In 1999, however, Vasily Leon showed his defiance. But then, in December of that year, Yevgeny Antonov, an agent from Skvortsov’s entourage, claiming self-defense, shot Leon’s chief assistant, the very person who supervised the wholesale marketing of liquor at the Lobva factory. According to the official written statements about the events leading up to the shooting of his colleague that Leon made to the FSB in the aftermath of the killing:
In mid-January [2000] I had a conversation with Sergey Vasiliev, departmental head of UBOP. He complained stridently that by my presence at the Lobva factory I had deprived UBOP of financing. He further said, “You have stolen the Trough of the FSB, UBOP, and other security agencies of the province.” Vasiliev categorically demanded that I should work with them. I asked what that work would consist of, and Vasiliev replied, “You are to bring money here!”
Every line of Leon’s statements testifies to a criminal case that should at least have been opened. Once again, however, things got bogged down. Appeals by Leon to the prosecutor general’s office, the Ministry of Internal Affairs, and President Putin himself produced not the slightest reaction.
Nevertheless, great concern was shown for the fate of Fedulev. In January 2000, on the personal instructions of Vasily Kolmogorov, deputy prosecutor general of Russia, Fedulev was freed from prison. Just like that.
On his return to Yekaterinburg, the authorities welcomed him like a conqueror. Governor Rossel showered favors upon him. On Rossel’s initiative, Fedulev was declared Urals Entrepreneur of the Year. Following his spell in jail, the shooting of Altshul, the intimidation of Leon, and the murder of his colleague, Fedulev had attained the exalted status of Yekaterinburg’s leading industrialist. From this time on, the mass media of the Urals invariably used this formula when writing about him. A little later, Fedulev was elected a member of the Provincial Legislative Assembly, thereby receiving parliamentary immunity.
If we step back a bit and look at the bigger picture, what do we see? Fedulev is a Urals oligarch, a member of the provincial legislature, a major property owner. What really matters, though, is that he is the founder of what the Russian criminal code calls an organized crime syndicate. By the autumn of 2000, when Uralkhimmash was seized, which is where we came in, Fedulev’s syndicate had all the attributes of a fully fledged Mafia entity. The only snag was that, with Russian corporate law, at best, unclear, the godfather was in prison, and while he was there, his factories and industrial complexes started slipping out of his control. The syndicate panicked: “What about our money?” At that point, Fedulev was released.
THE NEW DEAL
Fedulev’s release from prison was a turning point in the modern history of the Urals. As soon as his release became public, even before he returned to Yekaterinburg and before his countless hugs from Rossel, those in the know realized that matters were not straightforward. There was going to be a redistribution of property, and Fedulev was expected to make it happen. He had been released for good reason—certainly so that he could get back what he had controlled before but also so that those working for him (and perhaps whoever he was working for) should again receive their remittances.
Fedulev did not disappoint his supporters. His first priority on being freed was to restore his control of the Lobva Hydrolytic Factory.
Here is how he did it. As Vasily Leon put it in a statement to the FSB: “Fedulev informed me that previously matters had been resolved through the law courts: privatization, acquisition of shares. Now, however, things were settled by force.”
Leon’s statement is dated February 2000. At that time, he presented the FSB with a written request for help to resist the Mafia. He asked to be protected from blackmail by an organized crime syndicate. First, he was being blackmailed by members of the provincial UBOP, who were pressuring him to leave the Lobva factory in favor of Fedulev. Second, he was being blackmailed by Fedulev himself, who, on his release from prison, demanded not only that Leon leave but that he should pay Fedulev $300,000 in compensation.
Leon’s request went unanswered. The state renounced the rule of law and left the factory to be torn apart by the Mafia.
On February 14, 2000, Fedulev decided to set up a committee of creditors of the Lobva factory. He did so by personal invitation despite having no legal authority. His aim was to push out the factory’s current management and replace it with one under his control.
Of the five principal creditors, Fedulev managed to bend only two to his wishes. A forged proxy then appeared from a third creditor, thereby providing a quorum. This committee adopted the resolution Fedulev required: that the meeting of creditors should be held not in Lobva but in Yekaterinburg, at Fedulev’s office. Nobody made any bones about why it had to be held there. If some of the real creditors suddenly turned up, they would need to be stopped, and cordoning off the office would make doing so a simple matter.
As the day of the meeting approached, Rudenko flew in from Moscow. The main issue he and Fedulev needed to resolve before the meeting was what to do about Leon.
Twenty-four hours before the meeting, on February 17, Fedulev sent a couple of his employees to the UBOP. These two gentlemen were well known there, because for many years they had been coming in for questioning as suspected hit men in the sluggish investigation into the murder of one of Fedulev’s partners. On this occasion these heavies wrote a denunciation to the UBOP claiming that Leon had extorted $10,000 from them. In a single hour, with a rapidity unheard of in the Russian legal system, a criminal charge was brought against Leon, naturally without any preliminary investigation, recorded interview, or checking of facts. Simultaneously, a police car was cruising the streets of Lobva giving out flyers to the effect that Leon was evading arrest and could no longer be regarded as the factory’s managing director.
The day of the creditors’ meeting in Fedulev’s office arrived. Everything began, quite properly, with registration. The entrance, corridors, and offices were under the control of men in police uniform armed with assault rifles, the guys from the UBOP. Seemingly nothing could derail Fedulev’s strategy.
But then something unforeseen did happen. Galina Ivanova, the representative of the factory’s trade-union committee, who had a right to be present at the meeting on behalf of the factory’s workforce, suddenly pulled a power of attorney out of her handbag. It was an immensely valuable proxy from the main creditor; Leon, while on the run, had found time to prepare it. The proxy represented 34 percent of the votes, so how Ivanova voted would determine the outcome.
Fedulev gave the order and Ivanova was removed to the UBOP offices, by plainclothes UBOP officers mingling with the crowd in the hall. She was held for precisely three hours and twenty minutes, until Fedulev called to say that the registration had been completed.
Alexander Naudzhus was Vasily Leon’s deputy. Here, taken from his official statement to the FSB, is how he describes events during the night after the meeting:
I arrived at the factory at about 22.30. At about 1.30 I went to sleep. At 4.30 I was awakened. The door to the factory management offices had been broken down, also the grilles on the windows. There were a lot of armed people around, and about 30 cars and a bus. We were allowed through to the management offices, where the factory’s security officers were standing with their hands up. They were being guarded by people with assault rifles and wearing police uniforms. Oleshkevich, a UBOP lieutenant, was sitting at the table. I went into the office of the commercial director. Fedulev was sitting there. I asked, “On what grounds has this occupation taken place?” I was shown the minutes of the creditors’ meeting and the contract with the new director. The contract was unauthentic.