Offshore Islands by John Francis Kinsella - HTML preview

he factory lay in an inner suburb of St Petersburg on a modern industrial zone where most construction had been long been abandoned.

Once they passed through the doors of the modern looking factory it was as though they had been transported a few hundred kilometres to the north-east. It was Finnish organisation and technical perfection down to the least detail.

They were met by the factory manager, Marti Raitakari, a quiet but likable Finn, with long experience in the woodworking and furniture industry. He described the difficulties of working in Russia. The problem was not the staff, who were competent and hard working given the training and the incentives, good jobs were few and far between. The main problem was the authorities who were disorganised and corrupt. Then there was the unreliable transport system and the power company. It took hefty bribes to get anything moving and protection money to stay in business.

Marti invited them to his new apartment for a before dinner drink and meet his friends. They followed his Mercedes back into the city. They stopped at the lights and the tramcars slide by with a metallic whirr. The driver of the Mercedes started and then turned left bumping over the rails. The traffic almost resembled that of a Western capital, perhaps somewhat more fluid for six forty five in the evening.

His apartment on the fourth floor was impeccably renovated with high original ceilings. It overlooked the ice covered Moika River where the embankment curved opposite Peter the Great’s Stable built in 1720, nearby the church where Alexander II was murdered in 1881.

Marti was a collector of fine art and enjoyed classical music. The walls of his apartment were covered with paintings new and old that he had collected in Russia. His wife lived in Finland whilst he led a bachelor’s life in St Petersburg, returning to Helsinki for business or weekends.

He warned Arrowsmith of the danger of becoming involved with the Russian Mafiya. They did not hesitate to use violence openly, the previous manager of the furniture plant had been shot down whilst taking a coffee with a business friend in the arcade of the Nevsky Palace Hotel. He and a bystander, a British businessman, an innocent hotel guest, had been killed and two other persons injured. He had not come up with a payment for protection having complained to the local police. After a year’s investigation the police had not made the least progress in finding the killers.

 

73. Chapter 71. Riga

The Bottens Handelsbank was very active like many Swedish banks in the newly independent Baltic states. It was only ten years or so since those countries had the unexpected good fortune to throw off the Soviet yoke.

The Bottens had set up a branch in Riga, which was engaged in the financing bilateral trade with Sweden and also worked on a number of projects financed by the Berd in London. Holmqvist had curiously accumulated the roles of being the local head of the Bottens and at the same time the representative of the Berd.

Through a complex arrangement, the Berd was to finance indirectly part of the Ciscap project, through a barter arrangement whereby Latvia supplied Russian oil and fertiliser against Cuban sugar. Ventspils, the main shipping port of Latvia had been in the very recent past a major port for the Soviet Union to the Baltic and Western Europe, it continued to be so as the port was connected by pipeline and railways to the Russia networks, bringing bulk products to western markets.

Mika had set the deal up and as middleman would collect a solid commission. The essential however was that Arrowsmith fulfil his engagement with Carlos Gonzales Montero of Sierra Maestra, to help him export his sugar crop and import the fertilisers for his sugar cane plantations. Cuba needed ten million tons of oil a year, therefore the bartered oil would be sold to the state refineries. The old communist system ‘sugar for oil’, with Cuban sugar vastly overpriced, no longer functioned, it was everyone for himself.

The modernisation of the port of Ventspils as well as the investment for the environmental rehabilitation of the port zone after fifty years of soviet pollution was being financed by the Berd as part of their on-going programme in the country.

“You’re friend Kennedy has been up to some monkey business!”

“So you told me,” replied Arrowsmith referring to Mika’s call a couple of weeks earlier.

“Ortega wants the sugar deal.”

“Ortega?”

“Yeah, he has some old friends in the Ministry of Sugar in Havana, he has promised them the deal with a share of the commissions.”

“But what does Kennedy have to do with it?”

“It’s not really clear, but it seems that Ortega has been showing him around his hotel investments in Mexico, treating him like visiting royalty.”

Mika recounted the information that he had obtained from a friend in the Russian Ministry of the Interior concerning Ortega. He had undisputed links with the Latino and Russian Mafiya in money laundering.

He described the explosion of drug addiction in Russia and the how huge sums of money derived from drug trafficking were moved in and out of the country. How heroin, imported from Afghanistan and Tajikistan by the Mafiya, had spread to every corner of the country and how cocaine was becoming the fashionable drug amongst the nouveau riche in Moscow and St Petersburg.

