsky and Patarkatsishvili had increased their holdings in ORT. Channel One, the nation’s most popular television station, has an audience coverage of 98 per cent across Russia. As well as ORT, Berezovsky also owned the major weekly business newspaper Kommersant and the popular daily Nezavisimaya Gazeta. By 2000, he was, with Gusinsky, one of Russia’s most powerful media tycoons.
Patarkatsishvili was Berezovsky’s