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. Last Updated: 07/27/2016

SAY WHAT? :Two Calls for a Deal With Oligarchs




I don't want to participate in the destruction of Russia," Boris Berezovsky said last week, explaining his decision to step down from the Russian parliament. It's a bit late for that. Berezovsky has already done his personal best to ruin this unhappy land.


As one of the richest and most successful of the so-called "oligarchs" who joined in the decadelong orgy of looting that wrecked the economy while creating a handful of billionaires and 50 million paupers in the Russia of former President Boris Yeltsin, Berezovsky's place in the annals of Russian destruction is sure.


But now, with President Vladimir Putin's tax police and prosecutors raiding one oligarch after another, the new president poses serious questions for everyone concerned about Russia's future. What puzzles is that whether Putin's goal is to save Russia or re-enslave it, he would have the same steps on his to-do list.


By attacking the once-untouchable oligarchs, Putin is serving notice that even rich people must comply with fundamental state laws.


Furthermore, he is making sure that, in the future, Russian businesses will pay taxes. That is really the only way the government can get the funds to do its basic jobs, like keeping hospitals running, paying teachers and getting pension checks to senior citizens on time.


Attacking the oligarchs is also excellent politics. Most ordinary Russians bitterly resent Berezovsky and his peers.


They are convinced, with some reason, that the privatization of Russian state assets was a dirty and illegal business, and that the current "owners" of Russia's oil and gas fields and its other valuable assets have no valid moral claim to their riches.


The harder Putin cracks down on the oligarchs, the more popular f and more powerful f he will become.


So far, so good.


But here's the rub. If your goal was to create a new and more efficient dictatorship, you would do exactly what Putin is doing. You would scare the oligarchs, confiscating the wealth of some and sparing others. You would bully the regional governors and generally convey the message that crossing the Kremlin could be hazardous to your political health.


So the G-8 summiteers were looking at Putin this weekend and asking the question Glenda asked Dorothy in "The Wizard of Oz": "Are you a good witch or a bad witch?"


The answer is that Putin himself may not know yet what kind of witch he wants to be.


But whether he turns out to be a good witch or a bad witch, it is in the U.S. interest for him to be a strong witch.


Washington needs a Russian government forceful enough to control any loose nukes floating around and one strong and self-confident enough to sign international agreements f and then keep them.


Berezovsky proposes that Putin should grant an amnesty to the oligarchs and let them keep whatever they managed to grab, however they got it.


Plenty of Westerners will agree with that logic f especially Western investors who've sunk billions of dollars into companies controlled by the oligarchs.


These investors will try to get Western governments to protect them if Putin's tax police and prosecutors start digging too deeply.


This is something Americans shouldn't do. Foreign investors in Russia knew full well that its privatization process was deeply flawed. Their hunger for potential profit was so great that they overlooked a basic business principle: Don't buy anything until you make sure the guy selling it has a clear title.


If Putin is as smart as he seems, he knows that a pragmatic compromise with the oligarchs and foreign investors is Russia's best course.


He will claw back enough money to satisfy public opinion and rebuild the credibility of the government; give the country a viable set of commercial and tax laws; and go on to other urgent issues f like rebuilding the crumbling medical and educational systems.


Let's wish him well f and hope he's a good witch. There isn't much more we can constructively do.


Walter Russell Mead is a senior fellow at the Council on Foreign Relations. He contributed this comment to the Los Angeles Times.