EDITORIAL: Whither Chichivarkin, whither Russia?


Whither Chichivarkin, whither Russia?

Yevgeny Chichvarkin

Yevgeny Chichivarkin

In May 2005, Business Week magazine ran a feature on a young Russian businessman named Yevgeny Chichivarkin.  It reported that while ten years prior Chichivarkin had only a small business “selling clothing and cigarettes at the bustling Luzhniki market in western Moscow” by 2005 he was the co-owner of the third-largest cellphone retailer in Russia, with annual sales approaching $1 billion.  BW opined:  “These young mobile millionaires prove that you don’t have to be a government-made oligarch to succeed in Russia. With a growing middle class, the country offers ample opportunity for entrepreneurs to tap unfilled retail niches.”

Less than a year later, his firm was the #1 retailer and he had won Ernst & Young’s Russian Retailer of the Year Award.  Known for his eccentric clothing and a red Porsche with the license “666” as well as being fined for using profanity in his company’s advertisements, the Moscow Times called him “no ordinary businessman.” Later in 2006, Time magazine reported: “In a corner of his Moscow office, perched beneath a painting of a businessman fondling his half-naked secretary, is an open silver attaché case containing wads of U.S. $100 bills in packs of $10,000. It’s meant as a joke, poking fun at perceptions of Russian businessmen as big-spending bandits.”

By 2007, the eccentric bloom was coming off the notorious rose.  Even though it now had nearly $5 billion in annual sales, over 5,000 branches nearly 40,000 employees, his company had slipped back down to the #3 position in the Russian market.  But Chichivarkin was still full of bluster.  He told Newsweek magazine:  “This country has never seen a company like ours. I have 37,000 employees, and I don’t want to run them the way Russian companies used to manage people. I have a simple logic—make money and teach the person next to you how to make money.”

Alas, for all his bravado the story of Mr. Chichivarkin had soon become all too familiar in the annals of Russian business.

The Moscow Times reported on January 23rd:  “Authorities are seeking the arrest of former Yevroset chairman Yevgeny Chichivarkin, who left the country late last year and has not returned, in connection with allegations of smuggling, kidnapping and extortion.” It was reported that Chichivarkin was in hiding in London.

Two of Chichivarkin’s employees, Boris Levin and Andrei Yermilov, were arrested in a September 2008 on similar charges.  Apparently, when the trio learned that a third, Andrei Vlaskin, had been stealing and and reselling the company’s inventory, they kidnapped him and attempted to blackmail him into sharing his ill-gotten booty.  It all came to light right around the time Chichivarkin sold his company “to billionaire Alexander Mamut in a deal that reportedly involved Mamut paying $400 million in cash and assuming $850 million in debt,” citing “liquidity woes” caused by the worldwide credit famine as the reason for the deal.

Chichivarkin then stepped down from his post as CEO and announced he was forming a new political party, to be known as “Right Cause,” and intended to run the Moscow chapter.  On January 22nd, the Kremlin’s English-language propaganda campaign known as “Russia Today” referred to Right Cause as an “opposition party” and stated: “The creation of a party with a liberal agenda is seen as a must by political analysts who say the new entity will give balance to Russia’s body politic.”

That’s gilding the neo-Soviet lily, to say the least.

A more accurate report would have stated that “Right Cause” is a Kremlin front, a sham designed to create the appearance of political balance where in fact none exists.  In other words, it’s a Potemkin Party.  The only members who are even vaguely associated with “opposition” to the Kremlin are those who came from the recently dissolved Union of Right Forces, founded by former Kremlin insider Boris Nemtsov in 1999.  But like all the other true opposition parties in Russia, including Grigori Yavlinski’s Yabloko, every single one of their representatives in the Russian parliament was purged in the most recent elections.  Now, Putin’s “United Russia” party of power hold an overwhelming majority and is supplemented only by equally sycophantic entities like that of the lunatic nationalist Vladimir Zhirinovsky. The only “opposition” left in the Russian parliament, called the Duma, comes from the Communist Party.

The other members of Right Cause came from two dissolving parties that were shameless Putin sycophants.  As URF dissolved, Nemtsov declared: “In my opinion, participating in the new Kremlin party, Right Cause, would be a huge human and ideological mistake. It would be a human mistake because people would condemn themselves to a status of political puppets, and it would be an ideological mistake because democratic parties that espouse liberal ideas have nothing in common with the Kremlin, which sets out a system of censorship, impunity and international isolation.”

Nemtsov then made common cause with Garry Kasparov, creating a new opposition organization called “Solidarity” in remembrance of the anti-Soviet organization in Poland, taking with him the segment of URF members who were truly opposed to the Putin regime (since its inception, URF had been seen as internally conflicted, with many members who were not willing to challenge the Kremlin in any serious way; when the party disbanded, one of its principal officers actually took a job working for the Kremlin).

Nemtsov is the author of two brilliant white papers documenting the economic failure of the Putin regime which my blog has translated into English (first, second), and one of the toughest critics on the mainstream Russian scene.  His white papers have been suppressed by the Kremlin and cannot appear in bookstores.  When he says Right Cause is a sham, he knows what he’s talking about.

If there is any cause for hope in all this outrage, it may be found in the fact that the Kremlin is currently unable to achieve even its most modest goals, and as such the Right Cause charade may be expected to founder as well.  In less than year, Russia’s stock market is down 70%, it’s currency and foreign exchange reserves are down 30%, and it has been repudiated by the civilized world for its brutal invasion of Georgia, which failed to dislodge the hated Mikheil Saakashvili, and its barbaric attempt to freeze Ukraine into submission by cutting off its heating fuel.

If the Kremlin’s worst enemy continues to be itself, then Right Cause may soon go the way of the dodo.

One response to “EDITORIAL: Whither Chichivarkin, whither Russia?

  1. I must just correct you about the Russian stock market. The RTS is currently down 78.6% from its peak.



    Once again, we apologize for being far too soft on Russia!

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