Bill Powell

Stories by Bill Powell

  • 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. ...
  • The Game Gets Serious

    THERE THEY ALL STOOD, ON A drilling rig 110 miles off the coast of Azerbaijan, their faces smudged with crude oil: Federico Pena, the United States energy secretary; Boris Nemtsov, his counterpart from Russia; Mesut Yilmaz, the prime minister of Turkey; a gaggle of international oilmen, and their host, Heydar Aliyev, the president of Azerbaijan. For the benefit of assembled photographers, they took part in an old Azerbaijani tradition. When oil is drawn from a new well, you dab it all over your face. So last Wednesday the assembled dignitaries smiled for the cameras, they laughed and, like schoolchildren in a finger-painting class, they smeared.Even more remarkable, they refrained from throwing each other into the frigid Caspian Sea. That alone was a small victory for diplomacy, because most of the men assembled on that rig last week, for all their public joviality, are not friends. They are rivals, their interest focused on the massive oil deposits beneath and around the Caspian....
  • The Ailing Tigers Of Asia

    FOR YEARS, MALAYSIA'S PRIME minister, Mahathir Mohamad, has won votes at home by bashing foreigners. When he thought the British had insulted him, he imposed a government boycott of their goods. When the then Australian Prime Minister Paul Keating called him ""recalcitrant,'' Mahathir demanded--and got--an apology. For all of Mahathir's pompous excesses--like insisting that Malaysia build a Silicon Valley right away--no other Third World leader has done a better job of instilling national pride where there once was colonial cringe. So, earlier this summer, when overseas currency speculators assaulted Malaysia along with other Asian tiger economies, Mahathir reached, almost casually, into his old bag of tricks. He called Wall Street hedge-meister George Soros a ""moron'' and foreign traders ""wild beasts'' and ""racists . . . [who] plan to make us poor,'' adding, for good measure, ""They should be shot.'' ...
  • Moscow On The Make

    IT'S 3 A.M. ON A WARM SUMMER night, and scores of young revelers pour onto a riverbank from a clutch of neighboring nightclubs. Some of the kids are drunk; some are stoned; some flirt; some just lie back and look at the night sky. They are relaxed, casual. The setting could be any European capital. But this is a riverbank called Raushskaya, just across from Red Square, the center and soul of the city of Moscow. ...
  • Moscow, We Have A Problem

    THE THREE MEN FELT THE crash the instant it happened. ""When you get hit by 7i tons, you feel it,'' said one official at mission control - the one in Korolyov, outside Moscow. And then the crew heard it: the hiss of air escaping through a hole in the hull. Three hundred and sixty-five cubic meters of air, held under pressure in a taut aluminum skin, was seeking equilibrium with the infinite vacuum of space. The American, Michael Foale, felt the first twinges of decompression in his ears. Two hundred thirty miles from Earth, Foale and his two Russian crew mates were in a race for their lives against the laws of entropy. ...
  • Giving Up The Fight

    THERE HAD BEEN NO PAYCHECK for five months. The heat and the hot water in his army apartment outside St. Petersburg were working only a few hours a day. As October wore on, the thought that his two boys faced a cold winter infuriated Lt. Col. Yuri Khorkov. Then there was the issue of his own 42d birthday. Times for him and his fellow commanders in the St. Petersburg garrison had never been tougher, and he wanted them to forget their troubles, if only for a night. He asked his commanding officer if the army could front him 300,000 rubles--about $50--to cover expenses. The immediate reply: not a chance.The night after his birthday, Khorkov came home depressed and irritable. His wife, Natalya, told him something--a bit of news--that angered him; what exactly it was she will not say. But she will never forget his response. "I'll take care of all these problems once and for all!" And with that, Lt. Col. Yuri Khorkov walked into a bedroom, grabbed his army pistol and fired a single shot...
  • Not Just A Pretty Face

    AT THE END OF 1995 Aleksandr Lebed was a recently retired general who had decided he wanted to be president of Russia--and the sooner the better. A year later he was in precisely the same position. But Lebed didn't spend 1996 running in place. By the end of the year, he had emerged as the most popular politician in Russia, the one with the best shot at succeeding Boris Yeltsin when his current term--or his surgically repaired heart--expires. (The former will not happen until the year 2000.) Lebed's dramatic rise speaks both to his own raw political skills and to the unease that pervades Russia in the wake of the summer's tumultuous election. ...
  • Murder In Moscow

    THE HOTEL SITS ON A RIVERBANK IN Moscow about 10 minutes from the spot where Boris Yeltsin once stood defiantly upon a tank, setting in train the second Russian revolution. What that revolution has wrought is now on display, in surreal fashion, every day in the hotel's lobby. The Radisson-Slavyanskaya is a place where Wall Street financiers, Texas oilmen and Silicon Valley geeks trip over one another trying to do business in the new Russia. Bill Clinton and Al Gore, when they come to Moscow, stay there, too. There's an American-style steakhouse, a gallery of wildly expensive designer boutiques and a Western-style health club. ...
  • How To Survive In The Sour Cream Economy

    LAST WEEK IT WAS CIVILIAN DEFENSE workers and energy workers. The week before that, teachers and doctors. This week it will be pensioners and trade-union workers from across the country. They gather in front of the houses of the Russian government, carrying their signs, chanting their slogans, and then they disperse. Their cause is about as straightforward and as legitimate as it gets: they all just want to be paid. Not paid more; just paid. But the dispirited, going-through-the-motions quality to these demonstrations is unmistakable--the triumph of cynicism over outrage. This is Russia, after all. ...
  • Too Weak For Surgery?