He went on to explain how Ortega laundered money from deals with Russian producers of oil and fertilisers, vast quantities of these commodities were exported, though only part of the payments ever returned to Russia, the lions share going to some offshore tax haven and recycled into other businesses.

“What’s the market price of sugar today?” Mika asked as they turned to the triangular arrangement of oil, sugar and fertilisers.

“Let’s see sugar is around six cents a pound on the Sugarworld NCSE.”

“So half a million tonnes is sixty million dollars. Half a million tons of oil or three million barrels is roughly the same, that’s a combined barter deal of 120 million dollars with say ten percent for Ortega, not bad ten or twelve million dollars.”

“Yeah, anybody who could do that once or twice a year wouldn’t have a retirement problem.”

“That’s nothing for him, just the tip of the iceberg, because he works for the big Russian oil and fertiliser companies trading in millions of tonnes of products and siphoning of huge amounts of money to the offshore bank accounts for the Russians.”

“So, I suppose he doesn’t want anybody muscling in on his territory.”

“Right!”

“I still can’t see why he’s so interested in Kennedy?”

“Respectable investments, laundering money stolen from the Russian people, laundering Colombian drug money! He’s using Kennedy to transform illegal money into legal investments, such as Ciscap or through some other some nice innocent Irish industries!” he said laughing at the thought.

 

iga airport looked like any other Baltic city airport in winter, a line of three snow ploughs abreast moved slowly along the runway. The difference to the experienced traveller was the Russian built Tupelov’s of Aeroflot transformed into Lidosta Riga, the national airline, and a bunch of about fifteen Antonov’s lined up at one end of the tarmac.

Arrowsmith passed through the passport control without any problem, but Boisnier, who had no dollars - only French Francs, was diverted to a visa bureau in the corner of the small cold airport.

Holmqvist wore a slouched Fedora and a long black belted coat. Arrowsmith thought that the Swede was playing out the role of a reborn Baltic Baron.

The road into the city was monotonous; the only distraction was the backbreaking bumps as the car hit the deep potholes in the road or swerved to avoid them. It had started to snow and through the windscreen the swirling white flurries had a soporific effect.

The building housed both the Riga Bottens representative office and that of the Berd. It was in an elegant ornate pre-war building. The stairs were in marble, covered with a purple carpet, on each landing highly polished double doors with carved architraves in dark wood led into the office areas. The reception area was decorated in glass and marble. It was typical of a bank, inspiring confidence and continuity.

Holmqvist was a Swede; he was head of the investment section at the Bottens. His job was to assess businesses and industries for investment; he boasted that in three years he had visited more than ninety potential companies in the three Baltic States.

As far as Koskinen was concerned he was a fagot and Arrowsmith agreed he was un vieux pedal with his fedora, camping his vision of long gone Baltic nobility.

“Our job is to get his money to set-up the barter deal,” said Koskinen his jaw firm with determination, “then we can seriously think about big tits.”

Kutzmenkov was somewhere behind, he had eaten at least the equivalent of the other three at lunch, and several strong dark beers. Arrowsmith had expressed his serious concern that Kutzmenkov would explode splattering them with a mixture of shit and dark beer.

“Let us be serious for a moment,” replied Koskinen. “We need their money.”

“Good morning,” said Arrowsmith, putting on one of his charming smiles for the receptionist, a blond who was evidently bored sitting in front of her word processor all day. At first she put on a severe smile and then relaxed, he was evidently not a serious customer. She called Holmqvist on the phone and a few seconds later he was there - without the fedora.

“Ah, good morning, welcome to the Berd as they say in French or should I pronounce that bird?” as he preferred to refer to the European Bank for Reconstruction and Development that had been set up to aid the reconstruction of Eastern Europe and the ex-Soviet Union.

They laughed and followed him into the meeting room, which was obviously designed for the formal signing of agreements and large loans, which had unfortunately not been forthcoming contrary to the plans of the bank’s first president, the extravagant Frenchman, Jacques Attali or his successors for that matter, business in the East was much more complicated than had been at first thought by the bank’s creators.

“Look Tony I think you should come back to Moscow with me to look into the Ortega thing otherwise we’re going to have some problems.”

“I didn’t plan on that Mika.”

