The Oligarchs (31 page)

Gusinsky was also thinking about money. In the United States, someone had mentioned to him that a minute of advertising on television sold for millions of dollars. “I seized the meaning,” he recalled. “Here it is, the gold mine, yet again. I understood that it was 100 percent possible to make money.”

The first year was exhilarating. Malashenko hastily drew up a plan which predicted they would need $30 million for the first fifteen months, and Gusinsky found the money with other investors, including Smolensky. They bought cameras, equipment, and office space, and they kept a wary eye on the news. Russia was heading into a mammoth political crisis, a face-off between Yeltsin and hard-liners in parliament. They were not yet on the air, but building a new, private channel was exciting. “It was a great time,” Kiselyov recalled later. “We were doing something for
ourselves,
we had complete freedom, we traveled a lot, and we felt that we were doing something significant, probably the most significant project of our lives.” When Kiselyov and Dobrodeyev left Ostankino, they took dozens of the best television people with them to the new, private channel, including announcers Tatyana Mitkova and Mikhail Osokin.

The Gusinsky high command could not decide what to call the new channel. Malashenko suggested NTV for Novoe Televidenie, or New Television. The others winced. It sounded awful, they thought. Then someone said, how about Nezavisimoe Televidenie, or Independent Television. No, that didn't work either. According to Malashenko, they decided to call it NTV and leave it at that. There was no official name, but Malashenko thought up a slogan. In Soviet times, he had spent years studying the United States and was fond of an old Strategic Air Command slogan: “Peace Is Our Profession.” He adapted it to NTV: “News Is Our Profession.”

NTV went on the air October 10, 1993, a week after the confrontation between Yeltsin and parliament turned violent. At first, the nascent station had only an hour a day of programming on a weak St. Petersburg channel. In the midst of Yeltsin's war with parliament, which was unfolding virtually across the street from Gusinsky's offices in the mayor's building, Malashenko sat in his car, a battered old Moskvich, and used his mobile telephone to try and make appointments in Cannes, where the television film and miniseries market was opening. As televisions screens flickered around the globe with the scenes of tanks bombarding the White House, Malashenko was trying to shout over the din, persuading people that a new television station in Russia wanted to buy their films. He then flew to Cannes and frantically tried to buy more programming. “People didn't want to sell,” he recalled. “It was incredible to believe that a guy would come from Moscow, where parliament is being shelled, to buy movies.”

For six months, Zverev lobbied for a decree from the Kremlin that
would give NTV the cherished Channel 4 airtime. Zverev argued that an independent channel would be a valuable source of support for Yeltsin, but he was lobbying for an idea that no one could grasp. “Nobody understood what independent, private television would be like,” Zverev recalled of his difficult and exhausting effort to win the presidential decree. Someone was blocking it, and Zverev could not figure out who. Once, by chance, he took Kiselyov to see Yeltsin's tennis coach, Shamil Tarpischev, a member of the president's inner circle, who had an office in the Kremlin. Zverev discovered the source of his troubles: Tarpischev was blocking the decree because he wanted Channel 4 to be a sports channel. Zverev persuaded him that NTV would broadcast sports, and his resistance ended.
¹⁷
Yeltsin signed the decree in December, and in January, NTV went on the air six hours a day, starting at 6 P.M.

Malashenko was still harried: he had managed to buy only two weeks' worth of programming. As tapes arrived in Russia, they were immediately dubbed and thrown on the air. It was chaos, but they were having the time of their lives.

The highest aspirations of the new television pioneers was to exist beyond the grip of the state, to produce what they called “normal” television. One of them had suggested half-jokingly that NTV should stand for “Normalnoye Televidenie.” Gusinsky loved movies, especially those from the West, and dreamed simply of a television channel broadcasting movies and news bulletins.

Gusinsky had started his newspaper with the idea of broadening his influence. Later he would relentlessly use his television channel as a political tool as well, and it would lead to endless troubles. But at the outset, the participants told me, they had not fully understood the risks. They had not even dreamed, back then, of turning their channel against Yeltsin, a friend and guarantor of the free press, whose own signature on the decree had given them the right to broadcast.

