Aven, who said his Alfa Bank was not a beneficiary of the loans-for-shares deal, now criticizes the arrangement, saying its unfairness has opened the door for a backlash in which private holdings could be renationalized. "To start the process of renationalization would be very, very dangerous because then there would be a question where to stop," he said.
After selling many of its prime assets at low prices, the government was increasingly strapped for cash. It began selling short-term treasury bonds, known as GKOs, at interest rates up to 200%. Investing in these bonds was far more profitable than putting money into factories or farming, and the banks poured hundreds of millions of dollars into GKOs.
In Moscow, Russia's economy seemed to be booming. Stocks soared. The magnates built glittering new office buildings, flew in private jets--and began fighting among themselves over who would receive the remaining prizes.
Last spring, Berezovsky helped engineer the ouster of Prime Minster Chernomyrdin, which proved to be a costly mistake. Yeltsin named as premier the inexperienced Sergei V. Kiriyenko, who paid less attention to the oligarchs' wishes than had his predecessor.
By mid-August, it was clear that the government had run out of money. Kiriyenko was about to allow devaluation of the ruble and freeze payments on GKOs. At the urging of some tycoons, he cushioned the blow by imposing a 90-day moratorium on the repayment of banks' foreign debts. That angered foreign creditors, helped destroy faith in the banking system, and contributed to the ruble's plunge and Kiriyenko's eventual replacement by Prime Minister Yevgeny M. Primakov.
"The decision that was announced by Kiriyenko at their suggestion--well, the bottom line is that they did not foresee how events would develop, and the crisis hit the oligarchs themselves," said Luzhkov, the Moscow mayor.
"I do not think the so-called oligarchs will return and again run things in society, decide on whom to appoint in government," Luzhkov said. "My dream is that Russia should understand that it has survived Gaidar, Chubais and the oligarchs and that it should not go back to all that. The oligarchs should not be succeeded by some [other] tycoons."
But it may be too early to count the oligarchs out. They still control some of Russia's biggest enterprises and will try to hold on to them--with or without the insider deals that helped make them rich.
New Government May Beget Its Own Tycoons
Some predict that the change in government means only that new oligarchs will rise to join the survivors of the crash, broadening the base of economic power but leaving the system of oligarchy intact.
"Some of them may go, but new people will come to take their place in shaping the new liberal and democratic Russia," Berezovsky said. "A country as great as Russia can't live without such people, without big capital. . . . They will never disappear."
Aven, for one, said his company can succeed in a system in which financiers have less influence over the government. Despite losing $100 million on GKOs, he said, Alfa does not need special favors from the government.
"We never pretended to rule the country," Aven said. "Especially now, nobody wants us to rule the country. I think that's what the country needs. First of all, the government has to be independent."