A New Battle

Berezovsky had also embarked on a momentous legal struggle that would cost him millions and, some say, contribute to his untimely death. In July 2005, he announced to the Russian business newspaper Vedomosti that he was bringing a lawsuit against Roman Abramovich for “using blackmail and threats to force me to sell assets in Russia at a reduced price.”⁹ Almost two years later, in June 2007, Berezovsky filed a formal claim against his former partner for $5.6 billion in the British High Court. The following October, after spotting Abramovich in a Knightsbridge Hermes store, Berezovsky served him with court papers, saying, “I have a present for you.” He later described the incident as “like a scene from ‘The Godfather.’”¹⁰

Said to be worth over $12 billion, Abramovich had continued to enjoy Putin’s favor, though he spent increasing amounts of time in Britain, where he owned several lavish homes, along with the Chelsea Football Club. He also was the owner of a Boeing 767 and the world’s largest yacht—a 560-foot vessel equipped with two helipads and a submarine.¹¹ As noted, in 2001 Berezovsky and Patarkatsishvili had received a $1.3 billion payment from Abramovich in return for their giving up claims to Sibneft. Four years later, Abramovich sold his 70 percent interest in Sibneft to energy giant Gazprom for a staggering $13 billion. Had they not been forced by Abramovich to relinquish their shares earlier, Berezovsky stated in his lawsuit, he and Patarkatsishvili would have received half of that sum, given that their joint interest in Sibneft was split with Abramovich fifty-fifty.

Another, much smaller part of Berezovsky’s claim against Abramovich had to do with shares in aluminum companies, which, according to Berezovsky, he, Patarkatsishvili, and Abramovich had acquired by using their profits from Sibneft, and then merged in 2000 with assets of the oligarch Oleg Deripaska to form a company called Rusal. Berezovsky contended that he and Patarkatsishvili together owned 25 percent of the Rusal shares, although they were controlled and legally owned by Abramovich. In 2003, Abramovich had sold shares of Rusal to Deripaska without the permission of Berezovsky and Patarkatsishvili and had not compensated them, except for a sum to Patarkatsishvili for supposedly providing services that facilitated the venture.¹²

The trial of Berezovsky vs. Abramovich at London’s High Court of Justice, the largest financial case in British history, did not begin until October 2011, after extensive legal proceedings that involved round after round of appeals on procedural and factual issues and lengthy witness statements. For the trial alone, there were four thousand pages of written submissions. In the words of the presiding judge, Justice Elizabeth Gloster: “Given the substantial resources of the parties and the serious allegations of dishonesty, the case was heavily lawyered on both sides. This meant that no evidential stone was left unturned, unaddressed or unpolished.”¹³

The hearings, courtroom drama at its best, continued until January 19, 2012, attracting unprecedented media coverage. According to The New York Times: “At a time of austerity and grim news wafting from Europe, the trial has proved to be a welcome cinematic diversion. The two oligarchs travel with large entourages that include burly bounceresque bodyguards sporting Secret Service-style earpieces, and comely girlfriends wielding designer handbags.”¹⁴ The journalist Peter Pomerantsev was similarly impressed: “The witnesses at court number 26 in the Rolls Building were a who’s who of post-Soviet Russia: anti-Putin activists, Chechen ministers-in-exile, former heads of Kremlin administration, directors of Chelsea Football Club and a thirty-strong team of English lawyers. ‘That’s the last twenty years of our history stuffed into one room,’ a Russian journalist said.”¹⁵

The dispute centered on whether Berezovsky and Patarkatsishvili had in fact owned shares in Sibneft and Rusal. Abramovich’s contention was that the two had never contributed financially to his commercial ventures and never were shareholders. They received payments from him for providing krysha, including political patronage and lobbying.¹⁶ According to Berezovsky, he and Patarkatsishvili were actual shareholders and were paid profits as such, but Abramovich had insisted that they keep their ownership secret and allow him to control their shares because of Berezovsky’s political involvement with the Yeltsin administration. “I would not have expended my own commercial connections and personal political capital, far less have made financial commitments,” Berezovsky said in his witness statement, “were it not for the fact that I was to become a part-owner of the newly created company.”¹⁷

