‘It’s the logic of consumption. What is a rich Russian? It means you must have an apartment in Moscow, a Bentley, a dacha on Rublyovka, a house in London, a villa in Sardinia and a yacht. Then you must buy modern art’
- JOSEPH BACKSTEIN, artistic director for Moscow’s museums and exhibitions1
IN EARLY FEBRUARY 2007 Sotheby’s in London’s New Bond Street was preparing for its annual winter auction. All the signs were that it was going to be a frenetic few days. For the previous six months prices realized at fine art auctions had been breaking records on both sides of the Atlantic. The third day of the sale was as tightly packed as ever with the usual gathering of art critics, dealers, and the international rich. The day had already started well with another set of ground-breaking prices.
Next up was White Canoe, a large landscape set in the Canadian Rockies by the contemporary Scottish painter Peter Doig. The painting, much admired by critics, was expected to fetch a maximum of £1.2 million. Bidding started briskly with six buyers still in when the price reached £2 million. At that point four dropped out while two continued bidding. First the £3 million threshold was passed, then the £4 million. Finally, as those witnessing the event gazed on in hushed anticipation, the painting was eventually sold for £5.732 million - close to five times its reserve price and a remarkable sum for a living painter relatively unknown five years earlier. Moreover, the painting did not go to one of the expected collectors or to a British or American buyer. Although his name did not emerge until months later, the buyer turned out to be an anonymous Russian.
This was not the first time a Russian had stolen the limelight in the art market. Eight months earlier, in May 2006, a middleaged man in a blue blazer walked into Sotheby’s in Manhattan, collected a bidding paddle, and was ushered to a seat near the back of the room for the auction house’s sale of Impressionist and Modern Art. First the mysterious and unrecognized man bid $6.5 million for a Monet landscape, $2 million over the estimate. Then he steadfastly saw off the bids of three US billionaires to land Picasso’s Dora au Chat, his 1941 portrait of his lover Dora Maar. It wasn’t just the extraordinary $95 million price that stunned the array of hard-nosed art insiders, even though it was almost twice the estimate and the second-highest amount ever paid for an artwork at auction. ‘He looked like he’d never been to a sale before,’ sniffed one observer. Three days after the auction the New York Times carried the man’s picture under the headline ‘Recognize this man? The art world doesn’t.’ At the time the assumption in art circles was that, given his accent, bidding style, and willingness to pay so much over the odds, the mystery buyer had to be Russian.
The year 2005 had been quiet for the world’s art markets. There were few extraordinary sales and nobody bid more than $100 million for a painting. Then came 2006, the year the international art market caught fire. In that year three paintings sold for more than $100 million apiece, including a Jackson Pollock drip painting and Woman III, by Willem de Kooning. In 2005, 487 works sold for more than $1 million. In 2006 it was more than double, at 810 works. It was not just Old Masters, Impressionists, and Picassos that started to break all-time records: prices for contemporary artists, from Francis Bacon to Damien Hirst, also began hitting extraordinary heights.
What started in New York soon spread to London, and the reason for the booming market was, as one art critic put it, ‘foreign money’. Prices were scaling new heights because of the desire of the new global billionaires to possess the world’s most sought-after works. There was now an elite group of spenders, for whom multi-million-pound prices were small change and who were increasingly outbidding public galleries, charitable foundations, and the ‘B’ list of multi-millionaires for the rarest of works, both old and modern.
Even the most hardened of art insiders were aghast at the escalating prices and the question exciting the art world was how much higher prices would go. The answer was a lot. The first signs of a continuing boom came in the February 2007 sales in London. Then, in June, amid another round of bidding frenzy and tumbling records at sales by London’s Sotheby’s and Christie’s, the market was catapulted into even higher territory. While much of the world was tinkering on the brink of recession, the rest of 2007 and the first half of 2008 saw that frenzy continue, and more records were smashed.
Because it is just the kind of art that appeals to the new buyers, contemporary art - works created since the late 1940s - proved especially hot. As one observer cryptically put it, ‘It fits with the décor of a Chelsea loft.’ Demand was again being driven by non-European and non-American buyers who were now regular fixtures at auction rooms and able to compete on equal terms with the more established names from Europe and the US. As Henry Wyndham, chairman of Sotheby’s Europe, put it, ‘At the top end of the market there’s immense wealth. There’s more wealth around than at any time in my lifetime. It’s all over the world.’2
Although the new international players included collectors from China, the Middle East, and South-east Asia, the most prominent throughout 2007 were, according to experts, the Russians and those from former Soviet states. At Christie’s June 2007 auctions, the biggest buyer was a Geneva-based Russian who bought ten lots worth a total of £23.4 million.
