erezovskiy's Financial Dealings Examined.
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Moskovskiy Komsomolets An international scandal is brewing in Switzerland. Once again the "hero" of the commotion is Boris Berezovskiy, deputy secretary of the Security Council of the Russian Federation. Western mass media maintain that Russia's largest airline, Aeroflot, controlled by Berezovskiy, has been funneling a considerable part of its funds to the Swiss company Andava. Which, naturally, also is owned by Boris Abramovich. The money the RF Security Council's deputy secretary has "floated" through Andava is estimated in the West at $98 million... Interestingly, recently Berezovskiy sent the Russian tax agencies his income declaration. According to which this bureaucrat earned R2.535 billion in 1996. Of this: R6 million at the Institute of Management, R2.6 million at the President's Administration of affairs, and R8.7 million at the Academy of Sciences Administration of Affairs. The rest of Berezovskiy's earnings (approximately R1 billion) came from LogoVAZ, the All-Russia Automotive Alliance, and securities he owns. No Swiss companies were discovered in Berezovskiy's declaration. Which, you would agree, suggests certain thoughts on the subject of the bureaucrat's sincerity when dealing with national tax agencies... Today Moskovskiy Komsomolets will acquaint its readers with the details of the scandal brewing abroad. The deputy secretary of the Russian Security Council is known in Switzerland not just from the mass media. For instance, his older daughter from his first marriage works in the Zurich branch of the famous auction company Christie's, and the youngest one was just recently born in Lausanne, where she lives with her mother away from the unpredictable everyday life of Russia. Boris Berezovskiy's new family did not settle on Lake Le Mans shores by accident. His name had been figuring for several years in the Trade Registry of the Vaud canton, and in the company of extremely respectable people. Until recently the Russian Security Council deputy secretary's partner was the solid family-owned transnational firm Andre & Co., specializing in grain trading on a global scale, which long ago established itself in our country... [end introduction] In 1992 Berezovskiy managed to befriend Alain Meyor, the head of Andre's representation in East Europe. With the help of this man, Boris Abramovich began to build his Lausanne "base." For starters, the Foruss Servis trading firm was registered in the Vaud canton, specializing, as can be derived from the name, in services for Russians abroad. (It should be noted that Switzerland's main attraction, in the eyes of the rest of the world, is this country's financial system. And first of all the well-oiled mechanism of managing capital permitting people to make money, one may say, out of thin air.) Initially, Foruss Servis was created with the goal of floating the money the Russian company LogoVAZ earned in proceeds from car sales. A little later the service provider company acquired a "sister", the firm called Foruss Leasing, which leased cars, machine tools, and industrial equipment. In all these operations Berezovskiy had a very reliable partner, LogoVAZ director Nikolay Glushkov. According to the Lausanne weekly Ebdo report (based on a foreign police force report), in 1992 Glushkov was charged with embezzlement of state property, but in some mysterious way it had no effect on his career.
The police report reveals the mechanism of LogoVAZ's fast fortune: It was in this combination that Foruss Servis served as a source of the bulk of Berezovskiy's profit. Actually, according to Andre representatives, they did not see anything untoward in this. From their standpoint the entire operation represented a quite normal financial scheme. At least, until a certain point in time... In 1994 Berezovskiy and Glushkov, on the one hand, and Andre on the other, cofounded one more joint-stock company. It was named Andava, and the stockholders contributed equal shares to its charter capital, a total of 200,000 Swiss francs. The new company officially declared as its goal the "facilitation of trade or financial operations." No specifics were given, it envisaged the broadest possible field of activities. Jumping ahead, let us say that over two years Andava's capital grew to 2.5 million francs. And that this money fell into its lap out of the sky. In the most literal sense... The point is that in November 1995 Boris Berezovskiy managed to put his friend and companion Glushkov on the board of directors of the Aeroflot company. One of Glushkov's first deeds after becoming the airline's deputy general director for finance (!) was to launch the same mechanisms earlier fine-tuned at LogoVAZ. In May 1996, Aeroflot's general director issued a directive prescribing that Aeroflot's 152 representations abroad transfer 80 percent of their income to the Lausanne company's account. According to foreign police, the total sum of Aeroflot's money going through Andava amounted to approximately 150 million Swiss francs. Or $98 million. The idea Boris Berezovskiy successfully implemented was simple to the point of being genius. Andava, which possessed extremely modest capital, extracted mind-boggling profits from managing others' money. If you ask any financier, he will tell you that a well-invested million can bring in twice as much in one year. That Andava invested its money well is not in doubt. There was one small problem, however: The entire profit went (and continues to go) not to Aeroflot, 51 percent of whose stock is owned by the Russian state. The money goes to the Andava owners (including some top officials of our airline). Judging by all the signs, Russia's tax agencies know nothing of this income... The police report quoted by Ebdo mentions other questionable operations by Berezovskiy and company. For instance, last year Aeroflot transferred through Andava 20 million Swiss francs to a certain Moscow advertising agency. Another 10 million was transferred to the account of an American company selling spare parts for cars. Let us note that the latter is owned by two former Soviet citizens. The police report maintains that they have been tasked with managing Aeroflot's operations in the United States. On what grounds? Why? One can only guess... What happened next was bound to happen. All these Berezovskiy operations caused concern among Andre's owners. You would agree: It is one thing when a private company's income is "floated," and quite another when it is a company whose controlling interest is owned by a foreign state. In short, when Andava's capital grew to 2.5 million francs, the Lausanne corporation refused to increase its