Red notice

16. Tuesdays with Morrie

The year of 1999 was the worst of my life, and I hoped that the new millennium would bring some positive changes. But as New Year’s came and went, it was hard to see how anything was going to get better.

It didn’t help that everyone I knew in Moscow had left. I’d had a Thursday night poker game with expats and English-speaking Russians, and, at its height in mid-1997, thirteen people regularly attended. But by January 2000, I was the only one left. It was like being the last passenger at an airport baggage carousel. Everyone else had gotten their luggage and gone home, but I was standing there all by myself, watching the creaking metal track go around and around, waiting for my bag — knowing it was lost and would never show up.

I’d stayed in Moscow for one simple reason: I was going to make my clients’ money back no matter what it took.

In theory, the post-crash economic conditions should have made that easy. The fund held big positions in most of Russia’s oil and gas companies. These companies sold their oil in dollars but paid their costs in rubles. Their sales had not decreased, but their costs had gone down by 75 percent because of the currency crash. In simple terms, when a company’s costs go down, its profits go up. I estimated that the profits of companies in our portfolio would rise by anywhere from 100 to 700 percent because of the devaluation. All else remaining equal, this should have led to a spectacular recovery in the shares of these companies.

Except all else didn’t remain equal.

Prior to the crash, the oligarchs, who were the majority shareholders of these companies, had for the most part acted honestly toward minority shareholders. Why? Because they wanted to get what they viewed as «free money» from Wall Street. Back then, Western investment bankers told them, «We can raise lots of money for you, but if you want it, don’t scandalize your investors». So, they didn’t.

This arrangement worked before the crash, generally keeping the oligarchs in line. But after the crash, all the bankers who had anything to do with Russia were fired and those who weren’t put their hands on their hearts and swore to their bosses that they had never even heard of Russia. When the oligarchs called their bankers in 1999 looking for that «free money», nobody answered. Overnight, they’d become pariahs. Wall Street was closed for business for the Russian oligarchs.

With no more incentive to behave, and with all these profits piling up after the devaluation, there was no longer any incentive not to steal. Why share the profits with minority investors? What had they done to help? Nothing.

With the brakes off, the oligarchs embarked on an orgy of stealing. The tools they used were many and with no law enforcement to stop them, their imaginations ran wild. They engaged in asset stripping, dilutions, transfer pricing, and embezzlement, to name but a few of their tricks.

This was a huge problem that every business person in Russia was obsessed with, and because I’d developed a reputation after my fight with Sidanco, in early January 2000 I was invited by the American Chamber of Commerce in Moscow to give a presentation to the local business community about corporate-governance abuse. It seemed as though I was the only person in Moscow crazy enough to speak publicly about the misdeeds of the Russian oligarchs.

I decided to use the Yukos oil company as my case study. I could have picked any Russian company, but Yukos was attractive because it had had so many minority-shareholder scandals. I called my presentation «The Armed Forces of Corporate Governance Abuse» to describe the many ways that the oligarchs went about ripping off their minority shareholders. The «Army» was transfer pricing; the «Navy», asset stripping; and the «Marines», shareholder dilutions.

The presentation was scheduled for 8:00 on a snowy morning in January. As my alarm went off at 6:30, I could barely pull myself out of bed. The temperature outside was minus-twenty degrees Celsius, the streets were covered with a fresh coat of snow, and the sun had not yet risen. Because the Moscow stock exchange didn’t open until 11:00 a.m., I didn’t normally get to the office until 10:30. I simply wasn’t used to getting up so early. Besides, who would go to a presentation at 8:00 a.m. on a snowy morning in Moscow? I wouldn’t have gone myself except that I was the speaker.

Alexei picked me up at 7:45 and drove me the short distance to the American Chamber of Commerce. When I arrived, I was surprised to find the conference room completely full. I made my way in and mingled with the crowd of indistinguishable middle-aged men in gray suits. I couldn’t help but notice that in the midst of this sea of gray was a beautiful young woman in a red-and-orange dress, her hair pulled into a tight bun that rested on top of her head like a ballerina’s. All of a sudden I felt that I had gotten up at the crack of dawn for a good reason. As I made my way toward the front of the room, I gravitated toward her.

