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TFI Daily News

World News for World Changers

Dec 14

Russian Mogul Joins the Race Against Putin

By Ellen Barry and Andrew E. Kramer, NY Times, December 12, 2011
MOSCOW—There were no balloons or streamers at the hastily arranged news conference on Monday where Mikhail D. Prokhorov announced that he would challenge Vladimir V. Putin in this spring’s presidential elections: just Mr. Prokhorov on the podium, looking grave.

Mr. Prokhorov, the billionaire who is majority owner of the New Jersey Nets basketball franchise, became famous in Russia as a playboy, with the tabloid nickname “the Holiday Man.” He has long walked a fine line in his relationship with the Kremlin, maintaining a degree of independence while rebels among his fellow oligarchs ended up in exile or in prison.

Mr. Prokhorov’s announcement, which prompted gasps from reporters in the room, was the latest wild card in a week that seemed to return real politics to Russia. Tens of thousands of middle-class urbanites gathered Saturday to vent their anger over tainted and noncompetitive elections. Aleksei L. Kudrin, a longtime Putin adviser and former finance minister, declared Monday that he plans to help found a party to represent reform-minded voters.

Mr. Prokhorov, 46, has the resources to pose a real challenge to the Kremlin if he chooses. Over the years, he has sometimes made accommodations—like firing the editor of a newspaper he co-owned that had obliquely criticized Mr. Putin. Other times he has pushed back, as in September, when he clashed with Kremlin political strategists and was unceremoniously kicked out of his pro-business party, Right Cause. He spent the next two and a half months in a kind of political exile, until Monday, when he said he would run for president.

"I think the society is waking up, whether we want it to or not," he said. "That part of the government which does not establish dialogue with society, it will have to go in the near future. Serious changes are taking place in the world, and a new kind of man is emerging."

At his news conference on Monday, Mr. Prokhorov offered no political platform, saying he would publish it later. He said his long period of seclusion had been spent doing the secret, meticulous work of preparing for a bid for the presidency. When he said entering the race was the most serious decision of his life, it sounded like the truth.

Mr. Prokhorov’s relationship with the Kremlin has been a cipher for years. He became wealthy in his 20s, aided by warm ties with the government of President Boris N. Yeltsin, when he formed a fortuitous partnership with Vladimir O. Potanin, a deputy prime minister who oversaw privatization.

They bought shares in one of the assets being privatized, the Norilsk mine and smelter complex in the Siberian Arctic, a grim, polluting site first built by slave labor. It was also immensely valuable, the source of one-fifth of the world’s nickel and half its palladium.

Those were the days when oligarchs seemed poised to rise to the highest levels of politics. Their position became strained when Mr. Putin came to power in 2000, vowing to eliminate the oligarchs “as a class,” instead surrounding himself with former security agents.

At a now-famous Kremlin meeting, Mr. Putin told the oligarchs they could keep their fortunes if they stayed out of politics.

Mr. Prokhorov and Mr. Potanin made accommodations. In 2004, the pair fired the editor of a newspaper they owned, Izvestia, for publishing criticisms of Mr. Putin’s handling of the Beslan siege that year, in which militants took more than 1,000 hostages at a school. More than 300 people were killed when explosions rocked the school and Russian forces raided it.

A few years later, Mr. Prokhorov seemed to fall out of favor, amid reports he was declining to sell his shares in Norilsk back to the government during a wave of nationalizations championed by Mr. Putin.

He was compelled to sell after an embarrassing arrest in the French ski resort of Courchevel, when authorities investigated allegations he had made prostitutes available to his guests at a holiday party. Coverage of the episode contrasted his otherworldly wealth with the hardships of his Siberian miners. Mr. Prokhorov spent four days in jail, but was later cleared of all charges.

He has since embraced his playboy image with self-deprecating humor, founding a magazine called Snob.

In the end, he sold his Norilsk shares to another businessman, not the state, and serendipitously—at the peak of the market. He entered the global recession mostly rich in cash, but with an uncertain future in Russia.

Though Mr. Prokhorov was formally endorsed by the Kremlin to lead a liberal party last spring, difficulties followed soon enough, leaving his true standing in the eyes of the leaders unclear.

When he was elected leader of the Right Cause party in June, pro-Putin youth activists parodied his arrest in France by yoking a line of leggy young models to a cart carrying a businessman. Days before his ouster from the party in September, police officers in masks raided one of his banks in Moscow in a ritual show of force sometimes inflicted on Russian businesses that fall from favor, called a masky show. The bank said the raid concerned a client’s legal troubles.


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