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How Anna Chapman Became the Face of Kremlin Capitalism


For a glimpse of the New New Russia—and its struggle to supplant the Old New Russia of a few years back—you could do worse than venture up to the deck of the O2 Lounge on top of Moscow’s Ritz-Carlton hotel. Four years ago, when the club first opened, it was mostly empty except for a few prostitutes in glinting lamé and spiky heels. Today the hookers are gone, and though there are still a few archetypal Russian businessmen hanging around the O2 with their coltish model-wives, you’re more likely to run into hotel guests like Jimmy Wales, founder of Wikipedia, in town for a tech talk.

Moscow is a city heading in opposite directions. Look southwest from the deck of 02 and there’s the tower housing RusNano, a $5 billion state-funded nanotech foundation that aims to foster “top-down innovation.” Not far from there is Digital October, part of a techie complex that features an art institute and bar, an outdoor amphitheater, and a nightclub named Progressive Daddy. These roughly reflect the priorities of Dmitry Medvedev, Russia’s current President, who has sought to diversify Russia’s oil-addicted economy and turn Moscow into a high-tech hub. Across the boulevard from O2 sits the Kremlin, which is determinedly heading into the past. On Sept. 24, Vladimir Putin announced that he, not Medvedev, will be the ruling party’s candidate for President in 2012, effectively ensuring his election. Putin could serve legally until 2024, which would tie him with Leonid Brezhnev and Joseph Stalin as the longest-serving Kremlin rulers who weren’t tsars appointed by God.

Moscow, accordingly, is divided into antipodal camps: Putin/Medvedev, Oil/Internet. There is one public figure who skates the line between them—someone who, though dismissed as a lightweight by many elites, is nonetheless a perfect encapsulation of Russia’s present contradictions. I persuaded that person to meet me on the O2 deck, though it didn’t go quite as planned. She is, after all, a former spy.

 

Here are some things I can tell you about Anna Chapman. Her hair is redder in real life than in photos, a brilliant Kodachrome blaze falling over her shoulders. I can tell you that she wore a cream-colored dress with a modest-length hem and a black sash belt. Chapman, 29, is also disarmingly attractive, not because of the dress or the hair, but because of the way she looks at you. Right in the eyes. Like she wants to, you know, connect.

She may have done unremarkable work back in the U.S. as a spy for Russia, but the woman the Russian media calls Agent 90-60-90 (for her measurements, in centimeters) is, somehow, everywhere. It’s been a little over a year since her return, a year of centerfolds, talk shows, and political rallies. The media, largely controlled by the authorities, still reports each of her many moves. Clearly the Kremlin has found her a useful hero.

Days after she was unmasked by the FBI along with nine other spies living as unassuming professionals in Boston, New York, and New Jersey and traded for four Russian prisoners on a tarmac in Vienna, Chapman received a hero’s welcome at the Kremlin. She and her fellow spies sang a patriotic song from the Soviet film Sword and Shield with Putin and, a few months later, were given medals by Medvedev. She was appointed to a high post in the ruling party’s youth brigades and was the subject of a fawning one-hour interview special on government-controlled Channel One. She attended an innovation forum led by Medvedev and showed up at the Baikonur Cosmodrome in Kazakhstan to cheer on a Russian rocket launch.

Chapman was in Baikonur because she had been hired as an “innovation consultant” by a little-known bank that specializes in financing Russia’s space industry and whose initials are, coincidentally, FSB, the same as those of the successor of the KGB. She did a lingerie-and-weaponry photo shoot for the Russian Maxim and another for the magazine Zhara (Heat). She even got her own show, Secrets of the World on Ren TV, one of the few independent TV stations left in Russia.

Chapman also signed on as managing editor of a small investment newsletter that mostly trumpets the Kremlin’s big projects such as RusNano and Skolkovo Foundation, two audacious, multibillion-dollar attempts to use what is essentially oil money to seed Russia’s high-tech industry. Like a lot of public figures, she’s seeking to align her name (and yes, she did trademark it with the federal Rospatent agency) with an initiative that has the backing of the country’s power brokers.

Yet mention Chapman to the principals of these high-profile projects, and the mood deflates. Physics PhDs and venture capitalists have no desire, or incentive, to talk to an American journalist about the tabloid spy. It’s as if she just doesn’t belong in discussions of the New New Russia. All the sordidness of the spy scandal—nude photos of her that were leaked after the arrest, that karaoke session with Putin, her rangy post-spy career—runs counter to the ultra-efficient, no-politics Russia these men are trying to sell. The otherwise animated Steven Geiger, chief operating officer of Skolkovo, had a flat “no comment” when I brought up Chapman during a 45-minute interview. Billionaire Alexander Lebedev is far from media-shy—he’s the guy who punched another billionaire during a live TV talk show last month—but his people were skeptical of any questions about Chapman and eventually declined an interview request.

