вторник, 22 сентября 2009 г.

Reforms, traffic on Sochi agenda

Moscow News, by Ed Bentley:

Elsewhere, oligarch Alexander Lebedev was already dangling the carrot for foreign investors, offering to give away shares for free. Before a disorderly queue developed, however, he laid down the sort of person he was looking for.

"If Warren Buffett agrees to take a 2 or 3 percent stake in my housing company free of charge for one rouble, that would bring me expertise," Lebedev said in an interview with Reuters earlier in the week.

пятница, 18 сентября 2009 г.

New generation

MOSCOW (Reuters) - Tycoon Alexander Lebedev has proposed his newborn son to replace him on the board at Aeroflot (AFLT.MM: Quote, Profile, Research, Stock Buzz) in a tongue-in-cheek attempt to highlight what he says is continued weak corporate governance at Russia's state-run corporations.

Lebedev, an outspoken former KGB spy who made his fortune in banking, told the Reuters Russia Investment Summit this week he believes corrupt officials and state executives have pocketed $500 billion in bribes over the last few years.

The situation is not improving, he said, as the state has failed to implement a mechanism to control its bureaucrats and executives.

"Can I put my three-month-old son, Nikita, on Aeroflot's board in place of myself?" said Lebedev, who owns 30 percent of state-run Aeroflot, Russia's national flag carrier.

"Guys, you don't need me. Let my son work there. It wouldn't be a problem -- he's a clever guy," Lebedev said, quoting from a letter he sent to Aeroflot's new president, Vitaly Savelyev.

Lebedev, rare among Russian businessmen in daring to criticize the Kremlin, said he was angered by Aeroflot's decision to shun dividend payments while splashing millions of dollars on non-core projects.

The airline has rented an expensive new office in central Moscow and sponsored leading Russian soccer club CSKA Moscow and the 2014 Winter Olympics in Sochi.


Today I am on the conference of "The Economist" in London

Of bees, bribes and bureaucrats

Exclusive outtakes from industry leaders

Posted by: Melissa Akin

Russian banking and aviation magnate Alexander Lebedev, owner of London’s Evening Standard, estimates that Russian bureaucrats have pocketed $500 billion in bribes in the past four years and corruption and red tape make Russia one of the worst places to invest on earth.

On the scale of bureaucratic outrages, Lebedev hit a personal low when the authorities asked him to produce a 100 page report on bee poo. They claimed to be concerned about the excrement produced in the hives at one of his farms.

“The conditions for entrepreneurship in Russia are simply horrible,” Lebedev told the Reuters Russia Investment Summit.

Lebedev has plenty of suggestions how to cure the disease. One of them would be to fire at least half the bureaucrats. “They are wealthy people. Let them go to Saint-Tropez,” he said.
One could wonder how billionaire Lebedev gets away with criticism of the Kremlin while his peers who had dared to challenge authorities had to flee to London or are serving prison terms in Siberia, like the oil magnate Mikhail Khodorkovsky.

Lebedev, a former KGB agent like Prime Minister Vladimir Putin, says Putin is open to criticism and these are mainly mid-level bureaucrats who are causing trouble. “Putin is a hostage to the tradition of a corrupt country,” says Lebedev.

But he says Khodorkovsky must be freed and often repeats “God Forbid” when mentioning other fallen oligarchs.

Perhaps having a critic like Lebedev is valuable for Putin — if the prime minister does launch a fresh crackdown on corruption or major regulatory reforms, he will immediately have a cheering section. And without Lebedev, the Russian corporate landscape would be too dull.

Sun, sea and excess on the Côte de Crime

Diary: Alexander Lebedev
Alexander Lebedev

Published 17 September 2009

As I have recently become a father again at the age of 49 - my son Nikita is now four months old - my choice of where to holiday this summer was somewhat limited, as I often like to travel way off the beaten track. As a child I wanted to go and live with tribes in Borneo or Papua New Guinea whose way of living has been uninterrupted for thousands of years. We chose this year to rent a villa in Villefranche in the south of France.

The time away gave me the opportunity to do some thinking, and I tried to find the answer to the $500bn question: where did the money stolen from the Russian people in the greatest-ever era of corruption disappear to? And so, as Nikita enjoyed his first holiday, I realised that in France I could do my own investigation on this matter for Novaya Gazeta, the Moscow paper I co-own with Mikhail Gorbachev. My task was a simple one - to work out the extent and nature of corruption today and where the stolen money has gone. I always assume that vast sums of money have been siphoned from my country and are being laundered in some "tax haven".

This got me thinking how easy it is to see why the Côte d'Azur became the place for Russian "high society" to spend their summers. It was, after all, Somerset Maugham who noted that it was full of "shady people in sunny places". In many ways I think it is also like a sort of modern-day Vanity Fair, but one consisting of oligarchs, half-oligarchs, nearly-oligarchs, state officials and their numerous servants. It's like the ski resort Courchevel at Christmas: excess spending and then more spending. Sometimes it seems that the crafty French authorities specially arranged for it all to be just so - all this extravagance and decadence on display - ready, one fine day, for them to send in their special forces by helicopter and make embarrassing arrests (as they did with spectacular effect in Courchevel).