Abramovich, in Berezovsky’s account, later pressured them to sell their shares by threatening them with reprisals from the Kremlin, including against their friend Glushkov, who was languishing in a Russian jail. But Abramovich alleged that, when he and Patarkatsishvili conducted negotiations in early 2001, there was no discussion of Patarkatsishvili and Berezovsky selling him their interests in Sibneft, which they did not have, and that Patarkatsishvili had only requested a final lump-sum payment for krysha services. Abramovich also claimed that he never used Glushkov’s imprisonment as a threat. He had discussed Glushkov with Patarkatsishvili, he said, only out of concern that Berezovsky’s confrontational behavior toward the Kremlin would jeopardize Glushkov’s situation: “Mr. Patarkatsishvili and I discussed ‘how to control Boris,’ i.e. how best to try and persuade Mr. Berezovsky to moderate his conduct (which I thought was quite irresponsible) so as not to worsen the relations with the Russian government even more. I remember telling Mr. Patarkatsishvili that Mr. Berezovsky behaved like a child.”¹⁸

With Patarkatsishvili dead, there was no one to challenge Abramovich’s retelling of this meeting. Patarkatsishvili had given witness statements before he died that were offered in evidence at the trial to show that his discussions with Abramovich were based on his assumption that he and Berezovsky were shareholders of Sibneft. But in cross-examining those who prepared the statements, Abramovich’s lawyers cast doubt on their veracity, thereby strengthening Abramovich’s claim that he had a good relationship with Patarkatsishvili up until his death, meeting with him on several occasions. (Patarkatsishvili’s widow, Inna Gudavadze, had by this time aligned herself with Abramovich, who was helping her access Patarkatsishvili assets in Russia. She noticeably sat on Abramovich’s side in the courtroom.) According to Abramovich, when the two got together in Israel in early 2006, Patarkatsishvili told him that he would not support Berezovsky’s lawsuit against him: “I remember him saying that he thought I had treated them very fairly with regard to Sibneft. He said that no one would have paid them more.”¹⁹

Court Testimony

The burden of proof was on Berezovsky, as the claimant, and he was the first to take the stand, testifying for six days. Things did not go smoothly. On October 6, Abramovich’s chief lawyer, Jonathan Sumption, cross-examined Berezovsky and successfully backed him into a corner when he brought up the fact that Berezovsky persuaded Yeltsin’s Family to approve the creation of Sibneft so he could use the profits for ORT, which proved pivotal in convincing people to vote for Yeltsin in 1996:

At another point, Sumption asked Berezovsky about a statement he made to the Russian journalist Nataliya Gevorkyan in a 1999 interview: “I am not a Sibneft [share] holder, and I have said that many times, although I was lobbying for the creation of this company, and I have strategic interests within this company and in relation to it.” Berezovsky agreed that the quotation was correct but asked Sumption “to understand the context of everything what [sic] we’re discussing.”²¹ Berezovsky’s point was that he denied publicly that he owned Sibneft shares for political reasons, because of his association with Yeltsin and the Kremlin. But Sumption’s cross-examination and Berezovsky’s inconsistencies were damaging to his credibility.

The issue of why Abramovich made payments to Berezovsky and Patarkatsishvili was crucial to the ownership question. In his witness statement Abramovich said: “Mr. Berezovsky’s demands [for payments] were not tied to any notion of a ‘share of profits’—be it of Sibneft or any other company. Mr. Berezovsky never asked me to provide to him any official profit and loss position for either Sibneft or any other company under my control. He only seemed to be interested in whether I had sufficient cash available to afford his demands for payment.”²² Berezovsky’s hands-off approach was confirmed in his trial testimony, when Justice Gloster asked him: “Was there any formal or informal process whereby Badri or you, or staff on your behalf, would audit the profits that were being generated by Sibneft?” Berezovsky’s response (in imperfect English) was: “I don’t know anything about formal process. I just know about regular meetings Badri [had] with Roman.” When asked by Sumption how Patarkatsishvili had ascertained Sibneft profits, Berezovsky replied: “I don’t have any idea. I think, as we agreed … in ’95, we trust Abramovich and we didn’t have time to manage the company and send audit.”²³

These statements would be cited by Justice Gloster in her final judgment, where she commented: “If indeed there had been an express agreement that Mr. Berezovsky and Mr. Patarkatsishvili were to be jointly entitled to a 50% share of the net profits after tax of Sibneft and/or Mr. Abramovich’s Trading Companies, one might have expected that at least some sort of informal audit process would have taken place.”²⁴ Berezovsky had explained his lack of concern for financial details and written contracts in his witness statement. “Such oral agreements were simply common practice at that time between Russians in Russia, where most business dealings at the level at which I operated necessarily place a high emphasis on personal trust.”²⁵ As he gave his testimony, he had difficulty conveying this point.

