Moscow's Domodedovo Airport Dispute Epitomizes Russian Capitalism |
When a book is someday written about the life and death of private business in Russia, the story of Domodedovo Airport will surely have a well-deserved feature. It encapsulates not only the rise and disappearance of Russian free enterprise, but arguably the history of the country itself.
As the old joke that dates back to the end of the U.S.S.R. goes, Russia is bad at adding and multiplying but good at dividing and taking away. The saying neatly captures the twists and turns of the era we have lived through (but don’t be fooled — it is not over). It also answers perennial questions like why Russia never managed to become a prosperous and calm member of the club of advanced nations despite its vast wealth of natural resources and bright, skilled citizens
Still, the seizure of Domodedovo deserves special attention. It neatly brings together the gangster lawlessness of the 1990s, the crude greed of an emerging bureaucracy, the rise of the FSB’s business empire and the full ascendance of an elite that originated in the backwaters of the Ozero cooperative and basement fight clubs, but consolidated its power behind the Kremlin walls.
In the early 1990s, Domodedovo was a dump. Not just any dump, but a criminal one. It was a major hub for shuttle traders and contraband and was controlled by the Orekhovskaya crime group.
Into this swamp stepped Dmitry Kamenshchik. In one of his rare interviews, he later said it was almost accidental: a group of impoverished students founded East Line and decided to go into freight forwarding, since it required no capital. At the time, shuttle traders needed someone to manage the logistics of their operations that were clothing and feeding the country. There were many such firms in the early 1990s, but only one eventually became the owner of an airport, turned it into one of the country’s main hubs and pushed out both criminals and the state itself.
Domodedovo was never privatized through the loans-for-shares auctions. Kamenshchik developed it in partnership with a state management company and, after that company went bankrupt, bought out all its shares.
The first case against Kamenshchik stemmed from this arrangement. He acquired the shares during the 1998 crisis and, by 2003, the airport administration — which had........