Doing High Stakes Business in Russia? … You'll Need a Good Antiquarian and Permission to Spend

With the current Spend Matters' thread surrounding ethical -- and non-ethical -- behavior in business, it was serendipitous to come across this article in today's New York Times about an antiquarian named Aleksandr Y. Khochinsky "who specialized in providing high-class grease for the best-connected palms in the government and other high-level circles" in Russia. The story goes that he "prided himself on his talent for finding the perfect gift. 'Tell me only a few details about the man,' he said in a recent telephone interview. 'Is he a hunter, a fisherman, does he chase women? I can find a gift.' ... Harried businessmen would rush in off the streets to his gallery [in Moscow], Bogema, and think nothing of spending tens of thousands of dollars for the right item to delight the powerful, whether a set of dueling pistols, a suit of armor, antique Rolex watches or a $2 million seascape by the Russian artist Ivan Aivazovsky." At least until "a Russian billionaire who had made his money in banking and real estate” had Mr. Khochinsky purchase "26 letters written by Voltaire to Catherine the Great, dating from 1768 to 1777 ... for $869,000 -- a world record for 18th-century handwritten texts, according to Sotheby's ... [for none other than] Prime Minister Vladimir V. Putin [then President] ... with the idea that he could then donate them to a Russian library". But the story doesn't end there.

According to The Times "Mr. Khochinsky says, the letters have vanished and he is out the $869,000 purchase price because the gift was not delivered ... the letters disappeared sometime after he gave them to Russia's Channel One, a state television outlet, to arrange a televised transfer of the documents to Mr. Putin." And needless to say "A spokesman for Mr. Putin said that the prime minister 'never saw these letters, and nobody ever gave him anything like this, or will give it to him. I don't know who bought these letters, but they don't have anything to do with Putin.'" Mr. Khochinsky is now at the center of this scandal, "accused of blackmail" and has left Russia. "Normally, the world [he] navigated so successfully is hidden from view. But now ... he has decided to lift the veil on the cozy world he knows so well."

That business customs, including gifting, vary widely between cultures and countries presents an interesting dilemma when it comes to doing business on a multinational basis. What is expected in one country might be abhorrent in another and also from an ethics perspective in the board room of the company looking to broaden its markets. So if you receive a requisition to procure an item from an antiquarian, you had better contact the company ethicist before sourcing it.

William Busch

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