It hardly helped Berezovsky’s case that Putin’s former chief of staff Aleksandr Voloshin testified to the court that neither he nor Putin had pressured Berezovsky to sell ORT in August 2000 or threatened him by bringing up Gusinsky’s arrest. There was no need, Voloshin said, to have Berezovsky sell his ORT shares because the government had 51 percent of the shares in the television company, and Berezovsky controlled only 49 percent, so they could appoint the director and control content and programming. They just wanted Berezovsky to stop exercising his “informal” influence over ORT. In fact, Berezovsky had always exerted enough control on ORT’s board of directors to veto major decisions. Justice Gloster would later say in her decision that she found Voloshin’s testimony convincing: “Although he gave evidence through a translator, I formed the impression, from the manner in which he gave his answers, his demeanour and the content of his answers themselves, that he gave his evidence honestly and directly … his account of the meetings [with Berezovsky] was more credible than that given by Berezovsky.”²⁶

Justice Gloster also accepted as truth the testimony of Putin’s trusted oligarch Oleg Deripaska, made to the court through video link. Berezovsky had stated that in March 2000 at London’s Dorchester Hotel, he, Patarkatsishvili, and Abramovich met with Deripaska and agreed on a merger of their aluminum assets, obtained with profits from Sibneft shares, with those of Deripaska, to form Rusal. Berezovsky and Patarkatsishvili would own 25 percent of the new company, Abramovich 25 percent and Deripaska 50 percent. Deripaska testified that there had been no negotiations concerning Rusal at the London meeting because he and Abramovich had already agreed on the merger, with just the two of them Rusal owners. Admitting his intense dislike for both Berezovsky and Patarkatsishvili, Deripaska said he attended the meeting because it gave him an opportunity to get to know Abramovich better, and, he added, because Berezovsky owed him money.²⁷ At that time Berezovsky still resided in Moscow, so it was not clear why Deripaska felt he had to fly to London to confront him.

For his part, Abramovich said that he had flown to London for the meeting only because Berezovsky had requested it: “At that time I still regarded Berezovsky as one of the most powerful men in Russia, and when he invited me for a meeting, I would always attend.”²⁸ To a seasoned observer of Russian politics, Abramovich’s explanation must have seemed weak. By March 2000, it was clear that Berezovsky no longer had clout with those running the government, let alone with Putin. Whatever the incongruities of their narratives of the London meeting, Justice Gloster would later come down on the side of Berezovsky’s detractors, concluding: “I prefer their evidence to that of Mr. Berezovsky.”²⁹

The judge would also interpret in Abramovich’s favor a key piece of evidence introduced by the Berezovsky team—a transcript of a conversation, secretly taped by Patarkatsishvili, between Abramovich and Berezovsky at Paris-Le Bourget Airport in December 2000. In the conversation Berezovsky says clearly that he, Patarkatsishvili, and Abramovich should legalize their interest in Rusal. Abramovich responds: “We only hold 50 per cent there, so the other party has to agree,” and adds that, because of taxes, such legalization would reduce their income [from Rusal]. He then says: “Besides, you will have to wait in line to receive dividends.” Amazingly, Justice Gloster concluded: “Taken in context, one can see that Mr. Abramovich’s comment was a response to Mr. Berezovsky’s suggestion that he should become a shareholder in Rusal in order to receive payments in the future, rather than any recognition of an existing interest.”³⁰ It would be seven months after the hearings ended in January 2012 before the judge would reveal her findings to a packed and anxious courtroom.

