‘But you were the financial backer – you held the controlling interest in Moscow 100, didn’t you?’
‘Except that, one by one, I lost my board and control of that entity. It was eventually neutered – rendered inoperable.’
‘How come? As the principle backer, with the reduced board, corporate and voting control would collapse back on to you, surely?’
Obrenovich shrugged with a world-weary sigh. ‘Voting, schmot-ing,’ he said. ‘This is not some cosy little Anglo-Saxon jurisdiction, colonel. In Russia, corporate power pales in the face of krysha.’
Straker frowned. ‘Sorry, what?’
‘Protection money,’ said San Marino. ‘Tribute … extortion … organized crime.’
Straker's eyes widened, not just at the subject being raised, but that San Marino should already know about this.
Sounding weary, Obrenovich added: ‘The Russian economy is like no other. You are no doubt aware of the privatization “process” which occurred under Yeltsin?’
Straker nodded: ‘The kleptocracy and the emergence of the oligarchs.’
‘Whatever the shortcomings of that stage in the transition, from the old to the new Russia, the thefts from the system were barely half of the ongoing problem for the emergent Russia. The resultant oligarchs became extremely powerful. But they owed their positions entirely to the corruption in local, regional and national government. Consequently, they had no reason to change the nature of the culture that had gained them their assets in the first place. It was in the oligarchs’ interests to preserve that corruption, throughout all levels of State administration.’
‘Weren’t you one of them?’ Straker asked.
‘Don’t believe everything you have read about me, colonel. Far more significantly, the result of this corruption in government is that Russia has not developed an impartial civil service in the way that settled regimes have done in the West. Russia's administrative machine, if we could call it that, is not that at all. Russian governance is controlled by corrupt officials. Immediately after the collapse of communism, the economy was in such a fragile state that an administrative vacuum developed. Anarchy could have so easily ensued. Instead, a consolidation took place. In the same way that companies hived off by the State were consolidated by the oligarchs within their different economic sectors, so another “organization” consolidated in the same way – but this one happened to be operating within all the strata and regions of corrupt government.
‘Officially, the KGB – the secret intelligence service of the Soviet Union – was disbanded in 1991. Succeeding it – in the post-communist era – was the FSB. For the first few years, the FSB was trying to find its feet, its role. That was until 1999 when an unknown former lieutenant colonel in the KGB – and a favourite of President Yeltsin's – was put in as head of it: one Vladimir Putin. Later in 1999 Yeltsin moved Putin on, making him prime minister, so he wasn’t at the FSB for long – but it proved long enough. Putin had used his short time in that position to insert hundreds of siloviki – former KGB agents with an intelligence or military background – into countless government posts: governorships of provinces, cities, even state-owned companies. Via this network of FSBers, a consolidation occurred comprehensively – at all levels – all over Russia.
‘Today, fifteen years on, that consolidation is truly breathtaking. One individual has succeeded in drawing together all of what government machinery there was, pretty much under his own personal control. But, whereas the KGB had been an arm of the Communist Party and supposedly answerable to a clear ideology, the FSB is completely free from any such political control or restraint. At best, the organization is amoral – driven entirely by the goals of keeping itself in power and enriching its members – at worst, it is barely distinguishable from an organized crime family. The man who masterminded that consolidation, and who heads the FSB today, is the most powerful man in Russia.’
‘So a kind of mafia don?’ offered Straker.
Obrenovich smiled condescendingly. ‘Vadim Kondratiev is no mafioso. His organization outstrips Lucky Luciano's Commission of 1930s America, because it has more cohesion than a federal pact between equal members. Kondratiev's power is as omnipotent as Carlo Gambino's was as boss of bosses of New York in the 1960s and 70s, except Kondratiev doesn’t just control one city – Kondratiev's reach is national. His influence is far more the impregnable position that J. Edgar Hoover established for himself as the director of the FBI in the US, having a quasi-blackmailing hold over everyone and every institution of government. Vadim Kondratiev gives the impression of being Russia's chief civil servant, a government administrator. But what he heads is an utterly corrupt organization. And he's achieved the greatest licence and camouflage for a criminal one could ever imagine. He is a crime boss masquerading as a civil administrator. Nationally, he controls everything – he's a one-man Banzhaf Index: he controls every decision, all government procurement, all infrastructure spending, anything to do with government payroll – who gets hired and who gets fired – the army and intelligence services; let alone the law, the police, the courts and the judges. Indeed, today, the judicial system has become so corrupted that a state of legal nihilism exists. It is an utterly predictable despotic mindset: “For my friends, everything – for my enemies, the law,” except in Russia the “law” has been utterly perverted – it is staged entirely for show – while being completely manipulated and bent. There is, now, even the ludicrous practice of “telephone justice” – where, irrespective of the evidence presented at trial, verdicts and sentences are handed down directly from the Kremlin.’
Straker was staggered by Obrenovich's revelations. ‘How the hell haven’t we heard of this man in the West?’