There was some sign of what was to come in the mid-1990s when a handful of Russians first started to show an interest in art at the London auctions. In 1994 Sotheby’s reported interest from a number of Russians. Nevertheless, ten, even five years ago, it was unthinkable that the Russians would soon enter the ranks of the most powerful players in the global art market. Yet in 2007 they were behaving in the salesrooms with what one commentator described as the ‘hot-headed madness of the Japanese in the late 1980s’.3
Leading art auction houses in London and New York for the first time started to add Russian roubles to the boards that display price conversions for the works carried. The boards, which help international buyers to keep track of the bidding, already showed US dollars, euros, sterling, Swiss francs, and yen. In June 2007 a London-based magazine for Russians, the London Courier, devoted an entire issue to the impact Russian money was having on the international art market. The private view at London’s Frieze Fair that year was described jokingly as ‘The October Revolution’ so packed was it with wealthy Russians. So important had the Russians become that even the Tate joined other international museums and art collections courting the tycoons for their patronage. While some observers question the lasting impact of the recent Russian art frenzy, it is likely that some of the great collections of the twenty-first century will be found in Russia and Ukraine, just as some of the great collectors of the early twentieth century were Russians.
It is not just London and New York that have been targeted by Russians, a mix of those making big money in the 1990s and a younger group of art-loving entrepreneurs who have made money more recently from supermarkets, restaurants, or mobile phone businesses. The London sales at the end of June 2007 came after a month of frantic buying across Europe. When the Venice Biennale opened at the beginning of June, the Russians were there in force. Some arrived in their private jets, others in yachts. Many seemed to be there on a shopping spree, ‘As if they had been buying cars’, remarked one observer. This led some to complain that major international art fairs had less and less to do with art and more and more to do with the growing power and concentration of money. As one art critic covering the Biennale put it, ‘The art may be rubbish but the parties are worth coming for’.
This seemed to be confirmed by the presence of Ksenia Sobchak, the young Moscow celebrity who courts publicity and has been dubbed the Paris Hilton of Russia. The host of a salacious Russian reality TV programme called Dom-2, Russia’s equivalent of Big Brother, she drove a Porsche Cayenne and has hung out with, among others, Naomi Campbell. A former ballet student, she has been photographed for Pravda and the Russian edition of Maxim. She is sometimes called the ‘Kremlin’s cover girl’ because her father, Anatoly Sobchak, once the Mayor of St Petersburg, was, before his death, close to Vladimir Putin and she is the goddaughter of the President. It was Sobchak who introduced Abramovich to Daria Zhukova.
From Venice the new collectors moved on to the Basel Art Fair in Switzerland, feted as the most important European fair for contemporary work, and then headed for London. One art critic who followed the crowds described it as like ‘the eigh-teenth-century Grand Tour on speed’. William Cash, editor of Spear’s Wealth Management Survey, called it a ‘non-stop circus’.
The power of former Soviet money soon helped to switch the relative positions of New York and London. While London mostly took a back seat to New York, selling less and commanding fewer of the world’s most sought-after paintings, that had changed by 2006. As New York-based Abigail Asher, one of the world’s leading art advisers, explained, ‘Take the London auctions. They were once poor cousins to those in New York, which was where all the blockbuster material ended up. It didn’t feel that way in February 2007. The salesrooms were jammed and electric and - unlike New York - were buzzing with “niet” and “da”. A new and energetic group of collectors seemed willing to pay any price for what they wanted.’4
Whether prices could just keep soaring was what kept dealers and collectors awake at night. The late 1980s saw a similar dramatic and frenzied boom. At that time it was led by the Japanese; when the well-heeled who had been burned in other markets began snapping up art, people suddenly appeared from nowhere to open galleries and unknown artists suddenly became somebody. The speculation ended in tears with the spectacular crash of 1990-91, when the market went into recession and many dealers went bust while paintings lost up to two-thirds of their value.
Some experts such as Cristina Ruiz of Art Newspaper argued that the ballooning prices of the time were unsustainable. ‘Eventually the speculators will desert the market,’ she wrote in 2006. ‘The new galleries that have flourished in the East End [of London] will close. The really young dealers will crash. It happened in the early 1990s and will do so again.’5 Another warned that the art market was behaving like ‘froth on the cappuccino’.6 Others dismissed talk of a bubble, saying that the 1980s were exceptional, a boom built mainly around Japanese buyers and a reliance on borrowing. By the end of 2007, it was claimed, the market was firmer, much more evenly spread across nations and less dependent on borrowed money. Indeed, demand continued to soar in the opening half of 2008, with both Christie’s and Sotheby’s seeing Impressionist and Modern paintings going for well above their expected prices. Again, the Russians were among those leading the charge.
