How do you get half a billion dollars back from Russian crooks? There’s only one way. You pay protection money to the Russian Mafia, which is exactly what the former Anglo-Irish Bank, is doing. After the Quinns’ shenanigans, attempting to put assets beyond the reach of IBRC by hiving them off to something called IPG, the International Property Group, which controls up to €400 million, IBRC found itself stuck in a quagmire of shady legal detective work and dodgy Russian lawyers. Anglo recently lost control of the €180 million Kutuzov Tower in Moscow after a Russian court reversed a previous decision, and now it feels it has no option but to enlist the help of a strong local partner.
For strong local partner, read The Sopranos multiplied by a thousand. These guys are worth €50 billion and they have annual profits of €2 billion. They don’t just do Construction and Refuse like your average New Jersey mobster. No. According to their website, they have a banking presence in Russia, Ukraine, Belarus, Kazakhstan, the Netherlands, Cyprus, the United States and the United Kingdom. That division has 23,0000 employees, 70,000 corporate clients and nearly 7 million individual customers, and that’s just the bank. Their oil business is worth €4 billion, employs 50,000 people in Russia and Ukraine and pumps 2 million barrels of oil a day. They own 3,000 supermarkets, the biggest telecomms network in Turkey and they supply water to eight cities in Russia and the Ukraine.
Alfa, of course, was set up by the seemingly endless stream of oligarchs who emerged under Boris Yeltsin, obscure people with no major wealth, who suddenly became owners of vast oil, gas and mineral resources.
Alfa is a consortium of four such men: Mikhail Fridman, Len Blavatnik, Viktor Vekselberg and German Khan.
Fridman started his career by scalping tickets. He founded Alfa Group in 1989 at the age of 25 with few visible assets but is now worth about €12 billion in personal wealth.
Blavatnik is a Russian American who, at the age of 29, founded Access Industries and made diversified investments in Russia just after the collapse of Communism. His personal worth is about €8 billion, give or take.
After working as a State employee for many years, living on a State salary, Viktor Vekselberg prospered when Yeltsin took power, becoming joint owner of TNK, one of the biggest oil and gas corporations in Russia. He made his first million selling copper from old cables, but now owns a collection of Fabergé eggs. Vekselberg is worth about €10 billion.
German Khan is a colourful character. Director of the TNK-British Petroleum joint venture, he’s reputed to enjoy Berlusconi-style bunga-bunga parties at his hunting lodge. According to the BP chief operating officer, Khan believes The Godfather is a manual for life. He claimed that Khan once turned up for dinner carrying a chrome-plated pistol.
That’s Alfa Group for you.
This isn’t Martin Foley, the Viper, we’re talking about. This isn’t Harry Dean Stanton, the Repo Man, flinging dead rats into open-topped convertibles.
It isn’t, for that matter, poor Seán Quinn either. Although he might have been the richest man in Ireland, it’s doubtful if these oligarchs would have let him wear a cap and drive their limos.
So what’s the deal? Well, the Russian Mob get 35 cents on the euro for everything they “recover”, but not only that. They get to keep the first €25 million.
Remember now, this isn’t some abstract non-money arrangement like the contracts-for-difference that Sean Quinn and his brood were gambling with until it all went tits up and they had to pay the bookies. No. This is real hard cash, but more to the point, it’s our hard cash, thanks to the insane and juvenile decision by Lenihan and Cowen to nationalise Anglo. In other words, a State-owned corporation, IBRC, has agreed to pay ransom money to the Russian Mafia so that we can get some of our funds back, after the Quinns gave control of them to an assortment of crooks, chancers and frauds. Why was that done? So that we, the taxpayers would not be recompensed for our bailout of the banking investors and the Quinn family could hold on to assets they did not own, paid for by you and me. If Alfa “recover” €400 million, we’ll get €260 million of it, less the €25 million. In other words, we’ll get €235 million, which is a little under 59 cents on the euro. We lose 40% of our money one way or another thanks to the Quinns.
Got that? Good.
Meanwhile, poor old Sean languishes in the training unit of Mountjoy for failing to comply with the instructions of an Irish court, as well he might. If I gave the finger to the district court, I’d find myself in the slammer, never mind telling the High Court to get stuffed. The question is simple: are we all obliged to obey the courts or are some of us exempt? It looks like the Quinn family believe themselves to be above that sort of law, a bit like Leona Helmsley, who notoriously remarked that taxes are for the little people. Maybe in Quinnworld, obeying the law is for the little people as well, but the rest of us are paying through the nose for that sort of hubris.
Not only are we paying higher taxes to cover the Anglo bailout, but also an insurance levy to cover the cost of the Quinn Direct mismanagement, and let’s not forget that €105 million or so we’ll be paying the Russian Mafia to unpick the Quinns’ shenanigans in the former Soviet Union.
Meanwhile, they’re protesting in Cavan.