Gusinsky was now more than just a Moscow businessman who had connections. With NTV television and the newspaper
Sevodnya,
he had become a pillar of the new Russia.

His rivals had already begun plotting how to tear him down.

T
HE REVOLUTIONARIES were young men in their thirties, selfconfident, hopeful, untested in power, and confronted with a task far beyond their imagination or practical experience. For years, as assistant professors and little-known specialists, they had been dreaming about marginal, incremental changes to the stagnant Soviet system. They had satisfied themselves studying the slightly more progressive examples of economic experimentation in socialist Hungary and the Latin American transformations. Now, as they gathered in a government guest house, dacha 15, in Archangelskoe, a village west of Moscow, they were facing an entirely new world. The Soviet Union was in its death throes. They were being called not to save it but to bury it.

After the failed August 1991 coup attempt, Mikhail Gorbachev remained in office four months longer in a vain attempt to keep the Soviet Union from disintegrating. The final blow came in early December, when Boris Yeltsin and the leaders of Ukraine and Belarus, meeting at Belavezhskaya Pushcha, a hunting resort outside Brest, declared their own union, defying Gorbachev. The Soviet flag was lowered from the Kremlin three weeks later, on December 25, 1991, just after Gorbachev announced his resignation.

In the months before the final collapse, Yeltsin had begun to assemble a parallel regime that would take the radical economic measures Gorbachev had never made. Yeltsin passed over the older, well-known economists of the Gorbachev years and settled on thirty-two-year-old Yegor Gaidar, author of some of the best Soviet analyses of the economy in the party's journal of ideology,
Kommunist.
¹
Yeltsin recalled that Gaidar led a team of “arrogant young upstarts” who were “independent thinkers raring to go.” Instinctive and intuitive, Yeltsin ruled by feeling rather than by policy; he liked the simple directness of Gaidar's proposal for a “big bang,” a sudden jump to the free market modeled on Poland's experience after the fall of the Berlin Wall. Yeltsin was infected with Gaidar's enthusiasm for economic shock therapy. “I couldn't force people to wait once again,” Yeltsin recalled, “to drag out the main events and processes for years. If our minds were made up, we had to get going!”
²
Yeltsin wanted to make sure he totally destroyed Soviet Communism. Pyotr Aven, who worked alongside Gaidar, remembered that “Yeltsin was interested only in power. He wanted a team that would be very aggressive in throwing out all the old bureaucrats. He also understood that, to us, Yeltsin was a god, and we would follow him.”
³

In September-October 1991, Gaidar closeted himself with other young economists at dacha 15 to begin drawing up the details of Yeltsin's radical economic reform. Everyone who had worked with Gaidar knew he was a gradualist by temperament, a cautious reformer, ever respectful of the existing powers. For years, he had insisted on trying to accomplish modest, realistic steps rather than risk a giant leap that would never stand a chance. Aven had suggested to Gaidar in Soviet times that they study Sweden, a Western social democracy, as a model, but Gaidar knocked down the idea as too radical ; he instead suggested Hungary, which was safely within the Soviet bloc. Gaidar had a very strong intellect; he was the best and brightest of his generation, yet he also had a tendency to ponder the data, to see different sides of an argument.

Among those Gaidar put on his team at the dacha was Anatoly Chubais, fresh from St. Petersburg and less well known than Gaidar at the time. Chubais too had been a gradualist in earlier years, but now he heartily embraced the need for radical change. While Gaidar had a slightly professorial, diffident air, Chubais was determined and self-assured. Of all those at the dacha, Chubais became the reformer who
survived the longest, remaining in high-ranking posts throughout the 1990s. He was resolute and unyielding. It was his greatest asset, as well as a source of aggravation to those around him, that Chubais did not budge from a position once he had made up his mind. Gaidar was a trailblazing intellect but not a politician; Chubais was not an original thinker but a skilled, steely executor and political warrior. In the next few years, the two of them—Gaidar, short and stocky, a Pooh bear with a large, welcoming face, and Chubais, tall and lean, with a shock of sandy red hair and a complexion that flushed brightly whenever he became emotional—were transformed from obscure academics into the chief engineers of Yeltsin's economic revolution. They set out to accomplish nothing less than wreck the old system—smash the entire complex of planning, thinking, and behavior inherited from Lenin, Stalin, and their successors.

