Going through Checkpoint Charlie into gloomy and dark, dank East Berlin was always frightening. The Wall itself was ominous, the guards were the fiercest looking on the planet, and the barbed wire and landmines were right there for everyone to see. All of us have seen jaw-dropping spy movies about the infamous Friedrichstrasse and what happened on the other side of it. They were commies, after all.
I first went through the experience as a teenager in 1972 and did it again more than a dozen times as an adult. It never got any easier. The DDR, as they called East Germany, was a former Nazi-land that was then communist. And they did communism better than anyone else because they were authoritarian by nature. The crossing guards were a special breed of monster, who could and did make life difficult, very difficult. Just watch “The Lives of Others.”
When I was a college student, I had to cut my hair at the border just to get into the lovely Soviet DDR. One of my mates had a bigger problem; after waiting the obligatory seven to eight hours and having everything he owned strewn out to inspect (and hands put up your ass) they took issue with his passport picture. In the photo he had a beard but at that time he was beardless. They debated for an hour amongst themselves before they let him pass. The guards liked to confiscate cigarettes and were most fond of Playboys. Jerkoffs. But their absolutely favorite thing to turn-up was the Bible.
On another trip we were in a group, which I was leading, and we had three Volkswagen vans. At the DDR border which was always the strictest, German Shepherd dogs and goons in long black leather coats awaited. Our turn finally came and they deflated our tires, rolled mirrors under the vehicle, and strip-searched with grosse frauleins the woman first, and then intimidated the men.
They kept asking me, as the leader, do you have Bibles? They were insistent. I knew the rule that a person was allowed one, as part of his personal effects. They asked two more times, never quite believing my answer. After the third time, I felt like St. Peter denying Christ thrice before the cock crowed after the scene at the Garden of Gethsemane. I loudly protested that I had no Bibles except the one I kept in the glove compartment, which they had clearly noticed. It was a Good News Bible meant for popular consumption and easy to read. The guard blurted out in German, “How could people of your level have a Bible?” Then they let us through but the government guide assigned to us spent the better part of a day reading that thing cover to cover in the front seat of the van. They had a thirst for truth because they were not permitted access to any.
When the Berlin Wall finally came tumbling down in 1989, there was an opportunity of historic proportion. It wasn’t just a German unification issue, although it was that; it wasn’t just a European issue about defining the new borders for the continent, although it was that, too. It was a Free World problem because we had fought so long, spent so much money, and prayed so hard, for such a day. Could we seize the opportunity or would it slip through our fingers?
I was at the Berlin Wall just days after the opening. I was serving as a senior diplomat (deputy executive secretary of the U.N. Economic Commission for Europe) just after adjustments were made and discussions about probabilities quickly changed into term sheets for deals and marching orders for new economic relationships. Since all the old leaders fell or killed themselves, one after the other, and the new leaders were in almost every case our former drinking buddies who suffered communism in less-than-distinguished day jobs, it meant I was well-placed to move in this new orbit to assist and recommend new and better options.
In that context, as an executive board member of the World Economic Forum (Davos), I had two opportunities to cross paths with a young Soviet deputy named Vladimir Putin. We were the same age. While he was short and blonde, I was tall and blonde. He was a colonel in the KGB and a sour-faced ideologue. Having worked in espionage in Dresden, in the DDR, and as a fluent German speaker, Putin was at that point a bag-carrier for the mayor of Leningrad, Anatoly Sobchak, a lawyer and a reformer.
As it became clearer over the years, boy Putin was quite insecure and despondent about the Soviet Union’s demise. He believed in neither glasnost nor perestroika. We sought to have a delegation of about 25 Soviet leaders at Davos that year and it included Sobchak, all the market-leaning economists, and the heads of industry groups—from autos and steel to agriculture and energy. It was a “who’s-who” list and they wanted to make friends and do business with big Western business types to get investment and deals flowing.
I was their official host—quite an irony, as I was a cold warrior if ever there was one, and an American to boot. I still remember the day in January they all arrived on a special Aeroflot flight from Moscow to Zurich. I met them on the runway red carpet. Arkady Volsky, who led the delegation, was a bear of a Russian with a big grin who could drink anyone under the table. He embraced me in a big hug and presented me with a gift I cherish to this day: a beautiful red fox Russian hat.
Putin was in the background and, frankly, he drank heavily and no one expected his meteoric rise. But he was KGB through and through. When the time came, he was surrounding Boris Yeltsin and somehow weaseled his way into the power orbit so he was positioned to be president. That intrigue has led to many rumors, but I would simply chalk it up to thuggish Soviet power plays.
