“Grab-it-ization” and “Shitocracy”1 Corruption exists in many forms and infiltrates various levels of the corporate world and the government, which often over lap. Following the transition from communism, Russia was plundered by select individuals, frequently with the help or manipulation of government officials or state industrial managers. In Paul Klebnikov’s book, Godfather of the Kremlin, he outlines with astute detail events that took place during the period of mass corruption as well as the interweavings of the individuals responsible for the pillage and ultimately, Russia’s drastic decline. Particularly, he focuses on Boris Berezovsky, a reputed oligarch, and his rapid ascension through the political ranks correlating with his ever expanding empire. Klebnikov’s core argument revolves around how “the government deliberately enriched Berezovsky and a handful of men in return for their political support.”2 In order to grasp sufficient understanding of the novel’s main events, Klebnikov maps the Russian political landscape at the time, detailing to the economic impact that particular decisions made by public officials had on shaping post-communist Russia. Although Mikhail Gorbachev began his presidency strong, both external and internal events derailed Soviet Russia’s economy. Since “the U.S.S.R. was a petroeconomy,” at the end of 1985 when “the Saudi oil minister Sheik Ahmed Yamani […] announced that Saudi Arabia would no longer support oil prices by limiting its production” it resulted in a massive blow to oil prices and consequently the Soviet economy.3 The cost of the war with Afghanistan was also asserted to be an external source of failure for the Soviet economy. Internally, prohibition proved cancerous for the Soviet economy because it depleted the state of its main source of revenue. Vodka sales “typically account[ed] for nearly 25 percent of budget revenues.”4 However, Gorbachev’s anti-alcohol policy allowed what would have been state profits, to be siphoned off by “bootleggers, [many of whom became millionaires,] laying the foundation for Russia’s first criminal capital.”5 Klebnikov further argues that “as the vodka Mafiya evolved into a national network, it relentlessly corrupted the government apparatus –starting with local police, then the courts, mayors, and regional Communist Party bosses and ending with ministers of the central government.”6 Despite later abandonment of prohibition, “the damage to government finances, Gorbachev’s popularity, and the fight against organized crime had already been done.”7 Yet, the most detrimental executive decision was financing the government’s expanding deficit by printing money. This mistake resulted in “the rapid accumulation of money in the hands of the population, combined with the growing scarcity of consumer goods, [this] became known as the ‘ruble overhang’” which was officially estimated to be “half the size of the U.S.S.R.’s gross domestic product [(GDP)].”8 The suggested 500-Day Plan developed to defuse the ruble overhang was never executed and Klebnikov asserts that “this would prove to be a fatal mistake.”9
Realizing the U.S.S.R.’s imminent destruction was fast approaching, members of the KGB utilized their expertise in “using offshore tax havens, setting up shell games, and laundering money”10 to the Soviet Communist Party’s advantage. In 1990 a secret memorandum issued by Colonel Leonid Veselovsky the scheme was summarized as “creating a network of captive banks and trading companies, both in Russia and abroad, to collect billions of dollars of government funds during the ‘period of emergency’ and keep them for the Communist nomenklatura until a more propitious time arrived.”11 These efforts were pivotal in “allowing the Party to keep its participation anonymous and still retain control.”12 Klebnikov demonstrates the reliability of his source by explaining that “General Kalugin
