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People watch the storming of the Supreme Soviet ("White House") in Moscow during the
Russian constitutional crisis of October 1993. Photo: Dmitry Borko/Grani.ru

Bendukidze's wealth, as compared to the assets of Russian billionaires, was relatively modest, with most estimates placing it in the range of 50 to 70 million USD in 2004.[83] In a recent interview, he jokingly called himself a "mini-oligarch" at best.[84]

However, Kakha Bendukidze was always more than simply an investor and manager. In a 1996 ranking produced by the polling agency Vox Populi, Bendukidze was ranked 33rd among Russia's top 50 most influential businessmen wielding the biggest influence on government economic policy.[85] A 2004 article in Kommersant credited Bendukidze with being the first to "realise the need to create a lobbying structure that would be able to promote the interests of big business in a civilized way."[86] Bendukidze cared about politics and he had ideas about the way the Russian economy ought to develop.

In 1992, together with Mikhail Khodorkovsky, soon to become Russia's most famous oligarch, and Vladimir Gusinsky, a future media baron, Bendukidze became one of the founding members of the Entrepreneurial Political Initiative-92 (EPI).[87] The group was formed in December 1992 amidst a mounting conflict between President Yeltsin and the Supreme Soviet.[88] The EPI sought to be "a respectable force" on the right of the political spectrum which would help avert the escalation of civil conflict in the country.[89] Although EPI did not exist very long, it was one of the first attempts to achieve political representation for business in Russia.[90] In December 1993, Bendukidze also ran unsuccessfully for the Duma as a member of the entrepreneurial political bloc Transformation.[91] And in 1993, Kakha Bendukidze joined Ivan Kivelidi, a major financier, in creating a lobby group called the Round Table of Russian Business.

Mikhail Khodorkovsky
Mikhail Khodorkovsky. Photo: unknown

In the Russia of the 1990s, business was a dangerous activity; combining business with politics, even more so. Several colleagues of Bendukidze's in the Round Table were murdered in contract killings, including, in 1995 alone, Vladislav Listyev, a famous Russian journalist; Oleg Kantor, President of Yugorsky Bank; and Ivan Kivelidi himself, chairman of the group.[92] In 2000, Paul Klebnikov, the editor of Russian Forbes, wrote about this murder:

"One of Russia's most respected businessmen, Ivan Kiveldi, a major chemicals industrialist, chairman of Rosbusiness Bank and founder of the Russian Business Roundtable, was disposed of in particular gruesome fashion. Someone rubbed an obscure nerve toxin onto the telephone receiver in his office; he collapsed, frothing at the mouth, and died three days later. Murder had become a form of dealing with business competition."[93]

Several years later, the new managing director of Uralmash, Oleg Belonenko, would be shot as well.[94] The full details of all the murders still remain unknown. In July 2004, Klebnikov himself would be slain in a contract killing in Moscow, which remains unsolved.

In a 1996 interview, Bendukidze said that he once used to ride in a "bullet-proof jeep" and complained that having security guards was a burden: "Security guards really do have an impact on my life. It's like being in the grip of a vise, and you feel like a part squeezed inside of it. It's like being under house arrest, only the name is different … The house where I live is just a normal house. But the entire house is guarded. This was my neighbour's idea."[95] When asked by a Kommersant interviewer at the time about the best way to deal with the rampant criminalisation of Russian society, Bendukidze argued for tough measures:

"Shoot all the bandits. The only way to stabilize the situation is through a harsh authoritarian regime aimed at the transition to the normal economy, aimed at freeing people from slavery and at developing democracy. A kind of a Taiwanese-Chilean way, so to say."[96]

 


[83] Mikhail Berger, "Khuatsyo Bendukidze" (in Russian), Ezhenedelnyy Zhurnal, no. 123, 8 June 2004.

[84] Dmitry Bykov, "Russia Will Change When I Become Slimmer" (in Russian), Profile, no. 4 (607), 9 February 2009.

[85] "Interfax Publishes a Ranking of Russia's 50 Most Influential Businessmen" (in Russian), Interfax, 12 January 2006.