In many ways the contemporary art market from 2005 had much in common with the market for top-priced housing. Demand was fuelled by speculation, a kind of desperation to buy. Buyers reported a surge in ‘art gazumping’ in which desperate collectors allegedly offered tens of thousands of pounds on top of an accepted price as bribes to secure work that had already been sold. In a duel over one painting in a sale of Russian work at Sotheby’s in 2007, one private Russian buyer threatened to ‘thump’ his rival. One long-term observer of the art scene, asked when the boom might turn to bust, replied, ‘I cannot speculate on how long it’s going to last because it has nothing to do with the art any more. You could be talking about tulip bulbs.’7
The Russian interest stems from a number of motives. Some see investing in art as a way of making even more money: it’s another place to put their cash, a kind of portable wealth. According to Janna Bullock, a Russian-born property tycoon and art collector married to an American, who now lives and works in New York, ‘Most of the Russians are amateurs and just follow the trend.’8 Fedor Pavlov-Andreevich, the head of a Moscow foundation that raises money for art projects, has said that ‘Russian tycoons want to become the twenty-first-century equivalent of the nineteenth-century art patrons. We’ve had nearly a hundred years without such patronage. The Russians now want their names known through art.’9
Another, more basic, human instinct has also been at play - the need for tangible signs of success and social standing. For some, accumulating wealth is enough of a drive in itself. Many collectors prefer anonymity, but many of the mega-wealthy - not just the Russians - have an innate need to display the proceeds of their success and to be seen to be doing so. That sort of attitude is hardly new. In 1819 the English essayist William Hazlitt described it succinctly, ‘Man is a toad-eating animal. The admiration of power in others is as common to man as the love of it in himself.’10 The editor of the art quarterly State of Art wrote in the spring 2007 edition of the magazine that you cannot find anyone today quite so pleased with themselves as the top-end collector of contemporary artworks. ‘During the last twenty-five years, major auctions of paintings, once the province of the professional dealer and gallerist, have become black-tie social events where a successful bid results in ecstatic applause. We were supposed to be impressed with the everincreasing amounts paid for individual works as they unfolded, eulogised in newspapers and television reports…What is clear is that any individual prepared to pay large amounts of money for art in this new, highly public arena, would have society, the art trade and the media lining up to lick their boots. And this is the irresistible factor for those enjoying wealth without merit in our post rock’n’roll era.’11
Although great and memorable art has always been traded for its show power, this motive may have become even more dominant in recent times. It may be partly a financial game for today’s ‘quick rich’, but it is also a statement of social arrival providing what one has described as ‘bragging rights’. As William Cash describes the process, ‘While much of the new art market boom is created by greed, an even greater motivation is social status. Many of the collectors who fly into Miami or London’s Frieze are simply trophy hunting.’12
Russian art lovers also started investing at home. Such was the growing demand that Bonhams, Christie’s, and Sotheby’s began regular sales of Russian paintings along with artefacts ranging from Fabergé jostles to Imperial-era porcelain vases and Soviet propaganda plates. One of those leading the charge for Russia’s artistic heritage was Yelena Baturina, the wife of Yuri Luzkhov, the Mayor of Moscow. A lavish investor in art and one of the world’s leading collectors of Imperial-era porcelain, Baturina became a regular visitor to London.
The renaissance of the Russian collector brought a huge increase in the value of sales of Russian art in London. Jo Vickery, a Senior Director at Sotheby’s, said that the auction house sold $189 million worth of Russian art in 2007, compared with £4 million a decade earlier.13 Petr Aven, known as the intellectual oligarch, and with one of the most prestigious collections of Russian art, summed the Russian attitude up as follows, ‘I did care about prices but, believe me, when I wanted to buy something I didn’t care about the price.’14 According to Sotheby’s UK chairman, Lord Poltimore, speaking in late 2006, ‘Pretty well anything Russian is very hot at the moment and the buyers are 99 per cent Russians. The buyers are mainly oligarchtype people who have been buying houses all over the world and now want some art to put in them.’15
That may be only part of the explanation. London-based Russian journalist Margarita Stewart, the daughter of a former KGB colonel, has another theory. ‘Buying up the world and buying precious Russian art is a substitute for the loss of empire,’ she opined. ‘Russians have had an empire since Peter the Great. Then there was the vast Soviet Empire. It’s in the blood. Rich Russians are really showing the rest of the world how great we are again.’
The collectors include rich Russians and Eastern Europeans. Many of them move in the shadows and shun publicity, providing an opportunity for endless speculation in the art world. Buyers, often using intermediaries, may not even be known to the auction houses. With the Russians enjoying multiple homes on multiple continents, it is also far from clear where the artworks will end up.
Speculation continued for months about the buyer of Picasso’s Dora au Chat and Peter Doig’s White Canoe, until it was established, a year later, that it was the Russian mining magnate Boris Ivanishvili. The bidding for the Picasso had been undertaken by one of his employees, while his nephew Gher Ivanishvili was the intermediary for White Canoe. The dark-haired Gher relished inventing different names for his client to journalists to put them off the scent.