For someone so ubiquitous, Chapman has become hard for the media to speak with. She was, for a time, asking interviewers to pay for the privilege of speaking to her, according to local journalists, but then backed off and stopped giving interviews. Not surprisingly, initial attempts to contact Chapman for this story were halting and unsuccessful. (Although she always signed off with a “kind regards, Anna.”) So I went out to look for her in person.

 

The first stop was Strelka, a bar that, along with the startup complex Digital October, is making Bolotny Island—most famous as the location of the Red October chocolate factory in Soviet times—a place to be seen. Chapman had apparently been spotted at Strelka the weekend before. It’s a pleasant place, new, but not flashy. There were two bouncers in front, but they seemed a little forlorn as a group of young people, one with an acoustic guitar slung around his back, pleaded to be let in. Strelka is an unlikely haunt for well-connected Muscovites, who have tended to prefer black-lit clubs with real bouncers and long, roped lines. These days, though, Digital October and environs, and really everything associated with technology, is where the smart set and the smart money want to be. When I asked one of the managers of Strelka if he had seen Chapman, he said he didn’t know. “We have many stars who come through here,” he said.

The capital city crackles with pitch presentations, website launches, and entrepreneur meetups. In the next year, Russia will overtake Germany as the nation with the most Internet users in Europe, and there’s real potential for money in the tech sector, as evidenced by Russian search giant Yandex’s $1.3 billion initial public offering in May. Serge Faguet, founder of a three-month-old booking engine called Ostrovok.ru, typifies this new energy. Faguet, 25, has an MBA from Stanford University and already is a veteran of Silicon Valley. Now he’ll tell anyone who will listen that Ostrovok will become “a $6 billion or $7 billion company.” Of the climate for startups in Moscow, he says, “People say a lot of scary things about Russia, that you have to have heavy government connections. It’s not true in our business. Maybe if you’re building fighter jets or getting into oil. Not the Internet.”

Chapman would seem to fit in among this cohort of Russians: ambitious, Western-oriented, entrepreneurial. Her years in New York were spent looking for investors and building NYCRentals.com and its sister site in Russia, Domdot.ru. Before her cover was blown, she gave an interview to a Russian website in which she disclosed that she had pawned her jewelry to fund the startup. In an English-language video testimonial recorded in 2009, she praised the networking event New York Entrepreneur Week: “It’s a place where you have similar souls,” she says. “Everybody comes together and says, ‘Hey, what are we waiting for, let’s do it. Be scared, do it anyway.’ ” For all the snarky online chatter about her, Chapman still has plenty of fans. Last month she opened up a group page and profile on VKontakte, a sort of Russian LinkedIn, and had 41,000 followers within days. A St. Petersburg State university student group invited her to speak on Sept. 28. The topic: “How to Be a Leader in the Modern World.”

Even that speech, however, was interrupted by hecklers——afterward, one student called her “a Kremlin project.” It’s true that Kremlinism is in her blood. Her biography reflects her former profession; it has all the unexplained plot points of a redacted document. What’s known is that she grew up in Volgograd. Her father worked in embassies around the world, reportedly for the state security services. (Deputy Prime Minister Sergei Ivanov, a Putin ally and former spook, told Kommersant newspaper that he has known Chapman “from childhood” because he had worked with her father.) She went on to study economics at the well-regarded Peoples’ Friendship University in Moscow, built originally to cater to the elite of Soviet-aligned countries (other former students: Mahmoud Abbas and Carlos the Jackal, who did not graduate). On a trip to London, she met her future husband Alex; they wed in 2003 and moved to England full-time. (They have since divorced.) Once there, she seems to have at least cruised the world of finance, working for a time at Barclays (BCS) and, in her own words, “studying investment banking a lot” while in Britain before branching out on her own in New York. But her time in New York is far more defined by her misadventures as a spy than by her success in business.

Chapman’s most curious current financial arrangement is with Fund Service Bank, which employs her as an “innovation consultant.” The company’s headquarters are off a small street near Belorussky train station outside Moscow’s inner ring. After being buzzed into a bulletproof glass capsule and released on the other side, I met Grigory Belkin, one of the bank’s officers, in a small conference room decorated with signed photos of American astronauts and Russian cosmonauts.

