BusinessWeek: January 11, 1993

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RED-HANDED RUSSIA

RUSSIA'S SECRET RULERS

By Lev Timofeyev

Knopf -- 177pp -- $21



If ever there were a cure for naivete, it's Lev Timofeyev. When I worked in Moscow, I would occasionally walk past the usual KGB surveillance car and take the noisy elevator up to Timofeyev's apartment. There, the bearded economist, dissident, and underground publisher would proceed to knock out of my head some of the sillier ideas about Gorbachev, glasnost, and perestroika.

If you want the same treatment, read Russia's Secret Rulers: How the Government and Criminal Mafia Exercise Their Power. In it, Timofeyev reminds us how corrupt the communist system was. Moral decay was so pervasive, he says, that it will be nearly impossible for the Russian people to build a democratic society and a free-market economy. The necessary values--the rule of law, equal opportunity, trust, and honesty--were long ago snuffed out.

Of course, Timofeyev writes, there always was a kind of free market in the Soviet Union: Everything from local party posts to state allocations of building materials was for sale. And virtually every former and current leader, including Gorbachev and Yeltsin, grew up in and took part in that environment.

Timofeyev knows what he's talking about. While imprisoned in the mid-1980s for publishing unorthodox articles on economics, he had a cell mate named Vakhab Usmanov, an Uzbek official who was later executed for bilking Moscow out of millions of rubles in an elaborate scam involving overcharges for cotton shipments. When prosecutors told Usmanov to list everyone he had bribed, he soon provided more than 400 names.

In Timofeyev's view, it's ridiculous to expect massive sell-offs of state-owned assets, a key element of Yeltsin's reforms, to be carried out honestly. The same officials who crookedly administered state property, he says, will arrange for it to be sold to them. Already, cynical Russians have invented a biting wordplay for the privatization campaign. It's not privatizatsia, they laugh, it's prikhvatizatsia--to grab.

Timofeyev doesn't really deliver the expose promised by his subtitle, and his use of a question-and-answer format is annoying. Still, his downbeat message is an intriguing explanation of why it is so hard for Russia to proceed with reform.

PETER GALUSZKA
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