A billionaire Georgian-born financier from the Black Sea, Ivanishvili made his money initially through mining and banking. He then sold his metallurgical assets to other tycoons, netting around £1 billion. Ivanishvili is believed to be one of the twelve biggest private collectors in the world, the largest of whom is probably the American media mogul David Geffen, himself the son of Eastern European immigrants. When the Picasso masterpiece was flown back to Tbilisi, the airport was closed down to ensure the security and safe transfer of the painting.
There is another group of players active in the sudden surge in demand for historic Russian art - those buying back former prized pieces lost to the nation in the aftermath of 1917 when they were sold off to foreign buyers. This might be called the ‘Putin factor’. In September 2007 Sotheby’s was on the verge of auctioning the entire and much-prized collection of the late Russian musician Mstislav Rostropovich (exiled from the Soviet Union in 1974), which included a number of highly valued paintings, including Faces of Russia by Boris Dmitrievich Grigoriev, often seen as the greatest Russian work to leave Russia after the Revolution. Then suddenly, on the eve of the sale, the auction was cancelled, as the entire collection had been bought outright for some £25 million by a Russian billionaire who had promised to return it to Russia.
The auctioneers initially refused to reveal the identity of the buyer but he was later named as Alisher Usmanov, who only a few weeks earlier had invested heavily in Arsenal Football Club. Born in Uzbekistan, Usmanov had accumulated a fortune from metallurgy estimated at some £2.75 billion and planned to put the collection on permanent display at the Konstantin Palace near St Petersburg. He has a Tudor manor house set in 300 acres of Surrey countryside, as well as mansions in Hampstead, Moscow, and Italy. Usmanov is another to come to Britain with a controversial past. In the 1980s he served a six-year jail sentence for fraud. He has always claimed he was the victim of a local KGB power struggle and his convictions were indeed later overturned by the supreme court in Tashkent in 2000. He told the Guardian, ‘All the charges I faced in 1980 proved to be trumped up. There was a rehabilitation order by the Uzbekistan Supreme Court admitting that the alleged crimes never took place.’16
The purchase of the collection was widely seen as a deliberately patriotic gesture by an oligarch keen to keep on the right side of the President. In 2004 Usmanov was awarded the Presidential Medal of Honour by Putin for services to business and charity. In 2006 he bought the Russian paper Kommersant, once owned by Boris Berezovsky, for a reported £100 million, a purchase that looked like yet another example of the Kremlin taking control of the media.
Usmanov was just one of the oligarchs currying favour with Putin. One by one they started buying up art that had been lost to Russia and investing in Putin’s favourite social projects, all designed to counter criticism that the oligarchs enriched themselves and exported their wealth abroad without giving anything back.
Buying the world’s rarest and most expensive paintings has always been a privilege open only to the mega-rich. Once you have the mansion, the diamonds, the jet, and the yacht, making a statement requires moving on to possessions that not only inspire envy but are both unique and precious. As Joseph Backstein put it, ‘It’s the logic of consumption. What is a rich Russian? It means you must have an apartment in Moscow, a Bentley, a dacha on Rublyovka, a house in London, a villa in Sardinia, and a yacht. Then you must buy modern art.’17
The Russians may appear to be relative novices at the trophy asset game, but they have certainly not been slow in catching on. One leading art collector calls them the ‘big game hunters’. The process began in Russia itself, where, in the 1990s, both Vladimir Gusinsky and Boris Berezovsky consolidated their power by building big media empires: in Berezovsky’s case following in the footsteps of his hero Rupert Murdoch. The Russians have done so with rather more mixed results. All of the major oligarchs have lost their former media empires and most former independent television stations are now back in the hands of the state.
None of this means that the super-rich easily throw money away. George Orwell once remarked of Charles Dickens’ character Mr Jarndyce that nobody who has spent so much effort making a fortune would give it away so easily.
For the oligarchs the trophy asset does not stop at media empires, the rarest works of art, or the world’s top football clubs. It appears that money brings another perk: not just the beautiful blonde wife, invariably half their age, but the model mistress as well. In 2007 television host Oksana Robski and society girl Ksenia Sobchak published a light-hearted book, Married to a Millionaire, a tongue-in-cheek, do-it-yourself manual on how to ensnare an oligarch. Both authors are pictured on the front cover in risqué evening dresses toting machine guns. As the back cover blurb puts it, ‘There are enough oligarchs to go around’. The book begins by wishing readers ‘happy hunting’ and advises girls to start planning for divorce on the wedding day itself, reflecting the fact that most oligarch marriages end in divorce. Abramovich and Khodorkovsky have had two wives, as has Berezovsky. They tend not to introduce their spouses as their wives, rather, ‘This is the mother of my children’.
Russian women know the rules only too well. Lena Lenina, a woman who once made it to number thirty-two in FHM Russia’s ‘babe rankings’, claims in her book Multimillionaires that 80 per cent of wealthy Russian men have mistresses, often with their wives’ knowledge. As the French have in certain circles for centuries, so the wives tend to turn a blind eye. According to Lenina, who lives in Paris, Russian wives rarely complain for fear of losing their social position. ‘The wives will be socially and financially dependent on their rich husbands,’ she writes. ‘They are terrified of divorce - Russian courts often favour the husband and the wives could end up with nothing.’
