Lifestyles Of Russia's Filthy New Rich

It wasn't half bad, as birthday parties go. A parade of Mercedeses, BMWs and Cadillacs, many with escort cars and flashing blue lights, wound outside the opulent Metropole Hotel, just blocks away from the Kremlin. Beefy security men whispered into walkie-talkies. Inside, men in Italian suits and women in diamonds, Versace and Chanel checked their furs and joined the receiving line. Vladimir Gusinsky, head of MOST Bank, was celebrating the fifth anniversary of his bank's opening. Surrounded by admirers and lackeys, he looked like exactly what he is: one of the richest men in Russia. The champagne was flowing. Buckets of black and red caviar, along with pates, hot meats and a vast assortment of pastries, blanketed the tables. Party favors? Each guest received a silver-plated clock.

This is not the Russia of crumbling factories and impoverished babushkas. Living standards are in general still abysmal, but that is not what strikes the eye in Moscow today. The explosion of commercial activity -- legal and otherwise -- has created a new class: the filthy rich. Some 80 percent of Russia's money is concentrated in Moscow, dividing the city into haves and have-nots. The rich live a life beyond the reach of most foreigners, let alone Russians, whose average monthly income is still only $100. They are protected by bodyguards and the tinted windows of their $150,000 Mercedes 600s. They buy villas on the Cote d'Azur, send their children to study at Oxbridge. They wear clothes from Paris and Milan, and think nothing of dropping $100 each for lunch at one of Moscow's glittery five-star hotels. ""Where are the Russians who used to bring canned food and sausages with them when they traveled and saved every dollar?'' asks Yuri Shchekochikhin, an investigative reporter at Literaturnaya Gazeta. ""This is a colossal phenomenon, this Russian wealth.''

Where did all the money come from? Most of the new robber barons -- an estimated 61 percent of Russia's richest people, according to one study -- simply turned the socialist empires they managed into their own private companies. Others built their fortunes on the roots of criminal trading they were doing secretly during Soviet times. The result is a pervasive sense of unfairness -- particularly since Russia still has no real middle class. But Russian society for centuries has been driven by envy. ""It would be naive to think that a mentality formed over hundreds of years could be changed in five years,'' says Aleksei Timofeyevich, a journalist at Kommersant. ""Social envy is one of the main problems we will face in the next decade.'' The disparities of wealth and opportunity have already become a political issue: nationalists are trying to mobilize anger against the ""bandits'' who, they say, cloak greed in the language and programs of economic reform.

The consumption of Moscow's filthy rich is conspicuous even by Western standards. Tverskaya Street, near the Kremlin, sparkles with neon signs advertizing Volvo, New Balance, designer clothing and crystal and jewelry stores. The customers are all Russian. Nearby, a Moscow branch of Paris's Jacques Dessange hair salon opened six months ago to a flood of clients. ""They care much more about their beauty than the rich in the West,'' says Jean Noel Limond, the manager. ""These people don't take one piece of Versace and mix it with something else -- they are dressed in it from head to toe.'' Moscow night life is even more extravagant. At the Up and Down Club, where new members open credit accounts for an average of $500, men check their pistols at the door before heading upstairs to watch the gyrations of young women in G-strings. They sip the club's most popular drink: Hennessy Paradise cognac, at $100 a shot. ""We don't have any foreign customers,'' says Yaroslav Yelyutin, the 23-year-old manager. ""They can't afford this.''

It's harder to get rich now than it was, say, five years ago, but the opportunities are still startling. A few years ago, anybody who got his hands on raw-materials export licenses or cheap property could become a millionaire overnight. All it took was good connections. Today, the property and markets have already been divided; breaking in isn't easy. ""The market was absolutely empty; you could sell anything,'' says Kondratyev. ""Now you have to look for something special.'' Valentin Pavlov, former Soviet prime minister turned entrepreneur, puts it in more sinister terms: ""You want your share, but there are no places at the table,'' he says with a smug smile. ""To get in now you either have to have huge amounts of money or guns.'' But the rewards are worth the effort. ""If you have a profit of 10 percent a month and Merrill Lynch is offering you 10 percent a year,'' says Dmitry Volnov, whose conglomerate includes banks and trading companies, ""you figure it out.''

Moscow's liberals argue that it is beside the point to complain about the unfairness of capitalism. There are already signs that money stolen and stashed overseas is coming back in the form of investments. A large part of the hundreds of millions of dollars in the Russian stock market is now returning Russian money. And now that the state's property has been divided, the cowboy capitalists will have to make their new enterprises competitive. Those who fail will lose out. The ruthlessness has led to a general pessimism in Moscow and a sense that those now left behind have little hope of ever catching up. But even that may be changing. Two years ago, a survey showed that 38 percent of the people believed the rich should be killed. Today, the proportion is around 10 percent -- progress, of sorts. ""There is a cleansing function of the market that is straightening things out,'' says Olga Kryshtanovskaya, head of elite studies at the Institute of Sociology. ""People who are able to be successful now must be talented and gifted.''

The wild ways of Moscow's robber barons may change, too. ""Sure, there are lots of funny, ridiculous characters nowadays, with their new money and flashy behavior,'' says Oleg Boiko, a banker and retailer who is said to be one of the 10 richest Russians. ""But they'll calm down in two years; they'll get polished. The next step will be getting some sense and education, more manners. What's important is that people have begun to feel free.'' This feeling is important to any rebuilding of the economy. Meantime, Russia's new rich are having one swell party.

< b>THE ART OF BEING RICH

A slick magazine named Domovoi offers tips for the newly affluent:

Tell the store what you want, and it will buy the designs for you at Paris fashion shows. Otherwise the store gets only a few pieces of each design, and ""whiny customers may grab them.''

Talking to a maid used to be ""almost a special art,'' says Domovoi. Today, it says, housewives are either too friendly or too condescending. If you tell a maid your secrets, she ""will tell everybody.'' On the other hand, ""rudeness reveals the housewife's poor upbringing.'' When talking to a maid, ""speak in a calm tone, but it should be clear that what you say is an order.''

Lifestyles Of Russia's Filthy New Rich | News