Of course, doing so was flagrant theft from state factories, but at the time it was considered a normal feature of post-Soviet life. People were starving, and, to feed themselves, half the country robbed the other half, to nobody’s surprise. People were surviving as best they could; their efforts were considered to be business, which was what we had been dreaming of.
The point of buying the liquor was that the spirit, which cost virtually nothing, could be diluted with water, poured into bottles and sold instantly as cheap vodka. Excise duty had not yet been thought of, and the police, even if they had wished to do anything, were powerless in the battle against Palenka. In any case, they did not wish to interfere, since they, too, preferred survival by any means available, which meant participating in illegal business. The underground vodka purveyors paid the police to protect them from their competitors.
This was when Pashka Fedulev, crook and bootlegger, first made the acquaintance of Nikolai Ovchinnikov, police officer. Like everybody else at the time, Ovchinnikov was eager for money. Police officers’ wages were wretched, and frequently not paid at all. So Pashka and Ovchinnikov apparently came to an understanding. The officer would not notice what Pashka was doing, and Pashka, more successful by the day, would not forget Ovchinnikov. The policeman began to have more than enough for his daily bread and butter.
The moment finally arrived when Pashka’s accumulated capital was sufficient for him to start playing a bigger and, more important, legal game. His trajectory has been typical in Russia: just as every soldier dreams of becoming a general, so every little crook dreams of graduating into legal big business.
It was, and still is, a peculiarity of the economy that there are three conditions for success in big business. First, you have to initially get a slice of the state pie—that is, a state asset as your private property. This is why the vast majority of big businessmen in Russia are former members of the Communist Party nomenklatura or the Young Communist League, or were party workers.
The second condition is that, once you have been successful in appropriating state assets, you stay close to the government—that is, you bribe, or feed, officials regularly. The kickbacks should guarantee that your private enterprise will prosper.
The third condition is to make friends with (i.e., bribe) the law-enforcement agencies.
Not being in a position to meet the first condition in the early days, Fedulev nonetheless concentrated on the second and third.
THE FORCES OF LAW AND ORDER
A certain Vasily Rudenko, deputy director of the Yekaterinburg’s Criminal Investigation Unit and a friend of Ovchinnikov, lived in the city. Everybody knew Rudenko, whose position required that anyone who wanted to succeed in business needed to keep on his good side. Rudenko weeded the personal files of new businessmen (and erstwhile gangsters), in effect relieving them of their criminal pasts.
Fedulev, too, was drawn to Rudenko. This period was not the most straightforward in Pashka’s life. He had already made a reputation in Yekaterinburg as a liquor baron and was being invited to sponsor local almshouses and orphanages. He was flying to Moscow for weekends to enjoy the nocturnal entertainments now provided there, taking with him (a special privilege, testifying to his intimacy with the authorities) officials of the provincial administration. As a result, it was time to set about cleaning up his image. Pashka no longer needed to have the documentary record of his criminal past preserved in the archives of the Yekaterinburg police.
No sooner decided upon than done.
Fedulev was introduced to Rudenko by a man named Yury Altshul. All who knew Altshul remember him warmly, even with admiration. Not originally from the Urals, he had been sent there by the motherland. Altshul was a soldier, a military spy; he had arrived in the Urals as captain of a special operations company of the GRU (the Central Intelligence Directorate of General Headquarters, Russia). The unit had been pulled out of Hungary after the Berlin Wall came down, when the army group in the west was disbanded.
Altshul retired from the army and stayed on in Yekaterinburg. The country was not paying its servicemen, and Altshul couldn’t wait to go into business. Like many other members of special units who left the army at that time, he set up a private security service, as well as a private detective agency and a charity for veterans of special units.
In Russia there are many such organizations, built on the ruins of the army. Any large city has its veterans, whose main occupation is to protect its traders. Fedulev thus became one of Altshul’s clients, and it was the former GRU officer who helped Pashka, through the agency of Rudenko, to delete his picaresque past from the computer database of the Yekaterinburg police. Pashka’s wish had come true.
Altshul was soon not only Fedulev’s bodyguard but his trusted lieutenant. It was he—astute, decisive, and educated, unlike Fedulev—who introduced the latter to the Urals stock market. Pashka soon found his footing there and became an adept player. Because he was short of money, he allied himself with Andrey Yakushev, famous in the mid-1990s as director of the Golden Calf, a successful Urals company.
Together with Yakushev, Fedulev was successful in buying up the shares of a number of enterprises, including the Yekaterinburg Meat Processing Factory, the largest such operation in the Urals. The scale of the meat deal brought Pashka to within an inch of the status of a Yekaterinburg oligarch, with corresponding access to the provincial governor, Eduard Rossel.
At this point it became evident that Fedulev did not like to share success. He was able to form alliances to overcome difficulties but was unwilling to include others in the financial and social spoils. Now, for the first time in his career, word got out that he had hired a hit man, and the mood in Yekaterinburg became ominous. People were afraid of Fedulev, recognizing that he had outgrown his earlier limitations. That is how it is in Russia now: you kill someone, you gain respect.
Around this time, Fedulev borrowed a large sum of money from Yakushev for another deal. Although the transaction yielded a profit many times in excess of the stake, Pashka categorically refused to repay the debt. Yakushev wasn’t pressing him, but in any case he had no opportunity to do so: on May 9, 1995, in the entrance to his own house, in front of his wife and child, Andrey Yakushev was shot dead.
A criminal case? Well, yes. A case was opened, and it even has a number: 772801. The prime suspect was said to be Fedulev.
Then what? Then nothing. A case with this number sits in the archives to this day. It is still open, in the sense that nobody investigated it or is currently looking into it. There were to be other similar cases involving Fedulev in the years to come, and every time the same thing happened—or, rather, didn’t happen. Everybody in Yekaterinburg who had any involvement with Fedulev knew that he had made his most profitable investment yet: he had bought the city police force, and it would henceforth loyally shield him from any awkwardness.
This is the period when Rudenko and Ovchinnikov became Pashka’s constant partners. They helped him to grow into a new Urals industrialist and to increase his fortune. It appears they may have used the technique that had been tried out on Yakushev.
One day Fedulev offered to cooperate with another Yekaterinburg oligarch, Andrey Sosnin. Fedulev and Sosnin pooled their financial resources and pushed through a speculative campaign on the Urals stock market that to this day remains unparalleled in its size. Sosnin became the owner of a controlling share in the region’s prime enterprises—in effect, of its entire industrial potential, which had been created by several generations of Soviets, beginning during the Second World War, when the largest and most important factories of the European part of the Soviet Union were evacuated to the Urals. Among the enterprises of which Sosnin and Fedulev gained a significant measure of control as a result of their speculative coup were the Nizhny Tagil Metallurgical Complex and the Kachkanar Ore Enrichment Complex (both of international renown), Uralkhimmash, Uraltelekom, the Bo-goslovskoe Ore Agency, and the three hydrolytic factories in the towns of Tavda, Ivdel, and Lobva.