For some oligarchs, ruthlessly trading in their wives for a younger model is like buying a new car. Because Russian men are notorious for making miserly financial settlements, Russian women are advised to acquire a marriage contract to protect themselves. One wife of a rich Russian, Tatyana Ogorodnikova, said that many Russian women tolerate infidelity by husbands who maintain multiple mistresses and order up glamorous prostitutes as if they were takeaway pizzas. In her novel A Marriage Contract Ogorodnikova explains that Russian wives need to be in a position of power by increasing their value to their husband. She tells her readers that they must surround themselves with powerful men to keep their husband jealous and pursue a career as a pop star or actress to remain high profile.18
Impatient, frenetically busy, and impulsive, some newly-rich Russians prefer to buy their women. When one Russian businessman was asked why he spent £12,500 for sex for just one night, he replied, ‘Because she will leave in the morning.’ One escort service in Moscow matches models with multi-million-aires. If the woman is hired by the agency, it is her ticket out of deprivation into the good life. But she needs to be staggeringly beautiful. The agency charges $10,000 just for an introduction, $20,000 if they meet in person, and $50,000 if the relationship develops. It is also customary for the businessman to give the woman a car such as a BMW X5 or a Porsche Cayenne as a thank you after their first meeting. In the autumn the manager of this agency scouts the fashion shows in New York, Milan, and London in order to recruit new models.
In Russia the life of a ‘sponsored woman’ does not carry the same social stigma as it does in the West. They want a comfortable life of luxury and this is often the only way to obtain it. They also know that after the age of thirty they are likely to be surplus to requirements and so they need to acquire as much jewellery, and as many cars and flats, as possible. Russian women sometimes claim that the line between mistress and prostitute is very thin for the rich. ‘If a woman marries or has an affair with a man purely for his money, does that make her better than a call girl? I don’t think so,’ one lawyer who worked in Moscow commented. For some Russian women, being a mistress offers liberation from poverty and a possibly loveless marriage to a Russian man who is often drunk, lazy, and unemployed. Many move abroad for a new life. In the winter they flock to Courchevel. In the summer they descend on the Côte d’Azur and Dubai.
But London remains the prize destination for the ambitious statuesque Russian woman. Wealthy English tycoons are sitting ducks for these strikingly beautiful but calculating seductresses. One well-heeled private banker had a long-standing affair with a London-based Russian businesswoman and she was given a flat in Knightsbridge. But when she demanded that he should leave his wife and marry her, the banker refused, whereupon negotiations began. The mistress consulted a lawyer who had once worked in Moscow but left to ‘represent’ such women in London. After some acrimonious, blood-curdling conversations, the businesswoman was paid off to keep quiet.
Based in her vast house in the capital, the same lawyer, who used to work in the City, developed a new career. After taking the children to school, she would spend the rest of the morning on the telephone to the mistresses. The negotiations were often crude, the mistress threatening to go public or to tell her lover’s wife and the tycoon offering a monthly retainer to buy her silence. The only issue was how much.
Of course, most Russian women in London are neither mistresses nor predators. Many are educated, elegant, and erudite, albeit with irresistibly long legs and high cheekbones - a lethal combination. For the ladies of Londongrad, the English complement the qualities they themselves possess. ‘There’s something about the English sense of tolerance and love of tradition that marries very well with Russian passion,’ said Oksana Kolomenskaya, a charismatic art dealer.19 ‘Russian men are absolutely fascinating,’ said one London-based Russian woman. ‘They’re men of extremes. If they love you, they love you forever. They like magic, fantasy, romance, champagne. And they always find the right words. If you want true romance, go out with a Russian. But if you want a good marriage, find an Englishman.’20
One of those living up to the reputation for ‘trading in’ is Roman Abramovich. Some considered his divorce from Irina in the spring of 2007 inevitable. Sooner or later, it was said, he was bound to hitch up with a new and younger woman, and when he did, it was with art lover and successful fashion designer Daria Zhukova - ‘Dasha’ to her friends. Until she met the Chelsea owner, Dasha spent most of her time at a £1.5 million penthouse in York House, a Kensington mansion block apartment bought for her by her father, Alexander Zhukov. Zhukov started out as an assistant film editor, made his money in oil in the early 1990s, and then, along with a number of other oligarchs, founded his own bank. Once close to Mikhail Gorbachev and Boris Yeltsin, he is now a British citizen and operates from offices in Park Lane, distinguished by the brace of Rolls-Royces parked outside.
