“For years, my main approach to investing had been shareholder activism. In Russia that meant challenging the corruption of the oligarchs, the twenty-some-odd men who were reported to have stolen 39 percent of the country after the fall of communism and who became billionaires almost overnight. The oligarchs owned the majority of the companies trading on the Russian stock market and they were often robbing those companies blind.”

Since the fall of the Soviet Union, the oligarchs have engineered an economic coup, taking over much of Russian manufacturing. They compete with each other and the Russian government for control and influence. Sometimes, they extract their own company’s resources to finance these conflicts, either out of sheer greed or to damage their own companies to discourage foreign investors, whom they are less able to control and who constitute the wild cards in their game of power. Browder and his Hermitage Capital investment team are a case in point.

“I decided that I wanted to become the biggest capitalist in Eastern Europe.”

Browder rebels against his family’s communist roots and chooses a contrarian path, not merely as a capitalist, but as an investor in the very heart of Marxism: Eastern Europe. This is where his famous grandfather, Communist presidential candidate Earl Browder, began his political journey.

“I didn’t know it at the time, but this scene in the lobby of the Sunstar Park hotel was the infamous ‘Deal with the Devil,’ where the oligarchs decided to throw all their media and financial resources behind Yeltsin’s reelection. In exchange, they would get whatever was left of the unprivatized Russian companies for next to nothing.”

President Boris Yeltsin, struggling in his re-election bid, favors market reforms, while his chief opponent, Communist candidate Gennady Zyuganov, supports Marxist socialism and government ownership of industry. A Zyuganov win could undo the privatization efforts and the large-scale capture of industry by the oligarchs. The billionaires pool their resources to do whatever it takes to re-elect Yeltsin.