Bill Powell

Stories by Bill Powell

  • A Troubled Investment

    Dr. Frankenstein, meet president Putin. Boris Berezovsky was one of the men who helped put Vladimir Putin where he is today--sitting in the Kremlin as Boris Yeltsin's successor. Now, Berezovsky is recoiling in fear at what he helped create. In the autumn of last year, the then President Yeltsin, his immediate family and the so-called oligarchs--business cronies who, like Berezovsky, got rich after the collapse of the Soviet Union--feared for the future. Yeltsin's term was running out, and a left-leaning, anti-oligarch opposition was coalescing under former prime minister Yevgeny Primakov. Last summer Yeltsin's inner circle, known as "The Family," seized on Putin, then the largely unknown head of the Federal Security Service (a successor to the KGB), and made him prime minister. Two months ago they helped him win the presidency on the back of a popular war in Chechnya. For Berezovsky, a businessman who once said that his best investment in Russia in the 1990s was "in politics,"...
  • Following The Money

    It's a case, as one Washington lobbyist puts it, that "a lot of people in this town wish would go away." And it's not hard to see why. It involves at least three giant, politically influential American oil companies. And the leaders of an energy-rich Central Asian country, whom the Clinton administration has assiduously cultivated in an effort to wrest its oil out of Russia's orbit. And a wealthy, well-connected American middleman, James Giffen, whom the Justice Department is investigating for allegedly channeling millions of dollars from the oil companies into the private bank accounts of the most powerful men in Kazakhstan. As the investigation moves forward, it threatens to tarnish and embarrass all concerned.And moving forward it is. According to sources familiar with the case, a former or current executive of one of the oil companies named in the investigation has been cooperating with the inquiry: a "whistle-blower," as one source puts it. As previously reported in NEWSWEEK,...
  • Putting On The Squeeze

    Russia's top independent press lord didn't spend last week in Moscow's worst jail. But President Vladimir Putin may still have Media-Most chief executive Vladimir Gusinsky where he wants him. If the feud between Putin and Gusinsky is rooted in the Kremlin's desire to silence a potent critic, the vagaries of law and business in Russia give Putin a variety of ways to get what he wants.Earlier this month Gusinsky was arrested on murky accusations of embezzling $10 million in state funds from a St. Petersburg television company -- and then left to sit in squalid Butyrka jail for nearly four days before being formally charged. Now it appears that instead of persuing the embezzlement charges (which Gusinsky denies and now refuses to answer further questions about), Putin may opt for a subtler approach: a Russian-style corporate takeover.After Russia's economy crashed amid devaluation and default in 1998, a financially vulnerable Media-Most allowed a giant, state-owned company to become a...
  • The Putin Crackdown

    In the days, not so long ago, when optimism about the new Russia abounded, Vladimir Gusinsky would be compared to William Randolph Hearst. If America at the turn of the century had its robber barons and flamboyant, politically powerful press lords, then why shouldn't the new Russia? And if those men--christened the "oligarchs" after their money re-elected Boris Yeltsin in 1996--made fortunes in ways that were not quite the stuff of a Horatio Alger story, well, that would get softened in the historical rounding. Russia was steaming toward democracy and capitalism. That is what mattered.Among those who got rich after the collapse of the Soviet Union, the press lord Gusinsky was among the most public and powerful. A theatrical producer in the Soviet era, he built the only formidable independent media empire in post-Soviet Russia: a slick television network, an aggressive, news-oriented radio station, a daily paper and a weekly news magazine (published in cooperation with NEWSWEEK). He...
  • Funny Money

    Bill Clinton, on his recent visit to Moscow, paid former Russian president Boris Yeltsin a private visit that carried with it a very public message: though he may have left political life, the man who brought democracy to Russia is hardly forgotten. But as Vladimir Putin, Yeltsin's successor, is about to find out, there are other, less heroic ways in which Boris Yeltsin may be remembered. In his wake he left a tangle of alleged corruption charges. They include allegations of malfeasance at the highest levels of his Kremlin and within his own family.Those charges are not going away. NEWSWEEK has learned that law-enforcement authorities in Switzerland will soon file formal complaints --what amount to indictments in the Swiss legal system --implicating as many as 14 people in the so-called Mabetex affair. A Lugano-based construction company, Mabetex, allegedly paid kickbacks to senior Russian officials in return for lucrative contracts to refurbish buildings in Moscow owned by the...
  • Hanging By A String?

