Date: May 13 – June 3, 1996
Location: Moscow & Transneft Headquarters
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May 13, 1996 – Moscow, Neva Bank Headquarters
The letter arrived by courier at 10:00 AM, printed on heavy paper embossed with the double-headed eagle of the Russian Federation. Alexei recognized the seal immediately: Transneft, the state pipeline monopoly.
Boris read it first, his face growing pale. "They're denying our pipeline connection permit."
Alexei took the letter and scanned it. The language was bureaucratic, but the message was clear: Transneft was refusing to approve the interconnection point where Alexei's private pipeline would tie into the state system. Without that connection, his pipeline was a twenty-kilometer steel tube going nowhere.
"They claim technical deficiencies," Boris said. "Insufficient pressure rating. Incompatible metering systems. Lack of emergency shutdown protocols."
"All of which were approved by their own engineers six weeks ago."
"Someone changed their mind."
Alexei set the letter down and walked to the window. Below, on Tverskaya Street, a motorcade of black sedans was crawling through traffic—some government official late for a meeting. The election was five weeks away, and the political maneuvering was intensifying.
"Who at Transneft signed this?"
"Deputy Director Dmitry Rogozin."
Alexei searched his memory. Rogozin. A mid-level bureaucrat with ambitions. Not powerful enough to make this decision on his own. Someone was pulling his strings.
"Find out who Rogozin met with in the last two weeks. Lunch meetings, phone calls, anything. Someone put him up to this."
---
May 18, 1996 – Moscow, Café Pushkin
The intelligence came from an unexpected source: a former KGB officer named Viktor Krymov, whom Alexei had hired through General Sokolov's network. Krymov was fifty-eight years old, balding, and looked like a retired accountant. But his contacts were legendary.
They met in a private room at Café Pushkin, away from the journalists and businessmen who frequented the main hall.
"Rogozin had dinner with Vladimir Potanin on May third," Krymov said, stirring his tea. "At the National Hotel. Potanin's people paid the bill."
Alexei felt a chill. Potanin was one of Russia's most powerful oligarchs—head of Interros, controller of Norilsk Nickel, and a major shareholder in Sidanco, an oil company that competed directly with Alexei's operations.
"Potanin wants to block our pipeline access," Alexei said. "If we can't connect to Transneft, we can't export. If we can't export, our refinery runs at half capacity. If our refinery runs at half capacity, we can't fulfill the German contract."
Krymov nodded. "That would be the logic. Potanin also controls a bank that recently lent money to Transneft. He has leverage."
"What about Rogozin? Can he be turned?"
"Everyone can be turned. The question is price. Rogozin has a mistress in Riga. An apartment there. A son studying in London. He wants security for his family."
Alexei considered this. Bribing Rogozin was risky—if it became known, he would be vulnerable to blackmail or prosecution. But leaving the pipeline blocked was worse.
"What's your recommendation?"
Krymov leaned back. "Don't bribe Rogozin. Bribe his superior. The Chairman of Transneft, Vainshtok. He's the one who ultimately approves permits. Rogozin is just a deputy."
"Can you arrange a meeting?"
"I can try. But Vainshtok is cautious. He won't meet with you directly. He'll send an intermediary."
"Do it."
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May 25, 1996 – Moscow, Undisclosed Location
The intermediary turned out to be a lawyer named Arkady Feinberg, a grey-haired man in an expensive Italian suit. They met in a conference room at the Metropol Hotel, chosen for its neutral territory and multiple exits.
Feinberg spoke first. "Mr. Volkov, my client understands your frustration. But Transneft has many stakeholders. Approving your pipeline connection would set a precedent. Other private operators would demand similar access."
"Other private operators don't have fifty thousand tons of diesel contracted to Germany every month," Alexei replied. "Other private operators didn't invest $3 million upgrading terminal facilities. Other private operators aren't employing fifteen hundred workers who depend on this pipeline."
Feinberg smiled thinly. "Those are emotional arguments. My client is interested in practical arrangements."
"Then let's be practical. What does Vainshtok want?"
"A seat on your board. Observer status. No voting rights, but full access to your financial records and operational plans."
Alexei's jaw tightened. That was worse than a bribe. Giving Transneft a board seat would mean giving the state visibility into his entire operation. It would also signal to other oligarchs that he was vulnerable.
"No."
Feinberg's smile didn't waver. "Then perhaps my client will reconsider your permit. In six months. Or a year."
"If I don't get that permit in two weeks, I sue Transneft in international arbitration. I have a contract with the German utility that specifies delivery dates. If I miss those dates because of Transneft's arbitrary actions, I will hold the Russian government responsible for damages. And I will make sure every Western investor hears about it."
Feinberg's expression flickered. "That's aggressive."
"That's business. Vainshtok can either approve my permit and get nothing, or block it and face a lawsuit that will embarrass the government three weeks before the presidential election. Ask him which he prefers."
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June 3, 1996 – Moscow, Neva Bank Headquarters
The second letter arrived at 2:00 PM. Alexei opened it alone, Boris watching from across the room.
"Re: Pipeline Interconnection Permit – Approved. Technical conditions attached. Please sign and return within ten days. Signed, S. Vainshtok, Chairman, Transneft."
Alexei read it twice, then handed it to Boris.
"He blinked."
Boris scanned the letter. "Or he realized you were right. A lawsuit right before the election would be disastrous for Yeltsin. Transneft answers to the Kremlin."
"Either way, we have our permit. Call Helmut. Tell him to start welding the connection next week."
Boris hesitated. "What about Potanin? He's not going to forget this."
"Potanin is a problem for another day. Right now, we have a pipeline to finish, a refinery to expand, and a German customer to satisfy. One battle at a time."
Alexei walked to the window. The evening light was golden, casting long shadows across the Moscow skyline. Somewhere across the city, Vladimir Potanin was probably cursing his name. Somewhere in the Kremlin, Vainshtok was explaining why he'd backed down.
*This is how power works in Russia*, Alexei thought. *Not through brute force, but through leverage. Knowing what your opponent fears more than what you want.*
He pulled out his grandfather's address book and flipped to a blank page. He wrote: Potanin, Vladimir – Sidanco – Enemy. Do not trust.
Then he closed the book and slipped it back into his pocket.
"Boris, send a case of good French wine to Vainshtok. With a note thanking him for his cooperation. And send a case of Georgian wine to Rogozin. Just to remind him we know his name."
"And Potanin?"
Alexei smiled coldly. "Potanin gets nothing. Except my attention. He's made himself my competitor. I intend to return the favor."