When I reached her, I stuck out my hand. «Hi, I’m Bill Browder».

Her grip was firm, her fingers a little cool. «I’m Elena Molokova», she said professionally.

«What brings you here at such an early hour?»

«I’m interested in the Russian investment climate».

I handed her my business card. She reluctantly opened her purse and handed me hers. I looked down and saw that she worked for a US public relations firm that advised Mikhail Khodorkovsky, none other than the CEO of Yukos. It now made sense. I was about to rake her company’s biggest client over the coals and they had sent someone to assess the damage.

«You’re interested in the investment climate?» I asked, the tone of my voice perhaps betraying a bit too much surprise.

«Of course we are, Mr. Browder», she answered with a straight face.

«In that case, I’m glad you came».

I walked away with a strange feeling, as if she were pulling me back to her ever so slightly. I couldn’t be sure, but there seemed to be a spark between us, and even though it was way too early in the morning, I felt newly motivated to do a good job with my speech. I went through the presentation with a lot more flair and drama than I would normally have, and it was well received. Elena, however, appeared unmoved. I glanced at her far more often than I should have while speaking, and her expression never changed: professional and unsmiling. I wanted to talk to her again when I was finished, but I was accosted by several men in the room, who acted as a barrier to Elena. I watched her colorful dress from the corner of my eye as she slid out of the door and out of my life.

But I still had her card.

It practically burned a hole in my wallet. I wanted to call her as soon as I got back to the office, but had the good sense to wait an hour. I felt a bit like a high school kid strategizing the best way to ask out a girl without appearing to be too desperate.

Her phone must have rung seven times before she picked up. She didn’t sound nearly as eager to hear from me as I was to talk to her, but I still succeeded in inviting her to lunch, even if her tone of voice made it clear that she considered it to be a business meal and nothing more. What the hell, I had to start somewhere. At least my foot was in the door.

Our lunch took place a week later at a Swedish restaurant called Scandinavia, just behind Tverskaya Street near Pushkin Square. The meeting was slightly uncomfortable because neither of us knew what the other person’s agenda was. I supposed she expected me to talk to her about Russian business, Yukos, and corporate governance, and she was clearly confused when I started asking more personal questions, all of which she artfully declined to answer. By the middle of the meal we both understood that we were operating on different wavelengths, but even so, my persistence began to pay off. She didn’t open up entirely, but by the time the bill came I’d learned that Elena was not merely beautiful but incredibly smart. She’d graduated at the top of her class at Moscow State University (the Russian equivalent of Harvard) and had a pair of PhDs, one in economics and the other in political science. That she was working for the enemy made her fiercely attractive to me, even more than she had been when I first laid eyes on her.

One way or another I had to find a way to get her.

If she’d been any other Russian woman, this would not have been a tough get. In Moscow, Western men, and especially those with money, were the male equivalents of supermodels. Russian girls would throw themselves at you — and into your bed — almost upon meeting. There was no sport to it at all, no chase, no courting. Just «Hi», and the next thing you knew, some slender vixen with perfect lips and mysterious eyes was wrapping herself around you as your mind calculated where the nearest bed — or private room of any kind — was.

Elena was different. She was like a professional woman you might meet in London, Paris, or New York. She didn’t need a man for money, and certainly not to make her feel better about herself. Winning her would not be so easy. I wasn’t discouraged, though. Soon after our lunch date I called and asked her out again, this time to dinner. I must have been doing something right. Although she didn’t jump at the chance, she did agree.

We went to a Chinese restaurant called Mao and she was even more aloof than she had been before. She knew I had ulterior motives and she was being cautious. As we walked through the restaurant to our table and took our seats, she seemed disinterested.

Which naturally made me want her that much more.

We made small talk for a while, and then I asked, «Have you seen the article in Foreign Affairs by Lee Wolosky? About how America should treat the oligarchs like pariahs?»

Elena wrinkled her nose in a subtle gesture of disapproval. «No, I haven’t».

«It’s very interesting». I took a sip of red wine. «The writer suggests that the US government should take away the oligarchs’ visas so they can’t go to America».