Dasha’s mother is a molecular biologist who lectured at Oxford and then UCLA after separating from her husband when her daughter was young. Dasha was sent to a British private school, holds a degree from the University of California, and first captured the public’s attention as the girlfriend of Russian tennis ace Marat Safin. She featured in a special edition of Vogue in 2006 along with a number of other glamorous young Russians. But despite her connections with young, hedonistic, international socialites like fellow Russian Natalia Vodianova and the British aristocrat Sophia Hesketh, she resents the ‘party-girl’ tag. She did a homeopathy course at the London College of Naturopathic Medicine near Oxford Street, before launching her leisurewear line Kova & T.
Some say that Abramovich went to great lengths to keep the relationship a secret, others that he flaunted it just as much as he does his wealth. He took her everywhere with him. The two were spotted together in the twelve months after they met in Moscow, Spain, London, Tel Aviv, and Paris and were soon being photographed together. She had also been to watch Chelsea as his guest. Abramovich may have hoped to juggle Irina with Dasha but neither Putin nor Dasha’s father approved. Irina was reportedly devastated by the revelations and was not prepared to stay in a dual relationship.
Irina responded by going her own way, jetting off to the South of France with girlfriends or dining at smart West End restaurants. According to Abramovich’s biographer Chris Hutchins, she then got her own personal trainer who came to their house at Fyning Hill every morning to oversee her workout.21
Despite his links with London, Abramovich insisted on the divorce taking place in Moscow where, as oligarchs’ wives have found to their cost, the courts are indeed much more generous to the husband than to the wife. One industrialist, estimated to be worth £350 million, was said to have left his ex-wife with just a council flat and a Lada. By executing his divorce in Moscow, Abramovich would have saved himself a good deal of his fortune. But Abramovich was anxious to ensure that his children were well looked after. As part of the highly secret settlement, he handed over the Chester Square house, the Fyning Hill estate, and the use of his Boeing 737 and his yacht Pelorus. Indeed, Irina was using the jet regularly to fly between Moscow and London before the divorce, and it was not until eighteen months later that she finally broke the silence, describing her life with her billionaire husband as ‘no fairy tale’. She told the Russian edition of OK! magazine that she hated being surrounded by bodyguards and lived in fear of their children being kidnapped. ‘For my security and that of the children we hired bodyguards. We changed mobile phone numbers once a week so nobody could trace my whereabouts.’
Another benefit for the rich of divorcing in Russia is that the courts do not delve too deeply into a couple’s business dealings. If it had taken place in Britain, Abramovich would have faced the prospect of having his assets and the source of his wealth formally recorded, with the media salivating over every detail.
At first Abramovich’s relationship with Dasha Zhukova ran far from smoothly. After all, he would appear to be the last person to be interested in art and fashion. Although Irina is interested in art, her husband was rarely seen at the kind of exhibitions enjoyed by his former wife. It is even claimed that when he bought his first big flat in Moscow in the early 1990s, he told the interior designers that he didn’t want any space for books, but just to install panels that looked like them. Not so long ago he was commissioning the legal forger Daniel Ermes Donde to paint a fake van Gogh and a fake Gustav Klimt.
However, his new girlfriend appeared to penetrate his philistine armour. In the summer of 2008 Abramovich joined the ranks of the art world’s biggest spenders, splashing out £43 million for Francis Bacon’s Triptych, £17.2 million for Lucian Freud’s Benefits Supervisor Sleeping, and, reportedly, £7.5 million on a bronze sculpture by Giacometti. Not exactly a modest start for a first-time art buyer. Although the acquisitions are likely to end up in Abramovich’s grand London home, this sudden arousal of interest in art was influenced by the cultured and hard-working Dasha. In the same year she opened her own upmarket gallery - the Centre for Contemporary Culture, also known as the Garage - in Moscow.
The gallery, set in a former bus depot designed in 1929 by the celebrated architect Konstantin Melnikov, is a work of art in its own right. Dasha, with wealth from the success of her fashion label as well as her inheritance, has poured money into the project, which is being coordinated by Molly Dent-Brockle-hurst, Damien Hirst’s agent and a former Senior Specialist at Sotheby’s. The gallery was also taking advice from Tate Modern’s director, Sir Nicholas Serota, the most powerful man in the British art scene, and was opened at a lavish launch in June 2008. By all accounts it was some party, attended by 300 members of the art and fashion world’s most powerful figures, including conceptual artist Jeff Koons, designer Marc Newson, and international gallery owner Larry Gagosian. According to one guest, ‘Everyone was knocking back the vodkas but Dasha remained composed.’22
The launch culminated with a private performance by Amy Winehouse for a fee close to £1 million. A short while before Abramovich also splashed more than £200,000 on a sixteenth birthday party for his daughter at the London nightclub Paper, hiring top Mercury prize-winning indie band The Klaxons and the Brazilian electro band CSS to provide the entertainment.