share. Apparently the Swiss decided that they would be better off getting out of this situation by paying the compensation and not continuing to participate in a questionable affair. "Neither the surplus value of our operations nor the profits justified a continuation of these activities," said Andre's general secretary Yves Quande. On 10 January 1997 two Andre representatives officially formalized their withdrawal from Andava's board of directors. An announcement was made in the Swiss mass media about the sale of stock previously owned by Andre. It can only be sold, however, after the general stockholders meeting that will approve the company management's annual report. It should be said, however, that Alain Meyor made a choice in favor of his Russian partners, having retained his seat on Andava's board. Explaining the reason for this decision to journalists, Meyor said that Russia "has huge potential, although it is not easy to conduct business in this country." Therefore, maintaining a close relationship with a man close to the President is not just a trump card, it is the key to all doors. "In less than a half-hour he (Berezovskiy) can arrange a meeting with anyone," says Andre's former director. This statement of Meyor attracted William Ferrero, an experienced and prominent specialist in international finance. In the past Ferrero worked in Volvo Finance; he is currently Andava's general director... Having assumed the office of deputy secretary of the RF Security Council, the entrepreneur Boris Berezovskiy was obliged to withdraw from the private enterprise system. Including leaving his Lausanne companies. This required practically no effort on Berezovskiy's part: According to the law, he could even do it by mail. And if Berezovskiy does not trust the postal services, he had an excellent opportunity to do this in person, when at the beginning of December 1996 he accompanied Viktor Chernomyrdin, prime minister of the Government of Russia, during the latter's working visit to Switzerland. Berezovskiy stepped down as member of Andava's board of directors only at the end of last year. No changes have been noted in the composition of both Foruss companies. In conclusion, let me say that the Moscow correspondent of the solid Neues Zuricher Zeitung studied Boris Berezovskiy's life and career for a long time, and came to an interesting conclusion: "This is a man who, as no one else, represents a typical Moscow wheeler-dealer." "In Russian-style capitalism, the battle is conducted in bullet-proof vests," the journalist writes. "Over eight years Berezovskiy has managed to put together a fortune on the margins of legality, and today it is very difficult to determine which part of the money should be attributed to dark criminal energy, and which, to the current economic conditions in Russia..." In Place of an AfterwordWhose Security Is Boris Berezovskiy Watching Out For? The Moskovskiy Komsomolets editor turned for comment on this explosive material to an experienced specialist, KGB Colonel Igor Malkov, who has been dealing for a long time with issues of our country's economic security. "The security of capital turnover is a necessary condition of successful entrepreneurship. In private companies this task is accomplished by security services. The core of such services are not security guards, as it may appear to the uninformed eye it is specialists in the area of economics and law, in the area of organizing information collection and processing, intelligence and counterintelligence. These services engage in the collection of information on the competition and partners, capital movements in markets and the state of the market, and carefully check and analyze the information obtained. "In addition, these information units engage in disinformation of rivals and protection of commercial interests. "An entrepreneur, especially a major one, will give anything to be in the know regarding economic, social, financial, and other decisions being planned by the state. And it is not accidental that commercial structures today spend enormous sums to bribe state functionaries. "The case of Boris Berezovskiy is simply unique. As a minimum, this man should have made the Guinness Book of Records twice. The first time when he was appointed to a high government office while being a citizen of another country. You see, being an Israeli citizen, he, by Israeli law, was obligated to expend every effort to strengthen the security and national interests of that country. That is, to work for the benefit of Israel. "I want to emphasize that this is an inviolable rule, because otherwise Berezovskiy would run into major problems on all fronts. The Jewish clan of businessmen all over the world is penetrated by Mossad (Israeli intelligence) agents, representatives of the special services of any country will tell you this. "Top secret information of a political and economic nature and operational reports on the activities of political leaders and major entrepreneurs go through the Security Council of Russia, which drafts long-range and tactical plans on the state's domestic and foreign policy. Every entrepreneur and banker who has reached a certain level of financial activity dreams of possessing such information firsthand. Information has become a weapon that produces and protects capital better than a team of zombie skinheads armed with Kalashnikovs. "And now look at what issues Berezovskiy supervises in the Security Council! His travel routes strangely coincide with the routes of Russian oil pipelines in the Caucasus and near abroad, where he finds business confederates... "Berezovskiy's demonstrative step of withdrawing from managing his capital in Russia after his appointment to the Security Council turned out to be a populist move. He still personally runs all the chief profitable enterprises abroad, which comprise the bulk of his capital. And the Russian ones, from which he ostensibly has withdrawn, obediently carry out his will in moving money. "There is another important nuance in Berezovskiy's activities. The information is floating around government corridors that Boris Berezovskiy today has become the chief cash disburser, sponsor, and financial director of Yeltsin's tightly knit family. People in the White House no longer whisper about this, they say it out loud. Anyone with even minimal access to the power Olympus will tell you that if you wish to fall into disfavor, just say a few unkind words about Berezovskiy in the presence of Tatyana Dyachenko. "Boris Abramovich is gathering strength. I am convinced that the scandal flaring up around him in Switzerland will not affect this man's career in the least. Unfortunately..." 
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