Elena had flawless porcelain-white skin and a long, regal neck, and as I spoke, little red blotches began to break out across her skin. «Why would the Americans single out Russians like that? There are plenty of bad people all over the world. It would be hypocritical», she declared, as if I’d insulted her.

«No, it wouldn’t. The oligarchs are monsters and you have to start somewhere», I countered matter-of-factly.

I’d struck a nerve, and the tone of our dinner changed. Why had I brought up this Foreign Affairs article? I wanted to gain Elena’s trust and affection, not upset her. I dropped it and tried to change the subject, but the damage was done. We parted that evening with a perfunctory double-cheek kiss. It didn’t matter how much I liked her, I’d taken an unwarranted swipe at her homeland. As I walked away that night, I felt sure that I would never see her again.

For the rest of the night I couldn’t stop chiding myself for screwing up the date, nor could I shake the idea that my feeble attempt at romance was a reflection of my other troubles. The fund was still struggling, the Russian economy was on its knees, and it looked as if the oligarchs were about to steal every last penny left in the fund. I was screaming into the wind, not only with my work but with this unattainable woman as well. I climbed into bed racked by anxious energy. After about an hour of tossing and turning I picked up the phone and dialed my friend Alan Cullison from the Wall Street Journal. It was around midnight but that didn’t matter. Alan was always up late and I could count on him to talk. I told him about my unsuccessful date and he played along, offering me the usual condolences. Then, about midway through my story, I mentioned Elena by name.

«Wait — you got a date with Elena Molokova?» Alan interrupted.

«Two dates, actually».

«Shit, Bill, that’s an accomplishment in itself. Lots of people are after her».

«Yeah, well, I guess they’ll get her. I blew it».

«Eh, who cares… There’s a million good-looking girls in Moscow».

I shrugged and said quietly, «Yes, but not like this one».

Alan didn’t have much sympathy for me, and after a while longer we hung up. I eventually fell asleep and woke the next morning determined to go about my life. I would simply try to forget about Elena. I was a busy guy who had a lot of work to do, and there were other women out there, if that’s what I wanted…

Only that wasn’t what I wanted. Try as I might, I could not forget Elena, and a week after our dinner at Mao I decided that I had to do something to salvage the situation.

But what? How could I reach out without seeming desperate or pathetic? All I could remember, other than her disappointment in my beliefs regarding the oligarchs, was the story of how Elena’s father died. It had happened three years earlier when he’d suffered a sudden and unexpected heart attack. His death caught her completely off guard, and I remembered her saying that the worst thing about it was that she never got to say good-bye. Too many things were left unsaid.

The story of her father’s death reminded me of a book I’d recently read called Tuesdays with Morrie. I wrote a short note to Elena and stuck it in the front cover of my copy. I wrapped it up and had Alexei deliver it to her office. The note read:

Frankly, this was a long shot, even though the book truly did have a great effect on me. It was simple, direct, and incredibly moving. But as I sent it to her, I was afraid she would see it as something different, like a small Trojan horse I was using to try to infiltrate her heart.

Another week passed with no word and I was sure that I’d missed the mark entirely. But then a week later, Svetlana leaned across her desk and said, «Bill — there’s a phone call from Elena Molokova».

My heart jumped and I took the call. «Hello?»

«Hello, Bill».

«Hi, Elena. Did you… did you get the book I sent?»

«I did».

«And did you have a chance to read it?»

«I did». Her voice was softer than it had been before. I couldn’t be sure, but it sounded as if a layer of toughness had been peeled back.

«And did you like it?»

She sighed. «I liked it a lot, Bill. I just finished it. Just now. It really spoke to me. Thank you».

«I’m glad. I mean, you’re welcome».

«It was surprising too». Her tone changed ever so slightly, wandering into a personal space where she hadn’t yet led me.

«Oh? How’s that?»

«Well, I didn’t take you for such a sensitive man, Bill. Not at all». I could hear her smile through the phone.

«I’m not sure I am very sensitive, to be truthful». There was a pause. «Tell me, would you… would you like to have dinner again?»

«Yes, I would. I would like that very much».

