Hanging with Mr. D
Ever wonder what it’s like to hang out with a Russian oligarch?
The answer to that question is found in one of the interesting stories that that didn’t quite fit into my book: The trip to Oleg Deripaska’s chalet in Siberia.
It’s a story that lifts the veil of secrecy on the world of extreme luxury inhabited by well-connected Russian oligarchs like Deripaska — a member of Putin’s inner circle — and how they use their extraordinary wealth to cultivate influential friends and business partners.
The Siberia trip also involves Nathaniel Rothschild, the scion of the wealthy British banking family. Rothschild was an advisor to Deripaska and his fortunes were deeply intertwined with that of the Russian oligarch’s. It was Rothschild who in 2004 introduced Deripaska to Paul Manafort, Trump’s now jailed former campaign chairman, who made millions working for the man he called “Mr. D.”
Deripaska and Rothschild’s Siberian adventure began at the 2005 World Economic Forum, the annual gathering of the superrich in Davos, Switzerland. (Rothschild lives in the village of Klosters outside Davos.) At Davos, Rothschild and Deripaska met at a dinner and discussed a possible Russian gold-mining joint venture. A year later, Deripaska would use the occasion of the WEF to meet Sen. John McCain in Klosters with the help of Manafort’s partner Rick Davis.
Immediately after 2005 Davos wrapped up, Rothschild flew in his own plane from Switzerland to Moscow to continue the discussions. On board Rothschild’s plane was Peter Munk, a Canadian gold mining and owner of Barrick Gold, (Munk hosted the dinner for Deripaska and McCain in Klosters, Switzerland in 2006). Also on board was Lord Mandelson, then the EU commissioner for trade as well as a close advisor to then British Prime Minister Tony Blair.
Mandelson had no visa for the impromptu visit to Russia, which caused a bit of a problem. According to UK’s Daily Mail, getting Mandelson into Russia required the intervention of Deripaska’s head of security, Valery Pechenkin, an ex-KGB officer as well as a former deputy director of the FSB (successor to the KGB). Pechenkin was recently installed as CEO of Basic Element, Deripaska’s holding company.
Upon arrival in Moscow, Mandelson and Rothschild met Deripaska for dinner in a large private room at a fashionable Tuscan restaurant. At the dinner, Deripaska and Alcoa’s then CEO Alain Belda were celebrating. Deripaska’s Rusal, the world’s biggest aluminum company, had just sold two aluminum-fabricating mills to Alcoa. (Rothschild was on the international advisory board of Rusal.)
The presence of Lord Mandelson at this fancy dinner would later cause a minor scandal in Britain three years later. As EU trade commissioner, Mandelson oversaw aluminum tariffs. Both of the mills sold to Alcoa were subject to EU tariffs, and a London judge found that there was reason to believe he had discussed aluminum tariffs with the Russian oligarch. Mandelson also had an unofficial meeting with Russian Finance Minister Alexei Kudrin.
It was an example of how Rothschild “sought to impress and keep close to him Mr. Deripaska” by bringing Lord Mandelson along on the trip, as another British judge put it. But Deripaska was also trying to impress Rothschild and Mandelson.
Later that evening, after the celebratory dinner, the three men boarded luxurious Deripaska’s private plane, and made the four-hour flight to Abakan in Siberia. (Rothschild’s plane, apparently empty, followed them to Siberia.) They spent a “nanosecond” touring a smelter, as Rothschild put it, and then moved on to the real purpose of the trip: A night at Deripaska’s compound/chalet at a ski resort in the middle of Siberia.
During their 24 hours at Deripaska’s Siberian chalet, (not to be confused with another chalet the oligarch owns outside Moscow), the group went skiing, played a friendly game of five-a-side soccer and a game of ice hockey under the floodlights with some of the locals who worked for the oligarch. Then they had dinner, were entertained by a Cossack band, and played some games of Russian billiards. The average temperature was -28 Celsius but they had cozy cossack hats to keep them warm:
For Rothschild, the highlight of the trip was Deripaska’s banya (Russian sauna), which he still recalled fondly years later:
The whole point of the Siberia trip was that we went there, we arrived, we spent a nanosecond at this smelter. We then went, had the most delightful banya, where we were beaten [with twigs] by a 21 year-old Russian banya keeper, man. You know, who spends his entire life perfecting the art of the banya, and then we got out and we jumped into ice cold water. … Then we got into the banya. We got out, we got back in, and it was just — it’s the best way in the world to cure jet lag and everything else, and it was — you know, we had a wonderful time, and it was incredibly enjoyable, and everyone, you know, woke up the next day to go to Tajikistan feeling revitalized and over the moon, and completely excited by the fascinating day that we had spent in this wonderful wilderness in the middle of nowhere….”
Rothschild’s endorsement of his state-of-the-art banya seems to have started a fad for the Russian saunas in London.
This whole banya story is well-known in Britain because Rothschild sued the parent company of the Daily Mail newspaper for libel over a 2010 article about the Siberia trip. Rothschild felt the article portrayed him as a “puppet master … dangling his friend Lord Mandelson in front of the Russian oligarch Oleg Deripaska to ease the passage of colossal business deals,” as the Independent wrote. Rothschild lost.
[Read the Daily Mail’s defense submission and the judge’s ruling.]
The real puppet master, however, is not Rothschild but Deripaska, whose mix of business and pleasure many people seem to find intoxicating.
Manafort was trying to use his position in the Trump campaign in 2016 to get back in Deripaska’s good graces despite owing him $19 million.
Lord Mandelson spent some time on Deripaska’s superyacht, the Queen K, on the Greek island of Corfu in the summer of 2008. George Osborne, another UK politician, also climbed aboard the Queen K that summer in Corfu. (According to Rothschild, Osborne tried to solicit a £50,000 donation to the conservative party from the Russian oligarch.)
This wild Rolling Stone story has Deripaska’s lawyer Adam Waldman leaving Johnny Depp’s London mansion for a cross-country skiing trip with his oligarch client. (Deripaska stays fit with vigorous bouts of cross-country skiing.)
Earlier this year, Mandelson and Rothschild attended a lavish party that Deripaska threw at Davos featuring boats of caviar, magnum bottles of Dom Perignon and a performance by Grammy winner Enrique Iglesias. More recently, Rothschild has been hired to help get Deripaska’s Rusal off the U.S. sanctions list.
Those who spend time in Deripaska’s presence can’t seem to get enough.
John le Carre employed that story, heavily disguised, in his novel ‘Our Kind of Spy’, about a Russian oligarch who wants to defect to spill the beans about hot Russian money in the British financial system……
I’m intrigued by your insights on Deripaska, as I have followed him as best I could from the Western press for years. I search my email every morning for a new post from your blog or some piece by Amy Knight — which is harder to find in the Daily Beast or the Daily Kos. Yesterday’s new book by Malcolm Nance is predictably fascinating. Much has already been out there, but there are some new and fascinating tidbits. Time to re-read and absorb more of my own library (most important: your book), before the Gorbachev books I just ordered arrive. Thanks for all your information and understanding that you so generously pass on to your readers.