Interview Insights Yuri Dud with Alfred Koch

Alfred Koch built his career in Leningrad — now Saint Petersburg. After graduating, he worked in a research institute, then became a university assistant, pursued graduate studies, and defended his dissertation. Not a single day did he work in production. Like many of Russia’s famous reformers, he was a careerist. He even served as chairman of the city executive committee in Sestroretsk, a suburb of Saint Petersburg.
When the pledge auctions were organized in the 1990s, Koch was the first deputy and helped prepare the program. But by the time the auctions actually took place, he was already in the United States, celebrating Christmas, responsible for nothing, yet earning a $100,000 fee for his book The Sale of the Empire, published exclusively in English in the U.S. For Russian readers, Pavel Khlebnikov’s The History of the Robbery of Russia soon followed, documenting these auctions as well.
Koch explained it simply to Dud’: imagine the state sells a factory for 100 million. The state owns a factory and has 100 million in the bank. The buyer — a former Soviet worker — has no money. The state grants him a 100-million loan, and he buys the factory for 100 million. On paper, it looks like the state now has 200 million.
But if the loan for the purchase is provided by the state itself, the factory effectively goes for free. The money was already state money — part of the budget sitting in the bank. Perhaps the money wasn’t touched; perhaps it was, since it was already in private hands and could be repaid in installments or delayed indefinitely. Meanwhile, public-sector employees — scientists, doctors, teachers, police officers — often went unpaid for months, sometimes years.
If the assets had remained state-owned, the budget would have continuously collected revenue from their operations and income taxes from employees. Enterprise efficiency is not determined by ownership form alone; it depends largely on the person in charge. Sergey Korolev, for example, did not own the space program, yet he created a powerful space industry out of passion, not personal gain.
Contrast that with today’s rulers, often acting with feudal ambitions: why explore the Moon or Mars when it is easier to seize a piece of someone else’s territory, start a war, and entertain ourselves and others? In war, law is replaced by brute force, and human rights are irrelevant. Survival, not morality, drives decisions.
The new, artificially speculative owners of the 1990s, meanwhile, focused primarily on personal enrichment, building ultra-luxury yachts. Talented engineers sometimes found opportunities to work within these structures, but this was the exception rather than the rule. Unpromising enterprises were not purchased, and promising ones were often deliberately devalued before auctions.
Consider Roman Abramovich: he acquired Sibneft for roughly $100 million, and later sold it for $13.5 billion. The funds were moved abroad, including to London, where he bought Chelsea FC and real estate. Part of the assets was frozen after a legal dispute with Boris Berezovsky, but what became of the remaining money remains unknown to the public.
Journalist Pavel Khlebnikov chronicled the looting of state property and the emergence of the oligarch class — a class of ultra-rich individuals who acquired formerly public assets. He was later murdered in Moscow.
The ordinary citizen had no recourse against these billionaire oligarchs, even if employed at their enterprises. Wages remained low, pensions and child benefits were negligible, and the social safety net collapsed.
Koch also revealed that he facilitated large cash transfers for political purposes, including to Alexei Navalny — sums in the hundreds of thousands, provided by oligarchs for political activities. Money was abundant; if he needed $14 million, Abramovich provided it. Generosity came easily when a phone call could secure a 100-million-dollar interest-free loan for a factory purchase, only to resell it for billions within a few years.
Today, Koch lives in Bavaria. In the interview, he mentioned wanting more servants and a gardener to avoid household chores himself. His desire for peace is undermined by worry — perhaps because one maid cannot manage everything, and his wife sometimes washes his plate, while he is unaccustomed to doing anything with his own hands. Dud’ looked perplexed and offered no sympathy.
American economist Jeffrey Sachs later commented on the gap between reform rhetoric and reality, describing the 1990s as a redistribution of wealth in favor of a narrow elite. Concentration of wealth in a few hands naturally led to concentration of power and influence — a chain of events whose consequences Russia still feels today.
Social consequences of the 1990s:
Months-long delays in salaries for public employees;
GDP decline of nearly 40%;
Sharp rise in mortality in the mid-1990s;
Widespread impoverishment of the population.
To shield his daughter Tatyana from corruption allegations, Yeltsin appointed Vladimir Putin as acting president. Putin, a master of intrigue, was able to compromise the prosecutor preparing a criminal case against her. As Putin himself later admitted, he continues to act as an agent of the intelligence services while playing the role of president.