‘Because Vadim Kondratiev uses the presidency and the Kremlin as his cloak. He has effectively bought their cooperation. Let me tell you how. Through Kondratiev, President Putin was rumoured to be the richest man in Europe, owning double-digit stakes in Surgutneftegas, Gazprom and a Swiss-based oil trader, Russoil. At the time he left office, those stakes were valued at more than $40 billion. And this is where Kondratiev comes in. The critical thing any despotic leader needs before he can ever leave office is an assurance that he will be free from prosecution and that the possessions he has acquired while in office are legitimized. Kondratiev is able to guarantee both those things; that was how Putin had the confidence to retire when he did at the end of last year. Very much part of that deal, though, was that Putin had to accept and endorse Tarkovsky as Kondratiev's choice as his successor for president. The whole succession, therefore, was a stitch-up. Kondratiev has brought the presidency and the Kremlin completely under his personal control. And both institutions are used to conceal his presence.’
‘How does he get away with all this?’ asked San Marino.
‘By the threats of krysha,’ said Obrenovich with a sigh, ‘which he applies with ruthless intimidation and violence.
‘Krysha, colonel, is a particular brand of Russian social cancer. It's a form of protection racket: a kind of extortion. It describes the process of extorting money from any entity in Russia. Today, 80 per cent of businesses in Russia are forced to pay it – or they suffer violent consequences.
‘And to your point about being unknown in the West, it doesn’t hurt that – via krysha – Kondratiev controls the media, too. This was started by Putin. One of Putin's first acts as president in 2000 was to shut down NTV, the only independent TV station in Russia: it had dared to be critical of the Second Chechen War and Putin himself. It was soon raided by “tax inspectors”, of course, and shortly afterwards forcibly taken over by Gazprom, a pro-Kremlin organization. Putin then brought in “broadcast guidelines” for all media, all of which are still enforced today by Tarkovsky: under these, the State does not tolerate any investigation of corruption or abuses by top officials; it has instituted a “blacklist” preventing opposition politicians and entities from appearing on air; and there is even a ban on satirical programmes making fun of government figures. The State casts a culture of fear and control, particularly over the television companies. It's because of Kondratiev's grip on Russia's television and newspapers that I needed to invest such huge sums of money in social media campaigns.
‘Everything in Russia is said to be under “State” control; but it is, in effect, under the control of this man, Vadim Kondratiev. No one dares to speak out against him or the regime.’
‘So what was the krysha reference you made, then, in connection with your control of Moscow 100?’
Obrenovich replied: ‘Kondratiev was behind the Winter Olympics in Sochi, as well as the Russian Grand Prix going there too. It is rumoured that he had, personally, acquired all the land around the venue. He apparently pressured the banks to lend to the development vehicles, which, of course, he also controls. Then he took backhanders from all the contractors and suppliers. The scale of this made his interest in the Games substantial: if the Sochi Olympics cost $51 billion, and he managed to skim off just 1 per cent, we’re talking about half a billion dollars going into his pocket. The reality was probably far closer to 10 per cent.’
Straker said: ‘So Kondratiev was smarting because of the money he was going to lose by the Grand Prix moving away from Sochi?’
‘Not entirely. For him, the money – which wouldn’t have been anywhere near as substantial – wasn’t the full issue with the race going to Moscow.’
‘No?’
Obrenovich shook his head. ‘It became much more significant than money. What actually mattered was the prospect of the Grand Prix going anywhere else. For the first time since Kondratiev had come to “power”, he had lost something far more costly. He had lost face within Russia. Losing the Grand Prix from under his control in Sochi was the first time since Kondratiev's rise that anyone had stood up to him.’
‘So it was Kondratiev who made these krysha threats against you and the Moscow 100 venture?’
‘All the way through the project.’
Straker turned to San Marino: ‘Did you – the FIA – know about these power plays in Russia before the Grand Prix was awarded to Sochi, or even before it was switched to Moscow?’
San Marino was about to answer when Obrenovich said: ‘No, he didn’t.’
‘I don’t know whose integrity or diligence is impugned by that omission,’ Straker retorted. ‘The risks of these Grands Prix in Russia were not fully understood. Someone should have known. But you’ve still not closed the gap, Mr Obrenovich, between the snub of Kondratiev losing a Grand Prix – and a sabotaged race track with thirty-four dead spectators?’
The Russian answered: ‘Kondratiev's mob moved, wholesale, against the Zhar-ptitsa Autodrom. As you have said, all the board members of Moscow 100 were threatened and removed.’
‘So the president's interference in the management of the Russian Automobile Federation – and the removal of Olyshenko – was a separate incident to this?’
Obrenovich shook his head. ‘Absolutely not; all of those actions were instigated by Kondratiev. No one can govern in Russia, at any level of government, without Kondratiev. The president has to do whatever Kondratiev tells him.’
‘And the deaths of Olyshenko and Rosenthal?’
‘I would only be speculating.’
Straker looked aghast as the implications became clear.