Putin Challenged at Home

During the Medvedev interregnum, Putin, as prime minister, had continued to pull the strings of power in the Kremlin, much to the disappointment of Western leaders, including President Barack Obama. The US ambassador to Moscow in 2010, John Beyrle, reportedly repeated a joke that had been going around Moscow: “Medvedev sits in the driver’s seat of a new car, examines the inside, the instrument panel, and the pedals. He looks around, but the steering wheel is missing. He turns to Putin and asks: ‘Vladimir Vladimirovich, where is the steering wheel?’ Putin pulls a remote control out of his pocket and says: ‘I’ll be the one doing the driving.’”³¹ Putin had even prevailed on Medvedev to initiate a law changing the presidential term from four to six years.

When Medvedev announced at the United Russia party conference in late September 2011, that Putin would be the presidential candidate in the 2012 elections, it came as a rude shock to Putin’s political opponents. Nemtsov, leader of the People’s Freedom Party (Parnas), told a journalist that this was “the worst possible scenario for the development of my country.”³² As the news sunk in, the implications became clear: Putin, sure to win the presidential contest, could remain as Russia’s leader, not only until 2018 but until 2024—all told, for longer than even Brezhnev had served! Adding insult to injury, Putin then announced that he would choose Medvedev as his prime minister, and that this swap had been agreed on before Medvedev ran for the presidency in 2008.

Lilia Shevtsova observed: “The ruling faction has demonstrated its focus on lifelong rule. They can no longer jump out of the logic of omnipotence. They cannot leave. And this is the most important result of the Putin-Medvedev swap. The authorities themselves have begun to prepare Russia for the Arab Spring.”³³ The explosion of Arab uprisings that began in early 2011 had indeed caused considerable consternation in the Kremlin. Not only did Putin and his men fear that the revolts would encourage Islamist movements in the North Caucasus, where insurgency continued to fester; they had a more general concern that revolutionary sentiment would spill over into Russia as a whole. They also believed that Western powers were supporting the revolutions in order to squeeze Russia out of the Middle East and inspire the Russian people to follow the Arab example.³⁴

Negative public reaction to the swap soon appeared on the Internet, where anger over the succession plan was vented on Twitter, Facebook, YouTube, and VKontakte. The discontent spread to the point where Putin was booed by crowds at Moscow’s Olympic Stadium in November 2011. By that time, according to polling by the Levada Center, Putin’s approval rating, although high by Western standards, had dropped to 66 percent, the lowest since 2000, and it would drop to 63 percent in December.³⁵ When Russia elected delegates to the Duma on December 4, the pro-Kremlin party United Russia barely retained a majority, despite the widespread election fraud that was documented by election observers.

Word spread quickly, along with calls for protests. Russians were used to manipulated elections, but coming on top of the announced swap by the Putin-Medvedev tandem, the fraud was too much for many. On the night of December 5, a crowd of nearly five thousand showed up in the center of Moscow and heard the opposition activist Aleksei Navalny speak as they waved banners saying, “Russia without Putin.” Police arrested nearly three hundred people, including Navalny, who was sentenced to jail for fifteen days. After hearing of the arrests, US Senator John McCain tweeted a message to Putin: “Dear Vlad, the Arab Spring is coming to a neighborhood near you.”³⁶ The protests continued, swelling to tens of thousands at Bolotnaia Square a few nights later.

On December 24, close to a hundred thousand demonstrators rallied on Andrei Sakharov Prospekt, where the most prominent members of Russia’s political opposition spoke, including Navalny, fresh out of jail. Navalny stole the show, declaring: “I can see that there are enough people here to seize the Kremlin. We are a peaceful force and will not do it now. But if these crooks and thieves try to go on cheating us, if they continue telling lies and stealing from us, we will take what belongs to us with our own hands.”³⁷

If ever there was a moment when Putin’s grip on power seemed seriously threatened, this was it. The authorities, clearly surprised by the huge numbers of angry citizens, were shaken. As the journalist Julia Ioffe put it: “2011 is the big wakeup call for them. This is when the color revolution finally comes to Moscow. This is Putin’s biggest fear. Remember, this comes at the end of a year in which Muammar Qaddafi is toppled from power and is killed in a very public and humiliating way. And it started, again, as peaceful protests.”³⁸ Comments like those of Senator McCain may have furthered the impression in the Kremlin that the West was helping to foment the protests.