East Meets West
Claus Barbier was chairman of Arthur Andersen Worldwide, headquartered in Geneva but with boundary-less responsibilities. We had met at Davos and at various Geneva functions and dinners. He had hosted Eastern VIPs in Switzerland. He asked me to work with him on some new companies he was starting under the title CEO (he said it stood for capitalist economic options). His premise was that these now freed countries in the East, especially Russia, would be keen to search out new economic options. Barbier was a Frenchman with a much younger, very cute American bride and two small children. He lived well and had homes in France and Bermuda. I was invited to Bermuda for a week’s vacation and to plot out targets. I traveled with him to Hungary and then to the Soviet Union where he thought the biggest opportunities were to be plucked. We both knew Arkady Volsky and some of the Soviet economists whose careers had been transformed instantly and overnight as the tides shifted and the new economic realities came into play.
I made about 20 missions to the East and the Soviet Union, which would become the Russian Federation before long. In Hungary, we helped the Central Bank to become more bank-like. The assignment ran out of IASA, a scientific think tank in an old castle outside of Vienna where a number of Eastern country scientists were placed to learn the lessons of the West. They held a number of sessions there first for Hungary, then Poland, then Czechoslovakia, and finally for Russia itself to get them up to speed on the banking sector and especially in the dos and don’ts of running a real central bank.
Our team consisted of senior and some older retired people who had run the Fed, been at Treasury, done research on banking, and spent time in money center banks. We would present. They would listen with simultaneous translation and ask questions. Most of the time was spent just going back and forth on what they did and then telling them what needed to be done, very differently. Their senior-most people, for the most part, were untrainable or too old to learn new tricks. The younger ones were attentive and spoke some English and seriously wanted to get on with new forms of business. One of the Soviets was particularly bright and it turned out he had spent time at Wharton in Philadelphia some years before learning econometrics. Leonid Grigoriev was a definite keeper and did well. He could also drink like a fish—an old Russian ailment, vodka 24/7.
The best trip I made to the East was with the Institute for East-West Security Studies (now the EastWest Institute) and its colorful founder John Mroz, a streetwise administrator who knew how to get things done. He had great energy and a super Rolodex to match. He asked several of us to join him and Iain Somerville from Accenture in Poland for a week to help them and their new leadership do change management and privatization. Sounded worthwhile and the stipend was good.
We flew over on LOT, the Polish airline, and went directly to the offices of Leszek Balcerowicz, the new minister of finance whom I had met years before in Germany at the U.N. meeting on economic reforms. Now he was in charge of making those reforms. We were brought in to help him and his new juniors make the transition to a market economy. Everything from A-to-Z had to be worked out and rationally ordered. Late that night they took our group to our hotel. It was not a real hotel. It was the headquarters of the former Warsaw Pact countries, the place where their generals had met to plan war against . . . us. They were very nice digs but the air was creepy. I kept thinking about the mischief that had been orchestrated from those very rooms. It reminded me of “Dr. Strangelove.”
After working intimately with the Poles and debating all kinds of options, we were taken to a dinner where we met Lech Wałęsa, the famed Solidarity leader who became Poland’s first post-communist president. He asked each of us, one by one, for our best recommendations. Time was moving fast and change was rushing in like an unstoppable wave. My recommendation was get on with it—don’t delay the pain or the coming rewards. He nodded, approvingly.
In Czechoslovakia, we made a similar but more formal visit with seated dinners and fewer roll-up-your-sleeves working sessions. Finance Minister Vaclav Klaus wanted help, but he was cocky and thought he knew most of the answers as a learned man of letters. We had a state dinner in the castle with President Václav Havel, and he gave a philosophical lecture. The Czechs seemed much more poised and ready to go back into Europe than their other Eastern counterparts.
The Czech government sent Vladimír Dlouhý to the United States to meet with us. He was a bright new minister and later head of Eastern Europe for Goldman Sachs. It was coincidental how many of the people we worked with in short order jumped to the private sector and made a killing. Dlouhý had worked in the U.N. as a professional and was a politician. They lost his suitcase when he arrived at Dulles Airport and I had to take him out to buy a whole new wardrobe so he could be seen in public. My mother sewed his pants, making alterations in haste late one afternoon, so he could make a big speech that evening at the Aspen Institute. What we don’t do for the cause.
Cronies and Kleptocrats
The situation in the USSR around this time was most chaotic, as everything the Soviets had known was crumbling either from the dead weight of 75 years of crusty communist rule or from plain old Russian inefficiency amid the jockeying for political and economic power. The mafia didn’t help matters either.
Meantime, our old acquaintance Putin was ascending to power.
Working with the Russians was always frustrating, as nothing ever seemed to move. When the ball went uphill, as for Sisyphus, it rolled right back down again! But there was wealth in them thar hills and they knew it. Volsky and his cronies had money stashed away in numbered accounts; apartments in Paris and London, and in Russia they still wielded ultimate power. They could fly you to Siberia and get on a helicopter to see some oil wells or get you in and out of some dangerous places in Central Asia. They controlled the large combines and dictated who would run them and who would own them when they eventually went private.
On one trip with a small delegation, we saw all the new leaders and were the first and likely last people to see the autocrats who ran Gosplan, where all the centralization of the economy and of prices took place. Soon they would have nothing to do. Our delegation leader was an Uncle Sam-looking and talking figure named Donald Kendall, who had been CEO of PepsiCo and was still very much an all-American salesman.
