We finally had the meeting with Vladimir Putin that the U.S. (Deputy to the Mayor Torrance arranged his speaking trips to the United States.) We struggled up from the bottom of the bureaucratic ladder trying to get an audience with Mayor Sobchak, who was often out of town. Petersburg rather than to build dachas for bureaucrats at their benighted Commission.Įither no one believed we really had the money, or the prospect of getting Chernomyrdin to sign ad hoc legislation was dim. We said we preferred to donate funds for legitimate needs in St. Gingerly, my American lawyer colleague and I proposed asking Mayor Sobchak to intercede with President Yeltsin. We met one day with Richard Torrance, a New York City public relations official working for Sobchak as Deputy to the Mayor. Half of our projected $9 million would have been insufficient capital for sustained operations, so we kept floundering. State Department and Department of Agriculture said to give the Commission half the money (as similar companies had done). Consulate commiserated, but seemed not interested in helping a company constituted as a Russian for-profit company, even though we were as nonprofit in our format and operation as the NGOs (Non-Government Organizations) that they regularly worked with. Our initial steps to avoid confiscation were very disappointing. That was the Putin-Humes deal worked out in the months following our appearance before the Russian Humanitarian Aid Commission. Petersburg Dental Clinic #1 had $1.5 million worth of new American-manufactured Siemens dental equipment. Prime Minister Chernomyrdin had signed a bill exempting us from the confiscation provision. Thirteen months later Vladimir Putin, Mayor Sobchak, and I were toasting each other at the Mayor’s favorite St. I asked one more question: “Is there any other way we can escape confiscation?” The chairman laughed at my naivete and chortled in Russian: “Get Boris Yeltsin to write a law exempting you!” At the end of two hours of our stubborn attempts to appeal to them, we were completely discouraged. These men happily informed us that if we invested $1 without their approval our entire deposits would be forfeited under a relatively new law. Several very grumpy, self-righteous, old men laughed at the idea that investing in small companies was any remote type of “humanitarian aid.” We referred them to Russian versions of the Department of Agriculture’s agreements with the Russian government, which stipulated our use of our proceeds without taxation (or confiscation). The meeting was so disastrous that we believed our project might be terminated by their actions. Immediately, my Washington colleague and I flew to Moscow to meet members of the Commission. Within six weeks of my arrival, after depositing our first $2.1 million butter proceeds in a Russian bank, we were notified that something called the Russian Humanitarian Aid Commission in Moscow believed we were about to violate the law. However, Russia has had no provision for nonprofit corporations (the whole concept is confusing to them) so that we were constituted as a regular Russian corporation. We were to operate as a nonprofit, reinvesting any proceeds into new investments. Petersburg, sell the butter on the commodity exchange, and invest the proceeds (to be about $9 million) in non-control positions in small Russian businesses. Our charter was to accept shipments of frozen butter in St. butter into assistance, initially to Poland, Russia, and Bulgaria. Petersburg, which was wholly owned by CARESBAC, Washington, D.C., an independent nonprofit that had been formed by CARE employees to turn gifts of excess frozen U.S. In June 1993, I was appointed General Director (and founder) of CARESBAC-St. Because of his keen interest in attracting business investment to his native city, and his formidable political skills, our nonprofit company was one of the first in northwest Russia to invest in small Russian businesses. Without his help my American-owned company would probably have disbanded. Petersburg’s First Deputy Mayor Vladimir Vladimirovich Putin was a powerful figure in Mayor Sobchak’s liberal administration, often regarded as acting mayor.
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