Significantly, even some Kremlin stalwarts like Vladislav Surkov, first deputy chief of staff in the Presidential Administration, expressed sympathy for the oppositionists’ cause: “To grant the sensible demands of the active part of society is not a forced maneuvre by the authorities but their obligation and constitutional duty.”³⁹ Putin’s longtime ally Aleksei Kudrin, who had recently resigned as finance minister, took to the stage at the December 24 rally and called for a rerun of the election and the dismissal of the head of the Central Election Commission. Even Medvedev, seemingly emboldened by the unrest to exert some independence from his mentor, Putin, proposed electoral reforms in his state-of-the-nation address on December 22. The measures that were subsequently adopted included: a simplified procedure for registering political parties, the restoration of single-mandate districts for half of the 450 Duma delegates, and a return to direct election of regional governors.⁴⁰

But Putin himself never came close to acknowledging that the protestors had legitimate demands, and he offset the concessions with repression. After he won re-election as president with a solid majority on March 4, 2012, there was a large protest march on the eve of his May 7 inauguration, and close to thirteen thousand policemen were called out. At least four hundred people, including Navalny, were arrested, with some getting stiff prison sentences. Once his third presidential term got underway, Putin introduced harsher punishments for unauthorized demonstrations and in 2013 signed a law that allowed regional legislators to decide whether to have direct elections for regional governors, thus watering down the 2012 reform. As Richard Sakwa wrote: “Putin did everything in his power to ensure that the electoral insurgency model of political change, operationalized as ‘colour revolutions’ elsewhere, would have minimal traction in Russia.”⁴¹

For all Navalny’s charisma, for all the bravery and determination of the protestors, Putin and his hardline siloviki prevailed. There were several reasons why Russia’s political unrest in 2011–12 did not turn into another Arab Spring, as Putin and his allies feared. The first is that the oppositionists did not have a united leadership with concrete, forward-looking goals. Navalny, the most popular among them, had been expelled from the liberal Yabloko Party in 2007 because of his alleged nationalistic tendencies. Second, protestors were mainly from the educated middle class, and half were under the age of forty, so they were not representative of the country as a whole. And finally, as in the past, the Kremlin controlled television broadcasting—still the main source of information for the majority of Russians—which had skilled propagandists who manipulated facts and persuaded audiences that protestors were lawbreakers supported by Western governments.

Berezovsky’s Rude Awakening

After the trial of his case against Abramovich ended, Berezovsky, convinced that he had won, turned his attention to protesting Putin’s upcoming election and inauguration for a third term as president. In mid-January, he posted on his LiveJournal blog an open letter to the Russian patriarch, Kirill, urging him to bring Putin to his senses and persuade him to give up power, He followed up with a letter to Putin, saying “Volodia, it is still within your power to avoid a bloody revolution.” Pointing out that Putin had “driven himself into a trap,” he urged Putin to leave the government immediately.⁴²

On February 1, Ekho Moskvy published an appeal from Berezovsky on its website with the heading “To Those Not Born in the USSR.” Addressed to Russia’s youth, the appeal urged the new generation to become “a legitimate force to overthrow the fraudulent thieves’ regime” and prevent the March 4 presidential elections. After leaders of United Russia complained and threatened legal action, the website removed the letter.⁴³ In late April, Berezovsky wrote a blog post offering a fifty-million-ruble award for the arrest of Putin, “a particularly dangerous criminal,” on the grounds that he was committing a crime in returning to the presidency. According to the constitution, Berezovsky wrote, Putin was not permitted to serve as president for a third term, and the Kremlin had produced no legal document to justify his doing so. Thus, in taking office, he was seizing power by force. The next month Berezovsky appealed on his blog to businessmen on the Russian Forbes list, saying it was time to stop “licking Putin’s boots” and support those rebelling against him.⁴⁴

The Kremlin predictably responded to Berezovsky’s provocations with more criminal charges against him at the end of May 2012—for calling on Russian citizens to carry out an insurrection.⁴⁵ The charges were meaningless, given that Britain would refuse to extradite Berezovsky, but they suggested that, no matter how outlandish Berezovsky’s appeals to Russians, they had drawn Putin’s attention. In fact, Putin might have been particularly sensitive at this time, given that his new term as Russia’s president had gotten off to a such shaky start.