The indigenous French are often dazed and confused by the Russian visitors, looking at them with ironic sideways glances. All this makes me think back to my dream of one day going to Papua New Guinea, where social status is also ludicrously on display. The people wear holim - pumpkin-skin sheaths covering the genitalia - and the size of each shows the social status of each male. Not so different, now I think about it, from the Russian bureaucracy on Moscow's streets with special sirens and blue lights on their BMWs, speeding at up to 140 kilometres an hour.
On the Côte d'Azur a similar visual hierarchy thrives. Local people are surprised by the Russians' garish status symbols - châteaux, yachts, Bentleys with Moscow registration plates and a slew of very single girls. Partying goes on from morning till night, but there is a feeling that this whole dolce vita is a sham - a futile, empty show in which the actors themselves are bored. We see cynicism and jealousy, hatred and servility and eternal human fear.

Fear because at the back of the mind of some of those partying in St Tropez is the knowledge that what they have does not legitimately belong to them: it has been purchased with money stolen either from the treasury, or from the owners. Or they have taken out a dodgy loan. And there is the thought that at any time, both in Russia and France, the police may come knocking at their door.

Some Russians can already only view their palaces on Cap Ferrat from London as a search warrant is out for them. The "new Russian" architecture of the Côte d'Azur shows a lack of taste. Everything that was built by the Americans, British and French in the past 60 years has been wrecked by new buildings. The marinas are filled with floating gin palaces, so there is now no room to swim. All this is done in the name of vanity and social status. A lot of people who usually stay in the shadows suddenly come into focus in exotic places, where they think no one will recognise them. But the truth is, there is no place to hide. Incidentally, talking of the worst architecture, I am still glad the 1.2 kilometre-high skyscraper in Moscow by Norman Foster has not yet stained the skyline.

Among Russians on the Côte d'Azur there is a small number of those who have earned something legitimately and created added value for their country (mostly bankers). But on the whole it is those "businessmen" who come to spend money taken from their state's coffers. This is criminal.

I think all this cannot go on. The world has changed. If you look at people who steal money, you can trace where their money is. President Obama's administration has got information on the secret accounts of Americans at UBS in Switzerland. The British government is battling to close the loophole of "tax havens". Who knows, we may soon see the G20 set up a special organisation to fight corruption. Is corruption less harmful to society than apartheid? No. But the system of apartheid was destroyed only when international pressure squeezed it into extinction.

Alexander Lebedev is co-owner of Novaya Gazeta and the London Evening Standard

Ken Livingstone: the Lebedev connection

Dave Hill's London Blog

I'm in a coffee shop called Snacklite across the road from Palestra, where I've just watched my first meeting of the LDA board. One thing all agreed on - and there wasn't very much - is that the £160 million Olympic land purchase overspend - or "over-run" is it was delicately renamed by chairman Harvey McGrath - was entirely the fault of the previous LDA regime under the previous mayor.
That's not the only reason I've been thinking about Ken Livingstone this morning. His (once and future?) chief of staff Simon Fletcher has reported that Ken's forthcoming guest editorship of New Statesman will feature a Diary column written by the new owner of the New Evening Standard, Alexander Lebedev.
Vintage Ken. What could be cheekier than to invite the new publisher of the erstwhile Evening Boris to grace his special edition of the political weekly that joined in with the old Standard's pre-election trashing of him? Not that all traces of the gruesome old regime have yet been cleansed. Consider last week's "Baby P Social Workers Fed Child To Terror Plotter (Well, Sort Of)" front page. That said, it's hard to disagree with the Standard's recent editorial arguing that the Olympic land purchase affair is a further indictment of the way the agency was run when Livingstone was Mayor.
It is a very different story from the LDA grants affair that did damagingly good business during the election campaign (the telling of it was a classic case of overselling and "monstering" in the service of political spite). The Olympic overspend is not about public money being misspent, but about spending decisions not being recorded properly and the financial implications therefore not being known about until much later than they should have been.
To have gone over budget when under pressure to complete hundreds of lands deals so that preparation of the Olympic Park site could go ahead on time may be forgiveable - and not surprising. These things happen in the property trade (and no one is complaining now about the Park's construction being up to speed). But the mysterious failure of the organisation to detect that this was happening and make adjustments at the time renders the view that the LDA was poorly run on Ken's watch that much harder to argue with.
Mayor Johnson's opponents may argue that the Boris LDA isn't exactly ship shape either, and some of Boris's own allies on the board seem to agree. But from where I'm sitting, if and when Livingstone launches his 2012 mayoral bid, he'll need an all-new, improved and suitably contrite story to tell about how he'd have the LDA operate. If not, the Olympic dream he did so much to bring to life may yet turn into an electoral nightmare. And being nice to Lebedev won't make it go away.
PS. This post was augmented and sharpened up at at 14:02. Perfectionism or what?