Oligarchs Bankroll Yeltsin Re-election Victory: 'Seven Bankers' Control 50-70% of Russia's Economy Through Loans-for-Shares Deal

Boris Yeltsin won re-election as President of Russia in a stunning comeback victory engineered and bankrolled by a coalition of seven oligarchs who became known as the ‘Semibankirshchina’ (seven-banker outfit). Despite approval ratings below 10% earlier in the year, Yeltsin defeated Communist challenger Gennady Zyuganov through a massive campaign funded by the oligarchs who had acquired Russia’s most valuable state assets through the 1995 loans-for-shares scheme. The seven oligarchs—Boris Berezovsky, Mikhail Khodorkovsky, Vladimir Gusinsky, Vladimir Potanin, Mikhail Fridman, Pyotr Aven, and Alexander Smolensky—coordinated to ensure Yeltsin’s victory as their quid pro quo for receiving the privatized assets. They donated millions of dollars to the campaign, hired top political operatives, laundered government money through their banks into the Yeltsin campaign machine, and controlled two of Russia’s three major television networks (Berezovsky and Gusinsky), which blanketed airwaves with pro-Yeltsin propaganda while vilifying the Communist opposition. In an October 29, 1996 Financial Times interview, Berezovsky bragged that these seven bankers and businessmen from six businesses controlled about 50% of Russia’s economy and most of its mass media. Together they controlled from 50% to 70% of all Russian finances between 1996 and 2000. The oligarchs’ successful re-election campaign cemented their political power and economic dominance, creating a symbiotic relationship where Yeltsin protected their wealth and they financed his political survival. This concentration of economic and political power represented the full emergence of Russia’s oligarchic system, where a tiny group of well-connected businessmen wielded influence vastly disproportionate to their numbers. The arrangement would continue until Vladimir Putin’s rise to power in 2000, when he would force the oligarchs to choose between exile, imprisonment, or complete political submission.