Powerless to retaliate against Berezovsky through legal channels, Putin must have been pleased to learn of Justice Gloster’s final judgment in Berezovsky v. Abramovich, issued on August 31, 2012. The judge rejected Berezovsky’s allegation that Abramovich forced him and Patarkatsishvili to sell Sibneft holdings by threatening them. She determined that the $1.3 billion Abramovich paid was a lump sum to cover the krysha that the two men provided.⁴⁶ Having also decided that Berezovsky and Patarkatsishvili had no financial interests in Rusal, the judge concluded, “It follows that I dismiss Mr. Berezovsky’s claims both in relation to Sibneft and in relation to Rusal in their entirety.”⁴⁷

Justice Gloster had harsh words for Berezovsky: “The manner in which he gave, and the content of, his evidence also showed him to be a man with a high sense of his own worth, who was keen to portray himself as the central and indispensable figure in political and commercial events … I found Mr. Berezovsky an unimpressive, and inherently unreliable, witness, who regarded truth as a transitory, flexible concept, which could be moulded to suit his current purposes.”⁴⁸ The judge found Abramovich, by contrast, “a truthful, and, on the whole, reliable witness” and praised his courtroom performance: “He did not present himself in cross-examination as a ‘humble man’ or as someone who was attempting to appear likeable, or to be liked. Whilst his demeanour was reserved and restrained, he made no attempt to pretend that he was anything other than a highly successful and very wealthy businessman, who had made a very substantial fortune in the challenging Russian business environment of the 1990s and early 2000s.”⁴⁹

Clearly, Justice Gloster was influenced not just by what Berezovsky said but also by how he presented himself. Masha Gessen, who attended the trial, observed: “When Berezovsky was on the stand, he was emotional to the point of being overwrought—articulate yet ridiculous in his broken English, which seemed oddly suited to the broken reality he was attempting to describe.”⁵⁰ As the British journalist Luke Harding, a regular in the courtroom, pointed out, Berezovsky was at a disadvantage. Abramovich testified in Russian, with questions and answers translated into English for the court. This gave him extra time to reflect before he responded. Berezovsky, by contrast, chose to testify in his grammatically imperfect English, and thus responded more spontaneously, often without pausing to think about the impression he was giving.⁵¹ Also, while Abramovich had obviously prepared well for the trial, Berezovsky, according to Elena Gorbunova, “did not rehearse what he would say in court because he thought that by just being himself he would win.”⁵²

More importantly, as Harding pointed out, Justice Gloster and the British lawyers had little concept of the world in which Berezovsky and Abramovich operated: “The English High Court was not a place to understand the way the Russians did big business deals at this time. Russians had no legal tradition; their agreements were often made orally, without formal contracts, and payments were made in cash. Participants relied on political contacts and kickbacks just as much as they did on financial acumen. This world was completely alien to the British jurists.”⁵³ The judge, apparently unaware that television was a crucial Kremlin propaganda weapon, even refused to accept Berezovsky’s contention that Putin had intimidated him into selling ORT. Writing in The Guardian, Harding noted that “her finding prompted seasoned Russia watchers to guffaw.”⁵⁴

Mikhail Khodorkovsky, for one, said that he had no doubt that Berezovsky was indeed a Sibneft shareholder: “I could have testified at any moment that they were partners in the late 1990s. Moreover, it was Boris who invited Roman to join him. When the merger of Yukos and Sibneft was first mooted, they talked to me as partners. There was no talk of ‘political protection.’ They were 50–50 partners.”⁵⁵ Khodorkovsky was unable to testify, of course, because at that time he was in prison.

Gorbunova recalled that when she and Berezovsky were on the way to the High Court to hear the judge’s verdict Berezovsky received a telephone call from someone who said, “you are going to lose, and Abramovich has organized a party.”⁵⁶ Ignoring this message, Berezovsky arrived in the courtroom smiling and sure of a victory, saying: “I’m confident. I believe in the system.” Later, clutching his face and shaking his head, he listened to the judge repudiate his entire case and malign his character. But he insisted afterwards that he did not regret his lawsuit and left open a possible appeal, saying “sometimes I had the impression Putin himself wrote the judgment.” Abramovich, apparently knowing he would prevail, did not bother to show up for the verdict. He was reportedly in Monaco watching his team, Chelsea, in a match.⁵⁷