    Every Sunday evening, after Russians have returned from their dachas and are preparing to get through another week, a 15-minute satirical puppet show appears on the nation's only independent national television network. After it's over, Russia goes to sleep. Or most of it does, anyway. Vladimir Putin's Kremlin team, seething, tosses and turns. Having gotten angry, they figure out ways to get even.Two months into Putin's presidency, the freedom of speech that is one of Boris Yeltsin's historic legacies may now hang by a puppeteer's string. The show that gives Putin insomnia is "Kukly," a political satire featuring puppet likenesses of leading politicians. The British conceived of it years ago with "Spitting Image," but Russia --specifically, a writer and producer named Viktor Shenderovich --adopted it in 1994 with wickedly smart abandon. So wicked, in fact, that late last month someone in the Kremlin apparently decided enough was enough. For the first time in Russian history, a...
  • 'Family' Funny Money

    Bill Clinton, on his recent visit to Moscow, paid former Russian president Boris Yeltsin a private visit that carried with it a very public message: though Yeltsin may have left political life, the man who brought democracy to Russia is hardly forgotten. But as Vladimir Putin, Yeltsin's successor, is about to find out in a painful way, there are other, less heroic ways in which Yeltsin may be remembered. In his wake he left a tangle of alleged corruption charges. They include allegations of malfeasance at the highest levels of his Kremlin, and within his own family.Those charges are not going away. NEWSWEEK has learned that law-enforcement authorities in Switzerland will soon file formal complaints--what amount to indictments in the Swiss legal system--implicating up to 14 people in the so-called Mabetex affair. A Lugano-based construction company, Mabetex allegedly paid kickbacks to senior Russian officials in return for lucrative contracts to refurbish buildings in Moscow owned by...
  • The Bomb That Didn't Go Off: What Happened?

    In Ryazan, a provincial center 200 kilometers from Moscow, they call it the bomb that didn't go off. Amid Vladimir Putin's swift rise to power, it is an episode that has never been adequately explained, and most probably never will.Russia was a very tense place last September. Two apartment-block explosions in Moscow had killed about 200 people--blasts the government blamed on Chechen terrorists. In Ryazan, police and military cadets checked thousands of buildings--part of a "whirlwind antiterror" operation launched in response to the bombs.Then, on Sept. 22, came the bewildering episode that frightened the 250 residents of a 12-story apartment building on Novosyolov Street. Just after 9 in the evening, a white Zhiguli pulled up next to the building. Alexei Kartofelnikov, a bus driver, was returning home when he noticed the car backing up to the cellar door. A woman of Slavic appearance whom Kartofelnikov did not recognize stood by the front door, looking around. What aroused...
  • The Man Who Would Be Tsar

    It is the winter of 1999. Boris Yeltsin, aging and ill, decides he has had enough. He and his family are hounded by allegations of corruption; his country, in the midst of a disastrous economic decline, is at war again in Chechnya. On the eve of the new millennium, he suddenly resigns. His replacement is a tough, faceless KGB apparatchik about whom almost nothing is known. Nothing--except, it would soon emerge, that he reveres the KGB, never resigned from the Communist Party, believes that snitches in the Soviet era were patriots and says a strong state is in Russia's "genetic code." Shortly after taking over, a Russian journalist is arrested in Chechnya for reporting bad news about the war, and the new president calls him "a traitor."Four years ago, just after the last Russian presidential election, no one would have believed it. Back then, a scenario like the one that has recently unfolded in Moscow would have sounded like the first chapter of a Frederick Forsyth thriller, not the...
  • Russia's Mystery Man