Fund Service has a less than imposing reputation, but the company did win an award in 2010 from the industry group RosBusiness Consulting for “stability and high growth rates.” Its rapidly diversifying portfolio includes companies in agriculture, home construction, and defense.

It has also begun making movies. One of its first was co-written by a bank employee; its latest includes a song by the bank president’s daughter. (“She acts great, she sings great,” says Belkin.) There’s been speculation in the Russian press that Chapman, with her nascent if not-quite-active acting career, signed on with the bank because it would produce a movie project with her in it. “We have a cinema-related project that she might be involved in,” Belkin says, but not as an actress.

What the bank is really about is financing aerospace, providing capital to companies that build parts for Russia’s space program. It claims to have special ties to the launch city of Baikonur in Kazakhstan. Almost as soon as they hired Chapman, the bank’s executives brought her to Baikonur to watch the launch of a rocket carrying two Russians and an American to the International Space Station. “The necessity of Anna came when a lot of startup projects started knocking on our door,” says Belkin. “We needed someone like her to decide which were the gold projects.” What are her qualifications? “She is a person who knows a good deal and learns quickly.” Chapman, whose official title at the bank is adviser to the President on investments and innovation, evaluates about one startup a month, says Belkin, and then makes a decision about whether to fund it. The bank’s president follows her advice, he says.

How much does she earn? That’s private, but “it would be a sin for her to complain,” says Belkin before noting that Chapman does charity work, is athletic, leads a healthy lifestyle, believes in the “old, traditional Russian connection to family,” is “super-reliable,” and speaks foreign languages. “She’s just generally a good person,” he says. “She’s never taken money she didn’t earn.”

 

An hour after we wrapped up our conversation, a Soyuz rocket carrying supplies for the space station took off from Baikonur 1,000 miles away. It was the first launch after NASA’s final shuttle landing and was supposed to represent a passing of the baton to Russia. It was not a smooth handoff: The unmanned rocket and cargo ship crashed in eastern Russia five minutes after takeoff.

The Baikonur crash is just one of many recent Russian disasters, and a reminder that the country has yet to evolve into the kind of modern and high-functioning society that Russia’s new business elites yearn to build. The decision by Putin to reclaim the Presidency dealt a crushing blow to Medvedev’s reputation and may also signal the end of his still-unrealized attempts to transform the Russian economy. The ruble recently hit a two-year low against the dollar.

There is concern in the business community about whether anyone will manage the economy as well as long-serving Finance Minister Alexei Kudrin, who resigned on Sept. 26 after a public spat with Medvedev. Putin’s return may bring some political clarity and avert the potential for a leadership struggle between rival camps in the Kremlin, but a short-term calming of market fears is no substitute for real and lasting reform.

I would like to tell you what Anna Chapman had to say about all this on the terrace of O2. After weeks of mixed messages, she agreed to meet for coffee on a late summer evening, on the condition that I not interview her nor provide details about what she said. She wanted to get a feel for whether she might want to talk at a later date. We were supposed to meet in the lobby, but she slipped past me and was waiting upstairs on the roof.

Chapman radiates optimism. Her Western passports have been stripped, and she will likely never set foot in the U.S. again. Yet she is unmistakably American in her love of all things can-do. She has just begun blogging on the topic, in fact. In her post for Venture Business News, she hit on a theme spoken by nearly everyone I met in Russia’s technology community: belief.

Wealthy Russians transferred at least $50 billion to overseas banks in the past year, effectively casting billions of votes of no-confidence. Those who are trying to build something big and new in Moscow say that, although it doesn’t come easy to them, Russians need to be positive about the future, to believe they can succeed at home. For the post’s title, Chapman chose the same phrase she used for New York Entrepreneur Week in 2009: “Be Scared, but Act.” “Your creation—whether it is a product, site, technology, or even a business process—consistently produces in you something new,” she wrote. “A positive attitude plays a huge role in success. … Looking back on my experience, I can assure you that my decision to leave a steady job and start my own business [has] given me a lot more than I could ever imagine. And now it seems to me that every day is special; it is the pinnacle of life and the journey of human freedom.”

What does that mean? Will Chapman use her action figure status to actually stand for economic reform, liberalization, innovation? Or will she remain forever tethered to the ways of Putin, the man who made her famous, profiting from a system that inevitably will hold Russia back? If she can solve her own contradictions, maybe Russia can as well.

I would have liked to ask her all of that on the record. Instead, I escorted her down the elevators, through the gilded lobby and up to the revolving doors that let out onto Tverskaya Street. She would think about whether she wanted to speak on the record, she said. I’m still waiting for her answer.

With Olga Razumovskaya
Thornburgh is a Bloomberg Businessweek contributor.

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