    JUST THREE WEEKS AGO, BORIS Yeltsin and his doctors had made it sound like the arterial equivalent of a teeth cleaning. Heart-bypass operations are routine these days; men of Yeltsin's age have them all the time and come back strong. Barely acknowledged was the role of the patient's medical history in determining the surgery's outcome, and even in deciding whether to have it at all. Late last week Yeltsin's physicians admitted that their patient is a fragile specimen--and that there are great risks in the bypass surgery he needs. So great, in fact, that Yeltsin's lead surgeon conceded on Friday that surgery might not happen at all. ...
  • Germany's Disease

    THINK U.S. EXECUTIVES ARE CORPORATE "executioners" because of all the jobs they lopped off in the past year? Try Heinrich von Pierer at German giant Siemens, where 40,000 jobs have been slashed in the last decade. Or Jurgen Schrempp, the new CEO at Daimler-Benz, who's in the process of massively "downsizing" the most famous of all German companies. These days, in fact, blue-chip Germany looks like Murderers' Row: Volkswagen, Bayer, Hoescht--all have slashed tens of thousands o_GCP_jobs in recent years, and they aren't done yet. A survey re]eased last week showed that nearly every major industry in Germany expects more job losses this year. ...
  • Trouble In Another Court

    Steffi Graf has never felt pressure like this. Not at Wimbledon, where this year she won again, for the sixth time; nor at the U.S. Open, where a month ago she grittily held off the comeback of rival Monica Seles. That, after all, is tennis-court pressure. This is real-life pressure: last August, German authorities arrested her father, Peter, on suspicion of helping his daughter evade millions of Deutsche marks in taxes. A month later the family tax adviser was in jail too. Then, two weeks ago, Graf herself was questioned for eight hours in her home state of Baden-Wurttemberg, as authorities tried to determine what role, if any, she played in the alleged scheme. ...
  • Goodbye, 'Great Customer'

    You'd think that To-shihide Iguchi--whose portrait is the latest to go up in the billion-dollar wing of the rogues' gallery-wouldn't be missed on Wall Street. But you'd be wrong. Why? Because Iguchi was, as a bond trader told The Washington Post last week, "a great customer." For years he bought huge chunks of U.S. Treasury bonds on behalf of Japan's Daiwa Bank, "but he was always on the wrong side of those trades." That is the definition of a "great customer": you keep paying too much for whatever it is you're buying-and you keep returning. And Iguchi's 11-year shopping binge, and others like it, is why Japan won't be coming back for more. ...
  • Cops On The Take

    Like So Many "Businessmen" IN POST-communist Russia, Yevgeny Roitman had things going his way-for a while. At $8, police say, he had become the de facto head of organized crime in the provincial center of Tver, two hours northwest of Moscow. He allegedly ran the local rackets, extorted money from legitimate business-men-and eliminated those who wouldn't cooperate. Roitman lived in a splashy new apartment, drove an Audi sports sedan and had given his wife a gaudy gift: a brand-new red Dodge. She cruised the dreary streets of Tver as if she owned the place. And why not? Her husband seemed to have all the bases covered. Everyone in town feared him, his alleged mob ties were lucrative and he had a stable, full-time job: Roitman headed the organized-crime-fighting team of the Tver Police Department.If crime has become Russia's pre-eminent problem, its most ominous component may be the extraordinary corruption among Russian law-enforcement agencies. Outrageous tales like Yevgeny Roitman's...
  • The Innocents Of Wwii?

    You lick it, you stick it and you forget it. In most cases, a stamp is a stamp is a stamp. But when it bears the following inscription: ""Atomic bombs hasten war's end,'' under the image of a billowing mushroom cloud . . . well, that is no ordinary stamp. ...
  • A Case Of The Berlin Blues

    By the fifth anniversary of the fall of the wall -- this week, in other words -- Berlin was to be on the cusp of becoming the vibrant, rebuilt capital of an economic juggernaut. Chancellor Helmut Kohl vowed that Berlin would be the seat of government, headquarters of some of Germany's biggest corporations and a magnet for foreign companies seeking markets to the east. But in the city today there is no euphoria, and no anniversary celebration. Berlin is far from ready for prime time. ...
  • Japan: 'Alice In Wonderland.'

    No one in Japan who turned on the television could quite believe what was happening. There, live and in color, stood Tomiichi Murayama, the avuncular, heretofore irrelevant leader of the country's socialist party, accepting congratulations as the new head of government. And leading the cheers were his once and future political enemies in the Liberal Democratic Party, whose votes had just made him only the second socialist leader since World War II. It was a measure of how unhinged Japanese politics have become in the year since the LDP lost its 38-year grip on power. The head of the party that less than a year ago formally opposed the U.S.-Japan security pact and tilted openly toward North Korea is now the prime minister of Japan. "It's "Alice in Wonderland' time," said one U.S. official. ...
  • Will The World Buy Another Korean Car?