    On the eve of orthodox Christmas last week, the man who spent 16 years in the KGB serving the greater glory of communism attended services at the Church of the Holy Trinity in southern Moscow. Ever since he rescued his two daughters from a burning dacha outside St. Petersburg three years ago, Vladimir Putin's friends say, he has become an increasingly religious man. Attending a Christmas service was no act for the cameras. But the church was carefully selected nonetheless. In the early 19th century Mikhail Kutuzov, the Russian general immortalized in Tolstoy's "War and Peace," who drove Napoleon out of Moscow and then beat him all the way back to Paris, used to go to mass there. To this day schoolchildren in Russia learn about how the great general restored a defeated empire's dignity and pride.The symbolism of that church was not lost to anyone paying attention in Russia. The country is once again in dire need of restoration. And last week Putin, the new acting president and the...
  • Moscow's Man To Watch

    Two weeks ago, on the night before Russia's parliamentary elections, Prime Minister Vladimir Putin visited the headquarters of the FSB, one of the successor agencies to the KGB, at its building on what used to be called Dzerzhinsky Square. Feliks Dzerzhinsky founded the secret police in 1917, and Putin, a longtime member of the security apparat, was there to celebrate the anniversary with his former colleagues. FSB officers were more than glad to have him. "Finally," a partygoer said, "one of us is going to be president."The central question about Boris Yeltsin's chosen successor is straightforward: Is Vladimir Putin at heart a democrat, a trustworthy custodian of Russia's newly won civil liberties? Or is he what Russians call a "Chekist," a true believer in the ways of the secret police? His first test comes right away: running for the presidency while acting as interim president. "He will be responsible for preserving the constitutional system, as well as being a candidate within...
  • The End Of An Era

    Even at the end, his flair for the dramatic was undiminished. The world was counting down the hours to a new millennium. On Friday morning in Moscow, a gentle snow was falling and, like everywhere else in the world, celebrations large and small were about to begin. If ever there was an out-with-the-old, in-with-the-new moment waiting to be seized, it was Dec. 31, 1999. Boris Nikolayevich Yeltsin did not let it pass. Early that morning he dispatched a close and loyal aide to the state-run television network, bearing an enormous surprise. Valentin Yumashev told the network's officials that instead of the president's usual New Year's address, which normally airs just before midnight each Dec. 31, they should broadcast at noon a videotape that he then handed over.In it, Yeltsin sat before a brightly decorated Christmas tree. Speaking slowly and with an unmistakable air of sadness, the Russian president began: "Friends, dear ones, today I am wishing you New Year's greetings for the last...
  • Boris To Bill: Butt Out

    Bill Clinton tried conjuring up the Boris Yeltsin of old last week, the one who eight years ago stood defiantly on a tank and saved Russia's fledgling democracy. "One of the most thrilling experiences of my life, as a citizen of the world, was when you stood up on the tank in Moscow," Clinton told Yeltsin, at an Istanbul summit of 54 nations. "If they had put you in jail instead of electing you president, I would have hoped that every leader of every country around this table would have stood up for you and not said, 'Well, that is an internal Russian affair'." The point to all this tear-jerking rhetoric: Russia, thinks Clinton, should heed U.S. objections to Yeltsin's nasty war in the breakaway region of Chechnya.The Boris Yeltsin of 1999, sitting across the room from Clinton, was decidedly unmoved by the president's little speech. "You have no right to criticize Russia for Chechnya," Yeltsin had declared at the summit. "There will be no negotiations with bandits and murderers."...
  • The Trail Of The Bull Of Krasnoyarsk

    The running of the bull had lasted six months, and at the end one of Russia's most wanted men was traveling light. Instead of his usual retinue of gun-toting bodyguards, he had with him just a shaving kit and a driver as he sat in the back of a Mercedes and tried, unsuccessfully, to slip across the Hungarian border from the former Yugoslavia on Oct. 29. Anatoly Petrovich Bykov, law enforcement officials say, had been in and out of Montenegro for six months since fleeing Russia before Moscow issued a warrant for his arrest. He had been in the United States at least once, Russian and U.S. officials believe, travelling on a Greek passport; but despite an alert at all U.S. airports and border crossings, had managed to get out unnoticed.Wanted for questioning about money laundering and accomplice-to-murder charges, the 39-year-old "businessman" had, according to one Russian press report, been staying in a villa once owned by Tito. Then on Friday, October 29, for reasons that are not yet...
  • Behind Closed Doors