Hiring rock stars has become something of a trait among the Russians. In 2005 Alexander Lebedev flew Rod Stewart to Moscow for a concert at the Kremlin. For his wedding in the South of France in 2005, Andrei Melnichenko hired Whitney Houston and Christina Aguilera. Guests included President Putin at the weekend ceremony at one of the coal magnate’s six homes in the Cannes region. The chapel of a Russian Orthodox Church was taken apart bit by bit, flown to Cannes and reassembled for the service. Catering was provided by Michelin-starred chef Alain Ducasse, who charges £7,000 an hour. Despite costing a reported $40 million, it would not have burnt too much of a hole in the billionaire’s pocket.
Two years later, in April 2007, Melnichenko went one better and hired Jennifer Lopez to perform for forty minutes at a lavish party at his Harewood estate in Berkshire. The singer reportedly received a fee of £600,000, while a further £400,000 went on flying in her entourage and putting them up at a top London hotel. The party was to celebrate the thirtieth birthday of Melnichenko’s wife, Alexandra Kokotovic, a Serbian pop singer and former Miss Yugoslavia who herself has a passing resemblance to J-Lo. The sixty guests at the heavily guarded party - said to have cost £3 million - included Abramovich and Dasha, as well as other Russian and Serbian tycoons.
In the summer the Côte d’Azur is a favourite haunt of the hedonistic oligarchs. Although there are plenty of yachts owned by fellow billionaires, Mohamed Al Fayed, Saudi Arabia’s Prince Alwaleed, and Bob Manoukian, the Armenian businessman based in Belgravia, it is the Russians who have dominated the moorings on France’s southern coastline in prime marinas such as the Cap d’Antibes. These moorings cost around $100,000 a week for super-yachts. In 2004 Dame Shirley Bassey complained that Abramovich’s 370-foot yacht Le Grand Bleu, moored in Monte Carlo Bay, was ruining the view from her apartment.
The most expensive villas in the area - which cost upwards of £12 million - have in recent years been increasingly snapped up by Russians, and not just Berezovsky and Abramovich. In March 2007 London-based Leonid Blavatnik bought the legendary Grand-Hôtel du Cap-Ferrat, a magnificent white palace in one of the world’s most exclusive resorts. The hotel’s guest list reads like a who’s who of European royalty, celebrities, and political leaders, and past guests have included Winston Churchill, Leopold II of Belgium, Charlie Chaplin, and Pablo Picasso. Blavatnik snapped up the seven-acre hotel, as well as the five-star Hôtel de Vendôme in central Paris for a reported combined total of £146 million.
Locals have become used to the ostentation and excess of Russian money: the yachts, convoys of black limousines, chauffeur-driven Bentleys, Michelin-starred restaurants, wild champagne parties, and high-class hookers. Not for nothing has St Tropez become known as a ‘twenty-first-century Sodom and Gomorrah’. During August, much of the Russian glamour set decamps from their Knightsbridge and Moscow apartments to descend on the French Riviera. Today the club scene has become increasingly international. Part of the ritual is the annual beach party in Ibiza over the August Bank Holiday organized by Boujis nightclub, all part of a global scene in which international clubbers flit between London’s West End, St Tropez, the Maldives, and the Caribbean.
During the winter, the Russian nouveaux riches would flock to Courchevel, the luxurious French ski resort in the Alps. Several members of the ‘family’, including Berezovsky, Tatyana Dyachenko, and Abramovich, have been regular visitors since the mid-1990s. In 2007 an estimated 15,000 Russians visited in the winter season, concentrated in the first two weeks in January during the celebration of the Russian Orthodox New Year. Menus in the more exclusive restaurants and hotels are printed in Russian, as are signs to hotels and ski slopes. The Russians have greatly outspent other holidaymakers, colonized the most expensive chalets, hotels, and restaurants, and hired the best ski instructors.
Since the start of the new millennium, profits at the top hotels, restaurants and bars, designer jewellers, and boutiques have soared based on what one local describes as ‘an annual orgy of conspicuous consumption’. Quickly learning Russian taste, jewellers at Courchevel would ensure a ready supply of watches and mobile phones encrusted with diamonds.
No expense has been spared when it comes to partying. Renting a top chalet in the resort would cost £25,000 a week. The favoured haunt of the Russian business elite has been the five-star Byblos des Neiges, which stands at Courchevel 1850, the highest of the four villages in the exclusive resort, and where prices would start at £1,200 per night. The hotel attracts film stars like Bruce Willis and supermodels like Naomi Campbell as well as Russian billionaires. The hotel’s famous nightclub, Caves du Roy, charges £2,000 for jeroboams of Cristal and Krug Grande Reserve, while a portion of Beluga caviar costs £500. As well as the visitors, armies of young women are flown in for the ‘season’, while Russia’s top rock bands like Zveri are also hired by the billionaire guests.