[86] Vera Sitnina, Irina Sklyarova, Mikhail Vignansky, Semyon Novoprudsky, "Capitalist Drain: Kakha Bendukidze Trades Business in Russia for a Ministry in Georgia" (in Russian), Vremya Novostey Online, no. 94, Jun. 2, 2004.

[87] "Kakha Bendukidze: Biography" (in Russian), Newsru.com, 3 November 2005.

[88] Russian Professional Portal on Lobbyism and GR, "Personalities: Vladimir Lepekhin" (in Russian),

[89] Aristarkh Vladimirov, "A New Initiative of the Business Circles: The Coalition Will Join a Neoconservative Political Bloc" (in Russian), Kommersant, no. 037, 2 March 1993.

[90] Aristarkh Vladimirov, "A New Initiative of the Business Circles: The Coalition Will Join a Neoconservative Political Bloc" (in Russian), Kommersant, no. 037, 2 March 1993.

[91] "Kakha Bendukidze: A Biography," FactNews, Nov. 3, 2005.

[92] "Dead and Alive: On the Murders of the Members of the Round Table of Russian Business" (in Russian), Kommersant, no. 161 (879), 2 September 1995.

[93] Paul Klebnikov, Godfather of the Kremlin – The Decline of Russia in the Age of Gangster Capitalism (New York: Harcourt, Inc, 2000), p. 32.

[94] Patrick Cockburn, "Gang shoots dead businessman who confronted mafia," The Independent, 11 July 2000.

[95] "Каха Бендукидзе: империя, рожденная вирусом" (Kakha Bendukidze: An Empire Born of the Virus). Kommersant Dengi, no. 37 (97), 16 October 1996.

[96] "Coolness Won't Help You Dodge the Bullet" (in Russian), Kommersant, no. 149 (867), 17 August 1995.

Suggested readings

Bendukidze is listed as one of the top 20 oligarchs in Russia in "Ownership concentration in Russian industry" by Sergei Guriev and Andrei Rachinsky (2004), published by the Centre for Economic and Financial Research (CEFIR) at the New Economic School (NES).

In an interview with Kommersant (dated 1995), entitled "Being Cool Won't Help You Dodge the Bullet" (Крутизна на траекторию пули не влияет), Bendukidze spoke about the rise of criminality in Russia in the 1990s and the striking increase in the number of contract killings of businessmen, whose casualties included some of his colleagues in the lobby group Round Table of Russian Business. He advocated harsh measures, saying that one can only deal with the situation in Russia by "shoot[ing] all the bandits." In his opinion, a "tough authoritarian regime" of the "Taiwanese-Chilean type" would be necessary for a transition to normal economic development and for curbing rampant criminality. Bendukidze also noted that it was impossible to do business legally in Russia without fear of being killed over some dispute.

A description of Russia's wild capitalism can also be found in Paul Klebnikov's Godfather of the Kremlin the Decline of Russia in the Age of Gangster Capitalism (2000). He notes about Russia's early capitalism that:

"Russia's new businesses were pushed into the world of organised crime by the corruption of the government apparatus, which meant that commercial success was overwhelmingly dependent on political connections. Businessmen were hampered by a crushing tax code which impelled enterprises to conduct business off the books and the absence of an effective legal system …" (p. 30)

As for privatisation:

"By the end of 1993, when Russians actually were able to use their vouchers, inflation and devaluation of the ruble had destroyed 95 percent of the voucher's face value, and Russia's industrial and natural-resource wealth was valued at a mere $5 billion." (p. 130)

Bendukidze achieved success in Russia and became known for his commitment to liberal economic policy, which he promoted in various political and economic forums. To get an idea of how Bendukidze was viewed in Russia around the time he left for Georgia, Vitaliy Tretyakov's June 2004 article in Rossiiskaya Gazeta, published under the title "Bendukidze's Mission "Миссия Бендукидзе" is particularly useful.

April 2010

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15 April 2010, 00:00