Berezovsky did not appeal, in part because he faced huge legal bills. His lawyers did call for an investigation of Justice Gloster, claiming that she should have recused herself from the trial because her stepson, Andrew Popplewell, had been Abramovich’s lead counsel when the case began and had prepared his initial defense claim in 2008. But Gloster had disclosed her stepson’s involvement earlier, and the defense had not formally objected, so there was little recourse at this point.⁵⁸

For all Berezovsky’s bravado, the outcome of the trial could not have been more devastating for him. He had not only lost a court battle; the trial reinforced his image as a corrupt oligarch who would stop at nothing to enrich himself. How could he continue to claim that he was a victim of the Kremlin and lead a credible campaign against Putin? As Aleksei Venediktov expressed it: “It was not about the money, but about the fact that the entire strategy of exposing the Putin regime that Berezovsky built for twelve years collapsed. If he had been awarded only one pound but the court had acknowledged that he was honest, then the transcript would be his testimony against the Putin regime and he would have made history. But that didn’t happen.”⁵⁹

In the Wake of Losses

By the time Berezovsky lost his case against Abramovich, Putin, back in the Kremlin as Russia’s president, was in full battle mode. The “Reset” with the West, which the Obama administration tried to initiate, had become a distant memory. NATO’s strikes against Libya, the war in Syria, and mass protests at home—which Putin accused the West of igniting—had led the Kremlin to a Cold War stance. Putin pointedly did not attend the May 2012 G8 Summit at Camp David, sending Medvedev instead. When he did meet with President Obama at the G20 summit in California in June 2012, the tension was obvious. They reached no agreement on pressing issues, such as the Syrian conflict and arms control. Obama had expected that Putin would be more amenable to improving relations with Washington after his election, but it was just the opposite.

Putin’s suspicions that the West was intent on toppling his regime had only intensified. In September 2012 the US Agency for International Development was ordered to leave Russia, and the next month two American organizations supporting fair elections were also forced out. For its part, Washington also sent signals that a reset with Russia was no longer in the cards. The US Congress adopted the Magnitsky Act, a bipartisan bill signed into law by a reluctant President Obama in December 2012, which sanctioned Russian officials responsible for the death of the Russian tax lawyer Sergei Magnitsky in a Moscow prison in 2009. The Russians retaliated by enacting a law banning American adoptions of Russian children. This cycle of mutual retaliation would continue.

Meanwhile Putin began throwing himself into preparations for the 2014 Winter Olympics, to be held in the Russian city of Sochi. This was not only a project to assert Putin’s and Russia’s greatness; it offered him an opportunity to enrich his friends—officials and businessmen like Arkady and Boris Rotenberg and Vladimir Yakunin—by awarding them construction contracts. The Kremlin had originally announced that the cost of the Olympics would be $12 billion, but according to a report published in May 2013 by Nemtsov and his colleague Leonid Martynyuk, the cost was approaching $50 billion, much of it consisting of embezzlement and kickbacks.⁶⁰ Far away in London, Berezovsky had urged Russians to boycott the Sochi games on his LiveJournal blog.⁶¹ But few of his countrymen would have paid attention, and this would be his last blog post. Eleven days later, the verdict in Berezovsky v. Abramovich was announced, draining Berezovsky of the fiery energy required to continue his battle against Putin.

In fact, October 2012 brought some good news for Berezovsky and for his friend Nikolai Glushkov. The two men had continued to be pursued by Russian prosecutors in connection with the Aeroflot case after Berezovsky left Britain. Glushkov, who had been released from prison in 2004, was convicted by a Moscow district court in 2006 of new charges for allegedly defrauding Aeroflot, causing him to flee immediately to Britain; the following year, Berezovsky was similarly convicted in absentia. Subsequently, Russian authorities aggressively pursued the financial assets of the two men, with some success regarding Berezovsky. In 2010, Russian prosecutors, working with a Swiss magistrate, managed to obtain on Aeroflot’s behalf more than $52 million of funds held by Andava, the Swiss company linked to Berezovsky. But when these prosecutors later went to a British court seeking to enforce a 2011 Russian monetary judgment against Berezovsky and Glushkov for fraud connected with Andava, they were not successful. On October 30, a British judge granted a request by the two defendants for summary judgment and dismissed the Aeroflot claim.⁶²