“Neither did I, but I don’t want to waste my time on this if that bastard is going to steal it from under my nose. I also need a retirement plan!”

 

74. Chapter 72. Yaroslav

They hurtled down the brown tracks traced in the thick snow on the M8 from Moscow to Yaroslav, passing the row of snow ploughs ranged across the highway and convoys of heavy grim trucks. Some would have said that it was an improvement on earlier times, Arrowsmith was not so sure huddled on the back seat as the car slide around one of the hulking ploughs, he would have preferred the comfort of his room back at the Palace.

“Are we safe at this speed?” Arrowsmith asked, “I mean the tyres...road holding!”

“Da.”

“Are you sure?” Arrowsmith asked after a moment of silence.

“Niet,” Koskinen smiled shrugging his shoulders.

Arrowsmith let out a nervous laugh. There was nothing else to do but sit back and leave things to Sacha, their driver, and to fate.

The day had started badly with the minibus breaking down only three or four kilometres from the hotel in the heavy morning Moscow traffic. By the greatest of chance they were just five hundred meters from Koskinen’s apartment and after a hopeless effort on the starter they abandoned the minibus, making their way to the apartment on foot, leaving the driver to make arrangements for another vehicle.

They were heading for Azotphos, a huge fertiliser complex. During the Soviet period that type of factory was known as a ‘combinat’. It currently employed seven thousand people, less than half of that in the eighties. It produced nitrogen and phosphate fertilisers, almost two million tons a year.

It had been privatised in 1993; share certificates had been distributed to the combinat workers, one of the first real transfers of ownership from the state to the people in the history of Russia. They were non-negotiable, there was no market for such shares, thus there were in a sense worthless. When the top management offered to buy them for cash, the workers eagerly sold them for a few soon to be worthless roubles. The result was a handful of individuals in the top management had gained total control of the combinat and in doing so became rich while the workers became poorer than ever.

In the past the fertilisers had been distributed according to an annual plan decreed by the Ministry of Planning, without need of a sales or marketing organisation by the combinat, as a consequence, in the post-Soviet economy, the management was forced to learn the rules of market economy from zero; setting prices, seeking customers and making profits. A difficult task under the best of circumstances for a bunch of inexperienced ex-communists, not to mind a country going to hell on a roller-coaster

However, they did learn and they learnt quickly, setting up a Swiss company, which they nominated as their official agent and who collected the customer’s payments for goods delivered to export markets. Setting prices was easy - check international prices in the American Weekly Chemical News, deduct ten percent - that was the selling price, whatever the real costs.

Profits making was even easier; all the monies from foreign sales were diverted into offshore accounts, as a result the newly privatised combinat ran with a catastrophic deficit at the state bank, which became insignificant with the successive devaluations of the rouble. Their profits were not simply profits, but one hundred percent profits, all salted away in offshore bank accounts far away from predatory politicians and the risk of holding reserves in almost worthless roubles, the value of which fell vertiginously every day. It was fabulous, over two hundred million solid American dollars a year directly into the bank accounts of the new capitalists.

Mika wanted them to supply the fertilisers for Cuba. It was not easy; they sold all they produced, whether the quality was good or bad. The only requirement was payment against documents along side ship in Ventspils, with a down payment of twenty percent deposited and confirmed in their account in Switzerland.

Mika had good friends at Azotphos; they were willing to trust him at his word. He simply wanted to know whether Ortega had approached them and what he had asked for.

They were not the only sellers, there were several ex-combinats of the same style capable of fulfilling the order, but in any case his friends at Azotphos would know who was in the market for one hundred thousand tons of fertiliser at around 350 dollars a ton, and who could deliver the fertiliser on schedule. Thirty five million dollars was a good contract, with financing backed by the Berd and the Swedish bank.

In the distance a figure waved them down at what appeared to be a police checkpoint. Antonov stopped and then stepped out of the car, he followed a pink-cheeked police officer to a cabin on the side of the road, Koskinen followed him. After a few moments Arrowsmith decided to join them to stretch his legs, it took less than a couple of seconds to abandon the idea, the bitter cold wind bit into his pampered western body and he quickly scrambled back into the warmth of the car.

“What’s the problem?” he asked Koskinen when he returned with the Sacha.

“They are just checking on the computer to see if the car is not stolen.”

The motorway gave way to a normal two lane road, there were few trucks and even fewer cars, the snow covered road became almost white and the car shook and vibrated as it continued at an unrelenting pace over the hard compacted uneven snow.

