ONE QUESTION, with two meanings, has bookended Vladimir Putin’s reign: who’s next? As he tamed Russia’s tycoons in the early 2000s, Moscow’s power-brokers wondered whom he would next dispatch to exile or prison. After the dismemberment of Ukraine, the question took on a new connotation: who will be next to suffer Western sanctions? In both cases, a name in the frame has been Mikhail Fridman.
According to a Russian proverb, notes Mr Fridman, you can never be sure you won’t go to prison or be a beggar. Still, he says, he never had an objective reason to fear jail—nor to fret over sanctions, which America imposed on Viktor Vekselberg, a fellow billionaire and his former partner, earlier this year. He describes as a “hoax” recent reports of surreptitious messaging, in 2016, between Donald Trump’s campaign and Alfa-Bank, which he controls. Likewise he denies the suggestion, in a leaked dossier prepared by a British ex-spook, Christopher Steele, that he gives foreign-policy advice to Mr Putin: “100% fake information”, he says.
But some in America’s Congress are keen to sanction more Russians; the Treasury has a classified list of potential targets which Mr Fridman might or might not be on. Robert Mueller’s probe into election meddling may prompt new moves. Mr Fridman’s predicament offers an insight into the relationship between business and power in Russia. And he poses a quandary for the West: how tightly to draw the circle of punishment around Mr Putin, and how to treat those in his orbit who might nevertheless be agents of progress.
Mr Fridman went into business as the Soviet Union crumbled. Moving to Moscow from Lviv, in western Ukraine, he ran a student disco called Strawberry Fields and started a window-washing enterprise. He bred laboratory mice (“we were not very successful”). Then he began importing Western goods and exporting oil, and founded his bank—classic oligarch gambits, though unlike others who earned that label, he did not take part in the loans-for-shares scheme of 1995-96, in which huge state assets were privatised for a song (though he tried to).
His fortune and reputation were cemented by his dealings with BP, which in 2003 formed TNK-BP with his consortium (including Mr Vekselberg). At a time when assorted Russian oilmen were courting foreign majors, says a Western businessman, Mr Fridman “was the only one able to sit down and negotiate a deal”. He was known as worldly, curious and courteous, as well as hard-nosed. “If he said he was going to screw you, get ready to be screwed.” However, “When he said it was done, it was.” By linking with BP, “he gave away half the upside” of his oil assets, says the Western businessman, but “secured the other half” from state predation.
The venture proved lucrative, but rancorous. Amid a dispute over strategy, Bob Dudley—then TNK-BP’s chief executive, now boss of BP—complained of “sustained harassment” and left Russia. Mr Fridman says the idea of a physical threat against Mr Dudley was “baseless”, as are allegations that his side enlisted the FSB, Russia’s security service. Yet “especially in a country like Russia”, he says, “where the rules of the game are not always very clear”, in general you “should be prepared for a fight”.
The first rule is that businessmen must stay out of politics. His property would be jeopardised, Mr Fridman says, if he became an “enemy of the state”. Equally, intimacy with the Kremlin can itself be risky; look at Boris Berezovsky, a consigliere who sought refuge in Britain. (He later died in odd circumstances.) “It’s the inevitable destiny of people who are too close to power,” Mr Fridman says. “We do not want to repeat this history at all.” He says he has “never ever seen [Mr Putin] one on one”. Anders Aslund, a Russia-watcher at the Atlantic Council, a think-tank, reckons Mr Fridman is now “as far from Putin as you can be and still be a multi-billionaire in Russia.”
Thus far, perhaps, but no farther. Mikhail Khodorkovsky—a mogul who fell out with Mr Putin and spent a decade behind bars—thinks “you can’t have a big business in Russia and not be obliged to provide services to the Kremlin at any moment.” Mr Fridman, he observes, “has never had a particularly warm relationship with Putin personally, but sustained one through his partner, Peter Aven.” Mr Aven was a minister in the 1990s, when Mr Putin worked on economic policy in St Petersburg.
As Mr Fridman puts it, his rule is to remain in “the second row”, a position that still affords “crucially important” access to the Kremlin. Sometimes he makes donations to state projects—for the winter Olympics or a school in Sochi—though never more than a few million dollars, he says. And he refuses to comment publicly on the diplomatic bust-ups that have led to sanctions (such as over the annexation of Crimea in 2014, election-hacking and the poisoning of Sergei Skripal in Britain). Since he is active in the countries involved, Mr Fridman says, somewhat self-servingly, weighing in would be irresponsible.
Russia’s interference in Ukraine is a particularly sensitive issue for Mr Fridman. A jazz festival sponsored by Alfa Bank in Lviv, his home town, was renamed after the bank’s role caused anger in both countries, though Mr Fridman suspects a protest at his Moscow office was organised by a disgruntled debtor.
Until now, Mr Fridman has skilfully negotiated the hazardous terrain between dissident and henchman. Of the cadre of Russian businessmen who scrambled to dizzying wealth in the bare-knuckle 1990s, then rode the rollercoaster of Mr Putin’s long rule, some have died and others have fled. Mr Fridman is still standing. And prospering: when Rosneft bought TNK-BP in 2012, his outfit’s share was $14bn.
Mr Fridman says that these days he spends only around 30% of his time in Moscow. He is less litigious than when he was “young and naive” (though he is suing several parties over the Steele dossier). But in an era of strained relations and suspicion, the equidistance is hard to maintain: just close enough to power looks too close to some. In the West, Mr Fridman knows, people assume that tycoons like him are “agents of influence”.
Meanwhile, the tricky balancing act has incurred another, more personal cost. In 2015 Boris Nemtsov, an opposition leader, was assassinated outside the Kremlin. Mr Fridman counted Nemtsov among his “closest friends”; but “any contact with him could be interpreted as a kind of support,” which would “not [be] very useful for doing business”. So Mr Fridman stopped speaking to him. “I regret that heavily,” he says now. “I did not know there was no future for our relationship.” In Mr Putin’s Russia, some things cannot be put right.