Berezovsky had also been convicted of alleged embezzlement of money from AvtoVAZ, for which in 2009 he had been sentenced by a Russian court in absentia to thirteen years in a penal colony. His former business partner Iulii Dubov was sentenced to nine years, also in absentia. Russian prosecutors had not been able to document the amount of the embezzlement, so charges were based more generally on what they called “damage.” Berezovsky dismissed the verdict as “an attempt by the [Russian] authorities to check the reliability of Great Britain as a place for asylum.”⁶³ Still, although Britain was protecting Berezovsky and his Russian friends from extradition, their physical safety was something that British authorities could not necessarily ensure.

The battles that Berezovsky had been waging against his Russian enemies took their toll on his relationship with Gorbunova. She had accompanied her partner of almost twenty years to the hearings in the Abramovich case and testified on his behalf, but Berezovsky had already become involved with a young Russian woman named Katerina Sabirova, whom he had first met in 2008, when Sabirova was only eighteen. At the end of 2011, he and Gorbunova discussed a financial separation, apparently amicably, and in January 2012, Berezovsky moved out of their Surrey estate, Wentworth Park. Three months later, they were forced to sell the estate. In December 2012, forty-five-year-old Gorbunova, now living in London with their two children, filed a lawsuit against Berezovsky claiming that he owed her $8 million, her share from the sale of Wentworth Park for $40 million. In addition, she claimed that Berezovsky was preparing to sell two properties in the south of France which he had promised to her. At Gorbunova’s request, the judge froze $317 million of Berezovsky’s funds. On January 23, 2013, Berezovsky’s sixty-seventh birthday, he contested the freeze in court. Although the judge said the sum of $317 million was inappropriate, he agreed in principle to a freeze, saying: “On the evidence, Mr Berezovsky is a man under financial pressure. It is likely he will feel a more pressing need to satisfy creditors than satisfy Ms. Gorbunova.”⁶⁴

Berezovsky was indeed under financial pressure. In 2011, he had paid $150 million to Galina Besharova as part of their divorce settlement and doled out large sums of money to lawyers working on the Abramovich lawsuit. After he lost the case, he was ordered to pay Abramovich’s legal costs, which amounted to $56 million. And, three weeks after the devastating verdict, when Berezovsky finally settled his case against Patarkatsishvili’s family, the sum was only $150 million, rather than the billions he had expected.⁶⁵ He had been forced to put his French properties on the market, and his treasured Andy Warhol painting Red Lenin was in the hands of Christie’s Auction House. His vintage 1927 Rolls-Royce would be the next treasure to go. Although in 2008 Berezovsky’s net worth was estimated at $1.3 billion, by early 2013 his financial straits were such that he was laying off staff members, including most of his security guards.⁶⁶

Ironically, Putin’s marriage was also on the rocks, though for him the stakes were political as well as personal. When he and Liudmila finally revealed in June 2013 that they were divorcing—after months of speculation—they portrayed it as an amicable and inevitable separation, caused by Putin’s devotion to his work. The Putins, who had not been seen together publicly since Putin’s last inauguration, had been attending a ballet at the Kremlin Palace when a reporter from the state TV channel Rossiia 24 asked them if rumors that they had separated were true. After Putin answered in the affirmative, saying it was a mutual decision, Liudmila interjected: “Our marriage is over because we barely see each other. Vladimir Vladimirovich is engrossed in his work. Our children have grown up. They live their own lives. We all do.”⁶⁷

The Putins’ announcement fueled rumors that had been circulating for years about Putin’s extramarital affairs with younger women. In 2008, while visiting Italian prime minister Silvio Berlusconi, Putin had even publicly denied allegations that he was involved with the gymnast Alina Kabaeva, then twenty-seven: “There is not a word of truth in which you say. I have always treated badly those who poke their noses and their erotic fantasies into someone else’s life.”⁶⁸ Whatever Putin’s indignation, there was a positive side to such rumors. They made the Russian leader seem more human. It was hard to imagine Putin, who never seemed to let his guard down, feeling emotion about anyone—except, of course, his political enemies.