They stopped in a small tree lined town, it was dominated by an Orthodox church with four green onion shaped domes and a bell tower. Timeless Russian houses stood on each side of the road, most were built in wood though some were in brick or stucco faced, brightly painted in red, green and yellow pastel shades, their snow covered gardens were surrounded by low uneven wooden fences. Elegant low buildings that had probably not changed since Czarist times, lined the streets in the town centre.

Just before leaving the town Koskinen pointed to a small oddly modern style building with an aluminium facade, Arrowsmith could decipher on the writing the sign in Cyrillic, it said Magasin. Inside the small supermarket a row of babushkas seated side by side shouted in unison to Arrowsmith to close entrance door he had left open to the wind and the whirling powdery snow. The shelves were empty and the accumulated grim and dust told him that they had not sold out their stock recently, at the back Arrowsmith saw a shelf lined with Vodka bottles – all empty!

Mika bought a kilo of biscuits, they returned to the car to eat their lunch, Finlandia vodka and sweet biscuits from the ‘Magasin’.

A few kilometres further from the village they stopped and urinated in the snowdrift on the side of the road, laughing as Arrowsmith told Sacha his eyes resembled the ‘piss holes in the snow’ after his drinking session the previous evening.

The swirls of fine powdered snow rose from the surface of the wide and almost empty road. The skyline was punctuated by the pylons of the electricity grid and the orange flames that rose from tall metal chimneys in a nearby refinery.

 

hodge-podge of worn out chairs lined the waiting room, the wall partitions were in cheap bare planks of unvarnished wood as was the floor, if there had been a varnish it had long disappeared. Koskinen, with a stream of lecherous comments, observed the coming and going of female staff from an adjoining room, as Arrowsmith looked at a sad sack of potatoes standing in the corner of the waiting room through the vague blurry haze from the vodka and whisky that Koskinen had pressed on him in the car that he now regretted.

Mikalov was not in his office and his secretary with a disdainful gesture relegated Koskinen and the others to an anti-chamber. Antonov in his style of ex-KGB officer turned in circles in the narrow corridor.

Mikalov arrived agitated but smiling, he was a bundle of energy in a sea of despair.

“My friends how are you, I am so sorry to keep you waiting, we are overloaded with work.”

After a long discussion on the state of the Russian economy he invited them to lunch. The dinning room was set up for feast, an extraordinary display of food and drink. The dinner service sparkled under crystal chandeliers and the wine glasses were pure kitsch, decorated with an extravagant excess of gilt.

After the formalities they settled down to the subject of their visit. Azotphos had received a demand from Ortega’s organisation. Their enquiry had been declined, not directly, but by a dissuasively high price and long delivery date.

“We have had difficulty with your friend,” he said alluding to Ortega, “he is unreliable, as are his banks.”

“I see,” said Koskinen introspectively.

“We are open to dealing with you, hopefully through the Swedish bank, that is not an obligation but it would help with the delivery.”

Koskinen understood it was an unavoidable condition.

“But don’t forget Ortega has powerful friends.” Mikalov added as a warning.

 

he local hotel must have been at one time modern, its large entrance hall and sweeping stairway bore witness to that, but that was the past, it had been transformed into misery with its foul toilets and the pervading smell of powerful bleach polluted the hall reaching through into the vast bar.

“We have no beer.”

“No beer?”

“No.”

“Why not?”

A long discussion ensued in Russian. Then there was silence.

“What did they say?”

“Nothing.”

“Nothing.”

“Yes nothing, the manager does not order beer.”

There was a further silence.

“But many customers ask for beer.”

They were waiting for the over night train to St Petersburg. The hotel bar was the only half civilised place to wait after Mikalov had been obliged to leave them. Ordering beer or soft drinks was a hopeless situation and they resigned themselves to another bout of vodka.

The next morning they descended from the worse than drab Bolshevik style train in St Petersburg, Arrowsmith waited in the black slush whilst Koskinen searched for the driver. A line of women stood under the falling snow proffering bottles of hard to find vodka for sale. They arrived at the Europa, a hotel of renovated Czarist splendour, Arrowsmith headed for the marble toilets, where he defecated in the luxury of a sparkling clean and spacious cubicle, then washed and shaved. Koskinen and Kutzmenkov waited in the hall under the light of the sparkling chandeliers.