    This week, in one of the exquisite ironies of the year, the G8 ministerial meeting of top law-enforcement officials will be held, of all places, in Moscow. U.S. Attorney General Janet Reno and her fellow Justice ministers will have a lot to talk about with their Russian colleague Vladimir Rushailo, as well as Prime Minister Vladimir Putin. Money-laundering will certainly be among them. But privately, G7 leaders are also increasingly dismayed by Russia's current campaign in Chechnya. During the last Chechen war, Bill Clinton defended Boris Yeltsin, comparing him to Abraham Lincoln, the president who presided over the U.S. Civil War. There are no such comparisons being made now. Instead, behind closed doors, the ministers are likely to be asking their hosts some pointed questions:You have said the war was launched in response to alleged terrorist acts in Moscow and elsewhere. How can the current military tactics--including the apparent indiscriminate bombing of civilians--be...
  • A Scheme Of Beauty

    Felipe Turover is not the kind of guy a prosecutor usually wants as a star witness. Handsome, slick, the bearer of two passports (Israel and Spain) and rumored to have been linked to the KGB, the Russian emigre was a freelance debt collector, trying to track down money the Soviet Union owed to Westerners. But it was Turover who, nursing a grudge against a former friend, knocked on the door of the Swiss General Federal Prosecutor Carla del Ponte more than a year ago and said, in effect: have I got a story for you.As first reported in Italy's daily Corriere della Sera, Turover told Del Ponte about Mabetex, a Swiss construction company based in Lugano. Turover said Mabetex had paid bribes to high-ranking Kremlin officials in return for a huge contract to restore the Kremlin itself and other Moscow sites. Mabetex, owned by an Albanian Kosovar businessman named Behgjet Pacolli, won the contract in 1994-1995. The circumstances are now the subject of an ongoing Russian-Swiss investigation...
  • Russia?S War Hits Home

    Yekaterina Chaborina, a retired 71-year-old widow, had trouble sleeping last Monday night. At around 4 in the morning, she was puttering around her small apartment in a neighborhood south of central Moscow. Then there was a noise unlike any she had ever heard, a deafening thunderclap that blew out the windows in her apartment and knocked her to the floor. Dazed, she gathered herself and raced to see what had happened. Next door, where an eight-story concrete apartment building stood just an instant earlier, there was now just a huge smoldering pile of ash and rubble. "And not even that much rubble," she said later. "I lived through [World War II] and the Nazi invasion," Chaborina recalled as she placed a note of remembrance at a makeshift memorial at the site where 119 of her neighbors were killed, "but I have never seen anything like this."Russia's latest war has hit home, with a ferocity that has stunned and frightened the citizens of both the capital and its far-flung regions. It...
  • Missing The Big Story

    After eight years of economic plunder and pillage, of corruption, currency devaluations and constant, unending capital flight, the Russian press has decided it has finally had enough. It's mad as hell, and is not going to take it anymore.Had enough, that is, of the "Western" press--NEWSWEEK included--for reporting alleged money-laundering schemes in which billions of dollars poured through (to take one prominent example) the Bank of New York in just a few months. And it's mad as hell at certain Republican Party candidates for president in the United States for... well, if not quite making up all this stuff up about money-laundering, then for talking about it in public. Apparently gentlemen politicians in Russia don't stoop to such things.For the last two weeks, the debilitating effects of a media establishment now completely owned by the Russian government and a handful of plutocrats has been on full view. And what a depressing view it was. With remarkably few exceptions, the...
  • A Half Century Of Nuclear Blasts

    Gulmira Azhakhmedova remembers the day almost 20 years ago when the authorities in her riverside village of Seitovka, just outside Astrakhan in southern Russia, told her to remove all the dishes from her shelves and go stand outside. She remembers how the ground shook and cracked underneath her feet. That was the first explosion, in 1980, "and no one knew what was happening then." But the blasts continued for four years--15 in all--"and by the end we all knew what was going on," she says.The government called it Project Vega. The idea was to create giant cavities in the ground where Gazprom, the state-owned gas company, could store huge quantities of the raw materials needed for an enormous condensate plant that was soon to be constructed. At the insistence of the Russian military, they found an atypical way to do it: by detonating nuclear bombs.Events like that are more vivid in people's memories than ever: Aug. 29 marked the 50th anniversary of the first successful test of a...
  • From Spy To Prime Minister