Others viewed this circus rather more darkly. Writing in January 2004, nearly three years before she was murdered, the journalist Anna Politkovskaya contrasted the fate of orphans in Russia with the antics of her super-rich fellow citizens: ‘Meanwhile, our nouveaux riches are skiing this Christmas in Courchevel. More than two thousand Russians, each earning over half a million roubles [£10,000] a month, congregate for the “Saison russe”. The menu offers eight kinds of oysters, the wine list includes bottles at £1,500, and in the retinue of every nouveau riche you can be sure of finding the government officials, our true oligarchs, who deliver these vast incomes to the favoured two thousand. The talk is of success, of the firebird of happiness caught by its tail feathers, of being trusted by the state authorities. The “charity” of officialdom, otherwise known as corruption, is the quickest route to Courchevel.’23
The arrival of the Russians in Courchevel has long divided local opinion as well. In the early days the Russians gained a reputation for vulgarity and lavish spending at a level never before seen in the resort. Hoteliers remember how they would knock back Chôteau Petrus at several thousand pounds a bottle, often laced with vodka. ‘They were quite a problem to start with,’ said one hotelier. ‘Every day we worried ourselves sick about what their next demand might be. They might want the pool opened at midnight, caviar delivered to their room at 3.00 a.m., or a limo in front of the hotel in three minutes. In the restaurant they would order all their dishes at the same time, send back what they no longer felt like eating, and query the bill. And if we didn’t meet their requests, they made a terrible fuss, screaming and threatening to leave the hotel immediately. They drove us up the wall.’24
But gradually things began to change, with some Russian visitors realizing that throwing their weight about was bad for their image. They started to behave themselves. Later Russian visitors, many of them members of the newly emerging business elite - senior executives, entrepreneurs, and international bankers - have tended to behave less boisterously and more discreetly. This does not mean the partying and spending have stopped, far from it; but it is mostly less conspicuous and less riotous. It also does not mean they are popular with everybody. Many chalet staff refused to work with Russians, such was their reputation for rudeness.
One of the most notorious visitors to Courchevel has been Mikhail Prokhorov. Sometimes described in Russia’s tabloid newspapers as ‘Nickel to Knickers Prokhorov’, the oligarch, who also has a home in London, built his multi-billion-pound fortune through mining with a substantial minority stake in Norilsk Nickel, the former state-owned company he acquired with Vladimir Potanin. The company produced one-fifth of the world’s nickel, a key alloy in stainless steel, and in 2006 had profits of some $6 billion.
On the night of 7 January 2007 the mining tycoon, dubbed the ‘most eligible bachelor in the country’, was living up to his playboy reputation, partying in the company of stunning young women. Out of the blue the nightclub was raided by fifty French police, who snatched the man known locally as ‘Our Gatsby’ on suspicion of running a ring of high-class prostitutes. Prokhorov was taken to police headquarters in Lyons together with twenty-four others, including seven Russian women aged about twenty. Although all those arrested were later released without charge, news of the incident soon appeared in Le Progress, a Lyons newspaper. Prokhorov told police that he liked the company of intelligent women and had met the women in restaurants and nightclubs in Russia.
Prokhorov’s winter jaunts had got him into difficulties before. According to officials in Ottawa, the Canadian government had refused to grant visas to a group of female companions accompanying him on a winter vacation to Canada two years earlier. Prokhorov was offered a visa, but his entourage was not.25
Prokhorov was not very pleased with the publicity but he could hardly complain. After all, partying is in the Russian blood. As the oligarch once told an interviewer, entertaining embodied his personal philosophy. But fortune seemed to be deserting the billionaire, for the revelations did not play out quite so well back at home.
The story was splashed across Russian newspapers and television stations. Soon Prokhorov was a household name and everyone knew about his extravagant international lifestyle. Two months later the event was even satirized in an advertisement for fruit juice shown on state-controlled television. The ad, which of course did not name Prokhorov, featured a newscast of police escorting a line of young women wearing lingerie and fur hats, followed by a tycoon in a bathrobe. The ad cut to a woman in a Russian apartment watching the news. The tagline was: ‘Some enjoy fantasies of the good life. Others drink juice.’
Across Russia the antics and excesses of some of the oligarchs, so disdainfully dismissed by the late Anna Politkovskaya, have been treated with weary contempt by ordinary people. While parts of Moscow have been turned into another super-rich playground hosting millionaire fairs and exhibitions such as the Extravaganza Show, the international spending spree has been a world apart from the experience of ordinary Russians. The great majority of the population have walked a spending tightrope, forever worried about how to pay for the doctor if they are ill or how they can afford to pay the military to keep their sons out of Chechnya. According to the World Health Organization, male life expectancy has declined since the Soviet era to the age of fifty-six. The country has one of the lowest minimum wages in Europe and is one of the most unequal countries in the developing world. In contrast to the unrestrained international spending of Russia’s billionaires and multi-millionaires, the bulk of Russia’s population remain pitifully poor.