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Moscow's New Breed Of Flimflam Man


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MOSCOW'S NEW BREED OF FLIMFLAM MAN

BEAR HUNTING WITH THE POLITBURO: A GRITTY FIRST-HAND ACCOUNT OF RUSSIA'S YOUNG ENTREPRENEURS--AND WHY SOVIET-STYLE CAPITALISM CAN'T WORK By A. Craig Copetas

Simon & Schuster -- 271pp -- $22

Not long ago, Westerners engaged in trade with the Soviet Union followed a well-established pattern. They'd arrive at Moscow's Sheremetyevo Airport, suitcases laden with goodies from Scotch to camcorders. Limousines would whisk them to one of several foreigners' hotels -- off-limits to average Soviets, though prostitutes and black marketeers were welcome. The next morning, they would be taken to the wedding-cake tower of the Foreign Trade Ministry, where they'd present their gifts and start bargaining with a tiny corps of Soviet foreign-trade bureaucrats.

All this has changed in the upheaval of the past seven years. Westerners are more, rather than less, at risk when they try to do business in the former Soviet Union, writes A. Craig Copetas in his amusing new book, Bear Hunting with the Politburo. That's because the mossbacks of the old trade bureaucracy, though corrupt, operated by an unspoken set of rules. You could depend on them. The new traders are just as corrupt but play by no rules at all.

Rather than opening up opportunities, perestroika has replaced the old system with a more dangerous one, writes Copetas, who worked in Moscow from 1987 to 1991 as a correspondent for Regardie's. The new business people, who claim to be the vanguard of a market economy, cut their teeth in a Communist system that forced them to pay lip service to whatever lie was tossed their way. It may be a generation or more before the new traders can tell the difference between right and wrong. "Dishonesty, in the Western sense, was common business sense in the Soviet Union," Copetas writes.

Copetas focuses on several young pioneers of the cooperative, or private-business, movement that Mikhail Gorbachev began in 1987. His star example is Volodya Yakovlev, whom he casts as Moscow's entrepreneurial everyman. To believe Copetas, Yakovlev, a 31-year-old child of the Communist bourgeoisie, is as brilliant as he is amoral. "The Yak" left Soviet journalism to create Cooperative Fact, a kind of Yellow Pages service. He followed that with Commersant, the first Soviet business newspaper since the revolution.

Copetas, who also worked as an adviser for the Yak, credits his client with a knack for suckering Westerners. Caught up in the glitter and promise of perestroika's early years, a parade of Americans fawned over Yakovlev, inviting him to enroll at Harvard University and providing him with a steady stream of hard currency and computer hardware. When he set up Commersant, he quickly acquired a coaching staff of U. S. journalism professors and executives. The venture was bankrolled to the tune of more than $400,000 by Thomas H. Dittmer, chairman of Refco Group Ltd., a Chicago commodity-trading firm. (Copetas gives Dittmer and his firm pseudonyms to protect them from "possible political retribution," but a check of recent news stories readily reveals their identities.)

The wily Yakovlev burned nearly everyone. For one thing, he refused to recognize that a contract is a contract. He entered into an exclusive information-marketing agreement with Dittmer, who dutifully propped up Commersant with staff, cash, and hardware. Then, after failing to pay many of his American bills, Copetas writes, he violated the deal by entering into a similar arrangement with a French media empire. Copetas never does explain how the conflict was resolved, but Refco still markets Commersant subscriptions in the U. S.

The Yak and others like him have had no trouble finding prey. Many foreigners doing business in the Soviet Union, especially Americans, are woefully naive and unable to resist the lure of perestroika. In Copetas' words: "The American entrepreneurs rushed Moscow like airborne Oklahoma Sooners, so many that the Soviet Consulate in Washington, D. C., had to conscript extra embassy staff to process the thousands of business visas that arrived at the door weekly by Federal Express. There were California entrepreneurs wanting to sell the Soviets swimming-pool tarpaulins, Texas entrepreneurs pushing bull semen, Florida entrepreneurs extolling the virtues of prefabricated houses, and North Carolina entrepreneurs peddling sod." As Michael Mears, the U. S. Commercial Office counselor in Moscow during the late 1980s, put it: "Virtually none of them knew what they were doing."

Among Copetas' targets is the U. S.-U. S. S. R. Trade & Economic Council, a secretive trade group made up of many blue-chip American companies and such heavy hitters as PepsiCo Inc.'s Donald M. Kendall and Dwayne O. Andreas of Archer Daniels Midland Co., the Illinois agribusiness company. Copetas claims that U. S. companies received little in exchange for up to $14,000 in annual dues. Many got into risky council-backed deals that fell apart in 1987, when Vladimir Sushkov, a deputy Soviet Trade Minister and council co-chairman, was caught smuggling Japanese videorecorders. Copetas quotes an American automobile executive: "The Council cost us over $250,000, and all we ever got out of it was a . . . table near Gorbachev at a Kremlin dinner."

Copetas' lively anecdotes contain valuable lessons for anyone contemplating doing business in the Soviet Union. But I'm troubled by the idea of Copetas working willingly and intimately for Yakovlev, apparently intending all along to write this put-down of perestroika. Moreover, Copetas' slick writing veers disconcertingly between whimsy and deadeye reporting. Some of his stories seem far-fetched, and his quotes are too uniformly funky to be entirely believable. Still, since the failed August coup, a string of self-serving and predictable wheezes has come out of Moscow, even one by Gorbachev himself. In comparison, Bear Hunting with the Politburo, with its bitter view of the new Soviet free marketeers, is fresh and important.PETER GALUSZKA; International News Editor Galuszka reported from Moscow for three years.


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