They each scored a singular, huge accomplishment toward that goal and left an equally disturbing legacy. Gaidar's most important contribution was to free prices from state control, crippling an oppressive tool of the centrally planned economy. But Gaidar's legacy was a tidal wave of hyperinflation that washed over Russia once prices were free, and it was far more destructive and persistent than Gaidar had imagined possible. It eroded the life savings of the population, disenchanting them for years to come.

Chubais's most important act was to break the state monopoly on property, putting the enormous industrial wealth of the country into private hands. The whole fate of the new Russia as a free market economy lay in whether these new, private owners would eventually prove more effective in running factories than the failed Communists. But Chubais did not pay heed, or care, to whom the riches of Russia were distributed, as long as they were private owners, free of the state. He figured that after several generations, the market would sort out the best from the worst. Surely, the worst would go broke by their own ineptitude and the best would enjoy the fruits of their labors. It was that simple: classical market theory. The reality would prove not so elegant.

Furthermore, both Chubais and Gaidar left a dangerous vacuum—the great breakthroughs toward free prices and private property were made without first building the key institutions of a market. In the chaotic dawn of Russia's post-Soviet statehood, the economy was a wild, uncontrolled jungle without rules of the game and those who
enforced them. In a mature market economy, competitors can pursue their disputes in forums with defined rules. They are like boxers in a ring. The contest is settled by the rules—either through the courts or in capital markets, where winners and losers are sorted out based on performance. But Russia did not have these forums, nor a strong state to create them, and this vacuum undermined the very aspirations and accomplishments of the revolution. How could Chubais possibly realize his dream of creating “effective owners” if there was no mechanism to reward the good and punish the bad? What good were free prices if no one was sure about their rights to property and profits? Gaidar regularly acknowledged that they were haunted by these unknowns. Was it better to unleash the boxers first or build the boxing ring for them to fight in? In the heady onrush of events in 1991 and 1992, Gaidar and Chubais decided: the boxers first; someone else, later, would take care of the rest. Chubais was certain that the players themselves would inevitably build the ring, once they saw it was necessary.

They were driven by urgency. They believed they could not put the revolution on hold for the years it would take to build up the institutions. But there was another, deeper reason—often unspoken but clearly evident—why Yeltsin, Chubais, and Gaidar did not immediately see the need for a stronger state. The Soviet state had been powerful and overweening; in their experience, authoritarianism had been a central, defining source of evil. They were thinking about destroying the old system, not recreating it.

As the autumn of 1991 set in, Gaidar and his brain trust feverishly prepared for Yeltsin's major economic speech to the Russian parliament at the end of October. A sense of unreality filled the air as the Gaidar team set out on a mission unlike any in their lives; it was at once exhilarating, frightening, and unimaginable. Mikhail Berger, then the economics editor of the newspaper
Izvestia,
who was respected by the young reformers and witnessed the Gaidar team firsthand, recalled that dacha 15 was brimming with expectation. In their banter and debate, it was as if they were on another weekend retreat like the two seminars of 1986 and 1987 outside of St. Petersburg, except this time the stakes were enormous, and real. “The atmosphere was as if the young people went on a hike somewhere to the mountains or just out of town,” recalled Berger. “It was the atmosphere of a club, and a game. In fact, everybody felt as if it were not for real.”
⁴

“Imagine, they sat discussing things and then someone might ask,
‘And who is going to be transportation minister?' They started laughing. ‘Here we are, fresh from the institute, discussing who is going to be transportation minister!' They treated it as some kind of game, not serious enough. They argued for a long time about who was going to be prime minister. None of them wanted to. Pure Kafka. Kids, sitting at the dacha, writing a program and trying to form a government. Of course, later it would change. But at that moment, it looked like a fairy tale about some kind of magic cave where they said ‘take as much treasure as you can carry on your back.' It was a cave of power. They tried to take as much power as they were able to carry.”