    Russia's prime minister-designate seems straight out of Central Casting: the prototypical faceless KGB man. After Boris Yeltsin promoted him last week--and anointed him his likely successor--Vladimir Putin gave a performance that at times bordered on parody. At a televised meeting in Yeltsin's office, the president asked him what sort of mood he was in. Putin's terse reply: "Combative." Whether he meant toward Muslim separatists in Dagestan or likely presidential candidate--and Moscow mayor--Yuri Luzhkov was not clear. Presumably, Yeltsin hoped both.Then, in a half-hour TV interview, the host asked an unsmiling Putin whether he had what it takes to go from utter anonymity to Russia's presidency in a year's time. The less-than-inspiring answer: "It would be odd if I replied that I was not ready if the president said I was." Struggling mightily to put a human face on the acting prime minister, the interviewer asked about his favorite sports. "Fighting," the ex-spook replied, "and judo...
  • Masters Of The Kremlin

    For almost his entire tenure as president of Russia, Boris Yeltsin has relied on no one more than Anatoly Chubais. Campaign manager; economic czar; counselor behind the scenes. But early last Monday morning, Chubais could not get in to see Boris Yeltsin, even though he had a scheduled appointment. Other members of Yeltsin's tight circle of advisers had schemed to keep him out. The reason? Chubais wanted to prevent the ailing Russian president, who has fired four prime ministers in the last two years, from dismissing yet another. Especially as Russia was about to get sucked into another internal war with Muslim separatists, this time in Dagestan, a region that borders Chechnya. "I thought it would be disastrous," Chubais later told a friend.His efforts were fruitless. Yeltsin's victim this time was the inoffensive Sergei Stepashin, who had been prime minister for just three months. His replacement: Vladimir Putin, an anonymous bureaucrat who has spent most of his professional life in...
  • A Long, Hot And Sweaty Summer For 'The Family'

    ltsin is in what is supposed to be his last year in office, and it's likely that he's beginning to feel very lonely. It's August, he's at work and virtually everyone else in Moscow is on vacation. But the isolation Russia's president must feel as he pads around the Kremlin looking for things to do isn't only personal. It's political too. Opponents and rivals--including Moscow Mayor Yuri Luzhkov and former prime minister Yevgeny Primakov--are putting together potentially powerful alliances in advance of this December's parliamentary elections. And if that's not vexing enough for the ailing president and his tight circle of advisers--known in Moscow as "The Family''--there are also the Swiss to worry about. ...
  • A Russian Media Mystery

    In Boris Yeltsin's post-communist Russia, there is nothing that is not for sale, but the most valuable commodity of all is influence. Boris Berezovsky, Russia's uber-oligarch, has always known that better than most. Now, just one year from the next presidential election, he is trying to ensure that his influence extends beyond the Yeltsin era. "Let's not be hypocritical," Berezovsky said in a newspaper interview on June 11. "Information is about politics; and politics is a huge part of today's Russian reality."Three days after the interview there was a reality shift. The country's best and most influential print-media property, Kommersant Publishing--whose flagship daily newspaper is a must-read for Russia's elite--changed hands. The question of the moment in Moscow: who bought it? The answer is surrounded by controversy, and is anything but trivial. Who controls Russia's media will help determine the outcome of December's parliamentary elections and next year's presidential race.In...
  • The Russian Army's Ominous 'Mistake'

    Russia's historic, painful and accelerating decline may have reached a troubling milestone last week. When a column of Moscow's troops rolled into Yugoslavia on Friday, nearly everyone was surprised. Hours earlier, U.S. Deputy Secretary of State Strobe Talbott had been assured that Russian peacekeepers would not go in before NATO's. Russian Foreign Minister Igor Ivanov called the deployment a "mistake" and said it would be reversed (though by late Saturday night, it hadn't been). Amid all the confusion and concern, one question stood out ominously: what did President Boris Yeltsin know, and when did he know it? ...
  • So Who Needs Russia, Anyway?