A couple nights later I met Elena at Mario’s, an expensive Italian restaurant frequented by the Russian Mafia, but which also featured Moscow’s best Italian food. I arrived first and took a seat at the bar, and when the maître d’ brought Elena over, I had to look twice. She was transformed. Her flaxen hair was no longer tied in a bun but rested softly on her shoulders. Her lipstick was redder than before, and her black dress was simultaneously tighter and classier than anything I’d seen her in before. She wasn’t just beautiful. She was sexy. It was clear that for her, this was really our first date.

We sat and had dinner. We didn’t talk about Russian oligarchs or corporate governance or business practices; we just talked about our families and our lives and our aspirations — what everyone talks about when they’re getting to know someone. It was great. Before we said good-bye that night, I grabbed her around the waist and pulled her toward me, and without any resistance we shared our first real kiss.

After that we spoke every day, and I would have been happy to see her every day too, but she had time to see me only once a week or even once every two weeks. We carried on like this for three months — nice dinners, nicer conversation, a real kiss before going our separate ways. I wanted more and it seemed that she did too, but I couldn’t figure out how to get past her defenses. So I decided that I had to do something rash and romantic.

The May holidays — a big deal in Russia, when everything shuts down for ten days — were fast approaching. One afternoon I called her. «How would you like to go to Paris with me for the holiday?»

She hesitated. I surely wasn’t the first man to ask if I could whisk her away for an impromptu getaway, and we both knew what would happen if she said yes. After a few seconds she said, «Let me think about it, Bill».

Ten minutes later she called back. «I’d love to come with you if I can get a visa». A warm feeling welled in my chest and stomach as I heard I’d love to, but it was quickly tempered by the words if I can get a visa. Getting West European visas for Russian girls under the age of thirty was no small feat. It usually required a few weeks and a mountain of documentation to show that the applicant had no intention of staying in the West. Making it worse, we had only four days before the start of the holidays to sort it out.

Elena called some travel agents. Luckily, one was organizing a group tour to Paris and was on her way to the French embassy that afternoon with thirty passports for visas. If Elena could deliver the paperwork in time, she had a shot at getting her visa quickly. She put everything together and, amazingly, her application was approved the next day. Less than a week after I’d asked her, we were sitting next to each other on an Air France flight bound for Paris.

In an attempt to impress Elena, I booked a suite at the Hôtel Le Bristol, one of the nicest and most lavish hotels in France, if not the world. A pair of white-gloved bellhops took our two small bags and escorted us to our room. I walked behind Elena down the blue-carpeted halls decorated with Louis XV armchairs and wall sconces, peeking over her shoulder to gauge her response. She had a slight smile on her face, but she always seemed to have a slight smile on her face, no matter what her mood. We reached our room. The first bellhop opened the door, and we walked into one of the most impressive hotel rooms I’d ever been in, and by then I’d been in quite a few. I tipped the bellhops and uttered my thanks in my regrettable French and turned to Elena.

She was not impressed, or if she was, the same slight smile masked it perfectly. «Let’s go out», she said.

We freshened up and made our way downstairs to Avenue Matignon. Paris is made for strolling, so we walked slowly, talking now and then about nothing in particular. We held hands at intervals, but never long enough to give me comfort that I’d finally won her over. The sky grew more ominous as we walked, and as we turned onto the Champs-Élysées, the clouds overhead were heavy and looked ready to let loose. «I can smell the rain coming», Elena said.

«Me too».

We picked a café that had umbrellas over its outdoor tables and sat. The waiter brought warm bread and I ordered a bottle of Bordeaux. We had mussels in white wine and a big bowl of frites. The rain held off. I ordered a crème brûlée and a pot of English breakfast tea, and when the dessert arrived, fat raindrops began to pelt the sidewalk and the umbrellas in a staccato rhythm. The umbrella was not big, so I scooted my chair around the table and wrapped my arm around Elena’s waist in an attempt to keep her dry. We giggled like schoolkids as the sky opened up and the rain fell in a heavy spring downpour. I pulled Elena directly into my lap, and she wrapped her arms over mine and we squeezed each other.

At that moment I knew that she was all mine, and that I was all hers.