December 30, 1994
Friday
9:00 p.m.
The party at the Terem had reached its peak. The guys were scattered across the restaurant: they’d taken over the billiards room and the fireplace lounge, staked out spots at the bar next to a few hard-currency strangers.
Zhorik swept his eyes over the room and headed for the restroom. Halfway there, he let out a yell:
«You old goat! What are you doing here?! How?!»
He made a beeline for a table where a polished-looking European sat with one of our local ladies. The foreigner recognized Zhora. Got up, hugged him, kissed him, the two of them trading questions, answers, clarifications...
Zhora dragged the European over to our table and sat him down across from me. An imposing man in his fifties, he looked like a cross between the actors Shirvindt and Derzhavin. His aristocratic manner marked him as a bird of high flight from abroad.
«Roma, meet an old friend, Mr. Kalkin. Or is it Herr Kalkin?»
The foreigner smiled and, in flawless Russian with a slight burr, said:
«More like Heer. I’ve got a house in Rotterdam. Hold on a second, I’ll be right back.»
Kalkin went over to his companion and whispered a couple of words into her ear. The lady’s eyes flashed and she moved over to the bar. Kalkin came back:
«Sent the pacifier off. We parted on good terms, no reason to mope.»
«We’ll meet again another day, in a joyful, jesting way,» Zhorik rhymed. «So what have you been up to?»
«Small-scale wholesale. Took in a pensioner, a former deputy minister. He’s on the books as a consultant. I drive around the regions, place orders. The pensioner knows every director there is. You know how it goes, the plants are struggling.»
«Hm, interesting, I’ve got an idea about maybe working together. We’ve got money to burn, but no system. No clue where to put it,» Zhora rattled off, exhaled to the side, and threw back a shot of vodka. He froze for a couple of seconds, letting the alcohol settle through his insides, and finally concluded:
«Went down smooth.»
Kalkin, waiting out the gulp from Zhora’s depths, smirked:
«You don’t need to invest anything. Only optimists and fools invest in this country... usually both at once.»
«Didn’t catch that,» Zhorik bristled, a man never previously known for patriotism, but suddenly playing the part of Pushkin, who despised his Fatherland from head to toe.
«Taxes and shakedowns will wear you down,» the foreigner said, flaunting his Russian. «My scheme’s simple: I lend the plant money, to be repaid by processing raw materials. It’s such a tangle in there, nobody can figure out who’s making what margin where.»
Zhora’s hackles went up. Kalkin continued:
«I’m handing off the scheme, it’s not relevant to me anymore. My guy at the Ministry of Foreign Economic Relations cashed in his dream and split, so now there’s nobody left to grease. Here’s how it works. You buy raw materials in Russia and process them at a captive plant, against the loan you already issued. Then you ship it to Riga, load it onto a barge, and send it off to Europe. That’s how it works in real life. But for the tax inspectors, you draw up a Kazakh firm that bought up your raw materials. You draw up a Kyrgyz firm the Kazakhs send the raw materials to for processing. You draw up an Armenian firm the Kyrgyz hand the processed product over to for sale. And as the final flourish, you draw up a Belarusian firm that buys up the whole mess from the Armenians and ships it to the Latvians. And you already know the rest: what’s there to squeeze out of a Latvian? Nothing but a shrug and a prayer. If you set the scheme up right and grease the right wheels for tax breaks, your tax rate comes out to minus forty percent — meaning the state ends up owing you. But I never got greedy, I worked it at break-even. Now I’m just tying up loose ends.»