    AT ANY BUSINESS SCHOOL IN THE UNITED STATES worth its tuition payment, it would be a no-brainer. The case: a powerful international conglomerate is looking to start a new business. It's strong in electronics but not much else, and now it's thinking hard about a move into a high-profile industry. The problems: there are way too many players in the industry. (In B-school that's called a ""barrier to entry,'' and that's bad.) It's also a business that chews up capital, and it's going to cost $5 billion to get started. Worse, the home market doesn't even guarantee you a strategic base, because there are already five companies in the business. In short, the nifty new strategy seems to be the economic equivalent of jumping headfirst into a buzz saw. ...
  • Tokyo Shock: Sayonara, 'Mr. Clean'

    IN THE END, HIS GOVERNMENT LASTED just eight months. but when the time came for him Lo go, Morihiro Hosokawa showed that he was a different kind of Japanese politician after all. There were no tears in his eyes as he faced Tokyo's press corps last Friday afternoon. Unlike so many of his predecessors, Hosokawa, 56, had not spent his entire adult life clambering up the slimy pole of Japanese politics, desperate to become prime minister some day. And when financial shenanigans landed him in trouble, he did not insist, as others had before him, that he become a shadow kingmaker as the price of a ritual resignation. Pledged to reform Japan's deeply entrenched political corruption, but dogged finally by his own financial sleight of hand, Hosokawa said simply that he would live up to his public rhetoric. "The point of political reform," he said after announcing his resignation, "is that you frankly recognize your problems and disclose them. That's what will lead to public trust. It's...
  • America's Bad Example

    THE MOTIVE, APPARENTLY, WAS "carjacking"-a word that doesn't translate into Japanese because there is no such thing in Japan. Two Japanese students were shot and killed in the parking lot of a convenience store in a Los Angeles suburb. Last week police arrested two suspects, members of an L.A. gang. "It is nothing but regrettable," said Mieko Hattori. Her son Yoshihiro, a teenage Japanese exchange student, was shot to death by a homeowner in Baton Rouge, La., in 1992. ...
  • Rattling Kim's Cage

    THE GAME OF NUCLEAR CHICKEN ON the Korean peninsula seemed to go about as far as it could-and still stay just this side of war. "We may be," said one Western diplomat, "about one-and-a-half steps from disaster." Even for Korea, where hostile rhetoric and hair-trigger military standoffs have become almost routine over the past 40 years, last week's clash was unnerving. On Saturday a meeting of diplomats from North and South broke up just 45 minutes after it began, with the North's delegate threatening to turn Seoul into "a sea of fire." Seoul's response: any North Korean attack would be used as "an opportunity to reunify the Korean peninsula." ...
  • I Didn't Really Say That, Did I?

    WHEN HIROSHI KUME, JAPAN'S TOP-RATED newscaster, went on the air last Thursday night, it didn't matter that only 20,000 Japanese citizens could watch him on high-definition television sets. The picture was crystal clear. As Kume reported, a senior government bureaucrat had announced that Japan might have to abandon its version of HDTV and I adopt what will be. in less than a decade, the standard that will prevail in the rest of the world. ...
  • Is It Just Western Arrogance?

    THE CHINESE KNOW HOW TO TWIST the political knife. When China's President Jiang Zemin arrived in Seattle for the Asian-Pacific economic summit, he went straight to a reception at the Boeing Co. "This year," he told his hosts, as if they needed reminding, China "will be the company's biggest overseas customer." But China will remain a splendid source of profits for American firms only if a wrangle between America and China can be settled, soon. For the two countries are heading for a collision on the issue of Chinese human rights, and if anyone in Seattle knew a way of avoiding a wreck, they were keeping it closely guarded. ...
  • Looking Like A Leader At Last

    Summit: The Tokyo trade talks didn't break any big logjams-but Clinton impressed his hosts, set the G-7 on a new course and gained global stature ...
  • Nuclear Brinkmanship

    The leaders of North Korea provided a chilling reminder last week that nuclear brinkmanship did not disappear with the cold war. Nor, apparently, did Pyongyang's desire to be anything other than an international pariah. On March 12 the isolated Communist government in North Korea announced that instead of allowing inspectors from the International Atomic Energy Agency to examine two highly suspicious nuclear processing sites 56 miles north of the capital city, it would abandon the treaty on nuclear nonproliferation that it and 154 other nations have signed. In Washington and in Seoul, officials drew only one conclusion. The move was confirmation of what has long been suspected: the North is determined to cobble together a crude-but deadly-nuclear weapon. "We see [the pullout) as a smoking gun," concluded a Beijing-based U.S. diplomat. "It is a tacit admission of the weapons orientation of their nuclear program." ...
  • Prosperity First

    I'm going to focus on the economy like a laser. Foreign policy in large measure will come into play as it affects the economy. ...