The vast art décor breakfast room was restored to past glory, the atmosphere was sedate as shy pretty girls in starched uniforms served the tables, they looked well brought up, it was an image from a far distant past. A pretty guitarist, elegantly attired in a black evening dress, played soft Spanish classics seated under the potted palms. Arrowsmith marvelled at the carved wood balconies, the stained glass roof and superb stained glass windows, which crowned the room, suggesting a extraordinary airy and luminous cathedral.

They sat at a round table set for at least eight people, laid out in impeccable style with fine silver and chinaware. Antonov loaded his plate from the buffet with enough food to feed half of St Petersburg’s hungry. Koskinen tried to flirt with one of the shy blond waitresses, quickly abandoning his gambit in favour of an attractive German girl he had spotted seated near the buffet.

Returning, some moments later, a lonely croissant on his plate, having accomplished his reconnaissance mission, he announced, “She has nice blue eyes,’ and after a pause added with a wicked smile, ‘and big tits’.

 

75. Chapter 73. Moscow

They drove in a Volga which had seen better days, taking the Sadovoye Koltso or Garden Ring, a very broad avenue that circled the centre of Moscow. The low sun shone directly in front of them, reflecting a leaden sheen from the worn surface of the road and the roofs of the cars.

They had arrived back the previous evening and Arrowsmith had decided to look deeper into Ortega’s manipulations, following their visit to Azotphos and check out any other reliable sources of information.

“This was a car of the high nomenclatura before,” Koskinen explained with a wistful smile, “today they have Mercedes.”

Arrowsmith was reminded of the comforts of the Western cars by a bone jerking series of bumps, at the same time the driver stamped on the brake projecting him forward.

The early spring had made a sudden appearance, it was warm, over twenty degrees; the buds on the trees were opening giving a thin aura of green. The road had some very impressive holes, the driver snaking skilfully between them and the tramlines, as did the other vehicles, resulting in a constant uncoordinated weaving motion of the traffic.

The driver was rather short and slightly built probably from one of the Central Asian republics; he wore Ray-Ban sunglasses and sported a sharp moustache. He had a tendency to speed and Arrowsmith was frequently forced to remark the fact to Koskinen out of an aching sense of self-preservation.

“What Russian doesn’t like speed,” said Koskinen interpreting the drivers comment with a wry smile.

“Dead ones!” replied Arrowsmith grimly, images of collisions with the never ending lines of silver birch that lined the roadside and twisted rusty Russian metal in his mind. The reality was probably not quite as bad as his fertile imagination told him. Red Ladas and SUV’s at considerably greater speeds recklessly overtook them at every opportunity.

 

rtega’s omnipresence had begun to create a worrisome source of concern, but there was another more immediate and personal matter to be attended to; Arrowsmith had promised Olga to contact her old grandmother and to help with some money if possible.

The temperature had reached an astonishing twenty-six degrees, it was dry and dusty, and Moscow suddenly seemed to be covered with a layer of dust, though no doubt the result of years of accumulation. He walked in a residential district behind the Kiev railway station, it was hopeless task to find the grandmother’s apartment block amongst the run down buildings, not speaking Russian and the Muscovites wariness of foreigners was of little help. Olga had told him that her grandmother was a fervent believer attending religious services every day a nearby church. Arrowsmith found the church without too much difficulty, its golden dome shone in the sun, a bright contrast to the grey surroundings, it was undergoing restoration. He was immediately shown to a pope, one of those directing the work, a certain Father Sverdelov.

Sverdelov was an Orthodox priest, a pope, trained at Sergi Posad the centre of the Russian Orthodox Church. As a functionary of the Church he was the eminence grise to an elderly but important bishop.

Fortunately for Arrowsmith, Sverdelov spoke good English and after listening with what appeared to be a sincere interest promised to assist Arrowsmith to find the old lady. It would take a few days and when Arrowsmith returned to Moscow from his trip to Ufa hopefully there would be some positive news. Arrowsmith had hinted that he would make a generous offering to the church in return for the help.

“Mr Arrowsmith, that is very kind of you and I appreciate that, but one other thing, I would really like is to introduce you to a friend, a business friend, Anatoly Lavrin, his office is not far from your hotel off Tverskaya, I will join you if you are free.”

“When?”

“Now, we shall take my car.”

Arrowsmith could not refuse if he wa