    The Russians decided to send their peacekeeping troops in early to Yugoslavia last Friday, forcing Strobe Talbott, the startled American deputy secretary of State, to turn his Brussels-bound plane around and head back to Moscow. Talbott wanted further talks on what, exactly, Russia's role in Kosovo might be. Good luck. That role, after all, hadn't yet been agreed upon, which didn't stop Russian troops streaming from Bosnia into Serbia and then south into Kosovo. ...
  • Follow The Money

    The plot reads like source material for John le Carre. In 1990 the Soviet Union was in its death throes. Its economy was deteriorating, the trade deficit was deepening and it was increasingly unable to pay its foreign debts. On Nov. 27 that year, a Paris-based arm of the Soviet State Bank--the predecessor of Russia's current Central Bank--quietly set up an offshore company called Financial Management Co. Ltd. (FIMACO), ostensibly to help Moscow deal with its debt problems. At the same time leaders of the Communist Party of the Soviet Union--sensing that they were about to lose their 70-year grip on power--were arranging ways to channel party funds and property to secret safe havens abroad.Now the existence of the obscure, offshore shell company has exploded into a nasty scandal that taints nearly the entire Russian power structure--and may threaten the Western financial relief Moscow so desperately needs. According to documents obtained by NEWSWEEK, including an internal audit of...
  • Hiccup? Or Global Meltdown?

    PERHAPS YOU HAD TO BE AT THE epicenter to understand the force of the earthquake. In Bangkok last August, a young American, the manager of the Thailand office of a major U.S. bank, sat in his high-rise office in the city's center. Lining its walls was a row of clocks displaying the time around the globe: Tokyo, London, New York. He eyed the two that read KO SAMUI and PHUKET--tempting beach resorts an easy flight away from the urban horror Bangkok had become. Outside it was about 100 degrees, and Thailand's financial markets were melting down. ...
  • Just How Sick Is Boris?

    IT SO HAPPENS," BORIS YELTSIN SAID last month, "that winter is nearly a natural calamity in Russia. Every year it is as if it hits us like a bolt from the blue, the same problems all over again." This winter it's worse. Russia's government is bankrupt, completely dependent upon foreign aid. Its capital markets, recently among the world's most buoyant, are crumbling. Nervous about possible bank failures, Russians are beginning to dump rubles in favor of dollars. And top officials have been weakened by infighting and scandal. As the snows blanket Moscow, it is obvious that the country's stability remains unhealthily dependent upon one man. One who, it is painfully clear, may not be up to the stresses of a brutal job.For eight years, Boris Yeltsin has been an actuarial accident waiting to happen. The average life span of the Russian male is 58, and the country's president is now 66. So when he gets sick, as he did last week, everyone else gets nervous. In announcing that Yeltsin had...
  • Sober, Rested And Ready

    WHEN ANNA KOFF, A 24-year-old political-science graduate of Moscow's most prestigious university, applied for a salesclerk's position at the Moscow airport's duty-free shop in 1989, her male friends told her she was crazy. The job was clearly beneath her. But she somehow sensed, two years before the Soviet Union collapsed, that she'd be better off pushing perfume for dollars than finding a job as a politician's secretary. ""I wanted to have my own apartment and travel abroad,'' she recalls. ""I knew that more money was more freedom.'' How right she was. Today she's cool, confident and impeccably dressed for business. And she earns nearly $50,000 a year (a fortune by Russian standards) as an executive-search consultant at Korn Ferry International, a world leader in the headhunting industry. ...
  • It's Nothing But Chicken Feed

    ANATOLY CHUBAIS NEVER DREAMED that $90,000 could be so much trouble. That was how much the Russian first deputy prime minister and each of four colleagues were offered last spring to coauthor a book about privatization. During a turbulent career, Chubais has been called many things: reformer, darling of the West and Boris Yeltsin's indispensable man. But by last week, most Russians were more inclined to call him clumsy or corrupt--and maybe both. ...

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