Kendall’s real interest was in seeing that the Kremlin picked Pepsi over Coke and built more Kentucky Fried Chicken stores where the lines would go around the block. Later he made a deal to buy Russia’s leading vodka maker, they say to get his rubles out and converted. Kendall’s sidekick was a short, tough-looking dark guy named Roger Enrico, who himself later became CEO of the company.
There were so many theories and personalities it wasn’t clear who would come out on top when Boris Yeltsin took over. A pack of Marlboro cigarettes was still a good bartering tool to get a taxi or to buy those ever-present matryoshka dolls. My favorite one had a tiny Lenin, inside a small Stalin, inside a bigger Khrushchev, inside a larger Brezhnev, inside a larger yet Gorbachev, and all contained inside a largest, Yeltsin. Very Russian—you like? It cost me a carton of those smokes. And it still sits on my bookshelf.
On that trip we were allowed for the first time outside Moscow to a forbidden area that contained secure military installations. Our destination was the old and very beautiful Russian Orthodox monastery at Zagorsk. We were the first Western visitors and were shepherded around by an old and a young priest, both with extremely long beards, one gray and the other jet black. I think the translator was going out of her mind, as she too had never seen this side of traditional Russia. It was touching and emotional to see the art collection, the icons, and religious memorabilia, all still intact after so many years of total neglect and official atheism.
In the end, some countries made an easy and direct transition to the market with our help. Hungary, Czechoslovakia, and Poland were the three countries that made a clean, successful break. The others further east suffered messier transitions and were Slavic in culture with closer ties to the Russians. Many used the same alphabet and had the same mores. For them, change was slower and more painful. And in most of these cases the dictatorships of the proletariat gave way to the kleptocracies of the instant capitalists. Entire industries and large firms were looted, gutted, or merged with others in acts of instant privatization that saw wealth transferred from the state to the kleptocrats and their oligarchic cronies or relatives in one fell swoop. Putin was in the middle of all this and has prospered mightily from the system, to the tune of $100 billion.
Two New American Friends
In 1992, I got involved, given my background, with the Soviet—soon to be Russian—entry in the America’s Cup sailing races. Tom Griffin, a heavy vodka-drinking friend in Annapolis, was the key organizer and I helped to raise funds for the Red Star entry, captained by an Olympic medal-winning Soviet Georgian. We were set to bring the boat to San Diego when the Soviet Union finally fully collapsed and the KGB thwarted the effort. Yeltsin wanted to come himself but there was simply too much chaos at home to risk going abroad. We have some great sailing memorabilia from those days and were made honorary members of the Leningrad Yacht Club before it, too, was revamped and renamed. You have to admit that St. Petersburg does sound a lot better than Leningrad.
We did sponsor Yeltsin when he finally had his tanks surround the Russian parliament to take office. He came to New York and we met him and ushered him around. He was sober only a few minutes during the entire visit but I do recall that he made two very good, new American friends—Jack Daniels and Jim Beam.
What Putin Wants
Fast forward to the situation today and the possibility of World War III.
Putin, still very much a product of the KGB, fancies himself as a latter-day czar. Russia’s president-for-life is reaching for his legacy at all costs. As a dictator, he wants to impose his will on Ukraine and beyond. Unbelievably, he may even risk nuclear war.
It appears Putin wants to hold Ukraine as a surrogate state, installing his own puppet. In effect, Putin wishes to re-annex Ukraine under Moscow’s political, military, territorial, and commercial control.
While implanting hundreds of thousands of Russians in occupied Ukraine between 1917 and 1991, the Soviets also built several key institutions and infrastructure, including:
- Several weapons factories to supply Kalashnikovs and other weapons for the Soviet military and Third World allies, the Chinese army, North Korean army, revolutionary armies worldwide, and anyone with U.S. dollars.
- Former Soviet aircraft manufacturing plants, which produced parts for the MIG, Ilyushin, and Antonov fighter jets.
- Chernobyl and other nuclear power plants producing weapons-grade plutonium for nuclear weapons. (Chernobyl was de-commissioned by an American firm, Bechtel).
- Naval shipyards for the manufacture and operations of Russian ships in the Black Sea.
- The operation of strategic routes for the transmission of Russian natural gas and oil into Europe.
- The continued operation of commercial and military transport routes (pipeline, road, rail, air, and water) for the transmission of substantial trade flows of military and commercial goods both ways, in and out of Russia through Ukraine.
- A buffer to NATO.
I have not heard one pundit, politician, or deep state official raise these issues as the pretext for Putin’s interest in Ukraine, which he now feels empowered to force on his militarily and politically weak, yet courageous neighbors.
Ukraine and other former vassal states are the “Jewels in the Soviet Crown,” which Russia lost in 1991 and which Putin wishes to retake to, if you will forgive the phrase, “make Russia great again.”
Who ever would have thought that puny spy I met in 1990 and ’91 would come to this demonic and utter evil?