Daniel Satinsky: So, what was your impression of AmCham as a member, and its importance to you or not importance?
Alexis Rodzianko: I remember being interested in participating in some of the… They would have these featured speaker events. I remember going to see Gorbachev at an AmCham event, I remember going to see Yavlinsky at an AmCham event, and I remember going to some of the Christmas parties, holiday parties, end of the year.
Daniel Satinsky: So, it wasn’t a major institutional connection for you socially?
Alexis Rodzianko: Not so much because we were very tightly linked to the Central Bank, the regulators. The Association of Russian Banks, I would say I spent a lot more time there than at AmCham.
Daniel Satinsky: I see, okay. And so, for other expats who lived there, always a question of mine is how much they interacted with Russians as opposed to interacting with that expat community. I’m assuming that’s not really a valid question for you because you were probably integrated into Russian society in a different way.
Daniel Satinsky: I think that’s true, that’s very true. I enjoyed the expat community. I had friends among the expat community, but I probably have more acquaintances and friends among the Russians in any case. And my colleagues in Deutsche Bank, my colleagues at JP Morgan, and all of the places I worked were 95% Russians.
Daniel Satinsky: Okay. And so as you look back at this, what do you think your impact has been on Russia and the Russian post-Soviet, Russian reconstruction?
Alexis Rodzianko: I can’t… I wish I could build something heroic out of it, but… [Laughs.]
Daniel Satinsky: Well, it was notable, let’s put it that way.
Alexis Rodzianko: I saw a lot, I participated in important things. How much of it was I driving? Not really. Was I influencing it? Probably a bit. Probably my biggest accomplishment is still the polo club. If I have a legacy, I’d say if I made a lot of friends who remember me well that would be my best reward.
Daniel Satinsky: Okay. And so as opposed to Peter, you didn’t have some vision of what you thought Russia was going to be and that it was going to turn out a certain way or…that wasn’t really part of your outlook, right?
Alexis Rodzianko: Well, I just never thought that I would be driving Russia’s future. I believed Russia had a bright future, and I enjoyed participating in little bits of that being built, but I never really had a sense of…this missionary sense that I always thought Peter had, that I saw a future for Russia that I would be building, and I would be shaping. I figured Russia would build its own future, and if I could play a part in that, great. If not, well, that’s the way the cookie crumbles.
Daniel Satinsky: Okay, all right. So, you didn’t have some sense of, I don’t know, not failure, but of remorse for the way that Russia’s economy has evolved away from all this kind of romanticism of the market in the early Yeltsin period?
Alexis Rodzianko: No. I mean, for me Russia today is a much more livable, much more civilized place than it was when I got here. In that regard I think Russia’s made enormous progress. In the sense of should it be organized a certain way, I mean, I guess I’ve got problems with the way Russia’s organized. I think the biggest issue I would have is the… It’s a similar issue I have with the U.S., that the secret services both in Russia and in the U.S. consider themselves above the law, above reproach, and beyond the reach of any supervision.
I’ll tell you, I mean, I’ve seen that in Russia many, many times. It’s not a good thing to see. And I’ve seen it in the U.S. recently as well. I still remember [James] Comey at a hearing being asked a question by someone from Congress, someone who was his supervisor, saying why didn’t you tell us this. And the answer he gave was it’s too sensitive for you to know. And for me that is like the ultimate breaking of—well, that’s the ultimate exposure. It’s like I’m above the law, I’m more important than you are, you’re my supervisor, but that’s just on paper. I think the U.S. is beginning to suffer that more and more, and unfortunately, Russia suffers it maybe even more obviously.
Daniel Satinsky: Yeah. Well, let me return to just some of what you think makes it livable, because my assumption is that a lot of the changes in Russian life that came about in the ‘90s in terms of movies, restaurants, entertainment, everyday life, a lot of those changes have persisted into the present, and that the impact of the ‘90s, while some people look at it as oh, it was a reversal when Putin took over and gradually to the 2000s, it seems to me that there’s a lot from the ‘90s in terms of the way people live and their experience of life that was changed by that period in a positive way. Would you agree with that?
Alexis Rodzianko: Absolutely. I mean, there’s no question that Western business, Western financial practices, Western financial institutions brought a lot of good to Russia that Russia picked up and carried, and continues to pick up and carry, so in that sense absolutely.
There’s one other thing that I think is a major step forward which is very under appreciated. When I started at AmCham—this was 2013—there was an enormous problem of small business not having an adequate share of the GDP, of the economy, and it was because there was a suppressive tax system. If you were a small business you had to have a staff like Sberbank to just fill in reports, which is impossible, so they couldn’t do it. So, you had this kind of clinch where small business couldn’t really operate openly because it had to fulfill requirements that it was completely incapable of fulfilling.
And in that time they made a major, major change, positive change, that allowed small business to flourish, and that change was if you’re a small business under some…turned over maybe 10, 20 million dollars, equivalent, you don’t have to do anything except pay 6% of your gross revenue to the government, and you’re done. And then they created that category, which is called—it’s called IP, or Individual Proprietor, which is a corporate form for individuals much like a Sub S corporation in the U.S., but even simpler because you don’t have to fill a whole bunch of paperwork. You do have to run through a bank account, but your bank account gives you all the forms, all the reports are filed, you have very little to do. You just run your business and pay your 6%. I do that. The polo club runs that way. And thank [God] it does because if it wasn’t I wouldn’t be able to run it.
Daniel Satinsky: Did AmCham have a role in that?
Alexis Rodzianko: Well, we had a small business practice, and I remember getting up and saying you have to simplify, you have to simplify. And at one of the conferences down in Sochi a young man got up and said you know, if you could just do a flat charge instead of wasting time on a bunch of paper, you spend a huge amount of money, you collect nothing, and you just stop anything from happening. And whatever he said is what the government ended up doing. I don’t know if we said it, but we certainly supported what he said.
But that concept has really, really taken off. And almost 80% of the suppliers I do business with in polo—in polo we might have turnover of a million dollars a year, maybe half a million dollars, maybe a million, and all of that goes through these IPs, individual proprietors. Or there’s a self-employed category as well, and some of our suppliers do that. But that’s been an enormous positive change. I hardly think I’ve ever seen it reported.
Daniel Satinsky: No, it is surprising, yeah. Are there other sort of reflections on your period as president of the AmCham that you want to share?
Alexis Rodzianko: Yeah, sure. When I got there, I told you, my thought was this is going to be tough because the relationship is so bad. When I got there, I was surprised by how constructive the relationship of business, U.S. business and the Russian government was. It was very practical, it was very constructive, it was quite positive. There was not a… It didn’t carry the weight of geopolitics. It tried to avoid geopolitics. And avoiding geopolitics and just doing business, businesses in Russia always did well.
I remember even in the bank noticing that when you had a big banking conference you would, back in my day, all the managing directors would get together all around the world, and China would get like huge amounts of time and press. They would talk forever and ever. India would get a whole bunch of time and press, Brazil would get a whole bunch of time and press. But when you looked at the numbers, we always made more money in Russia, but we were like…it was like being the mistress. Yeah, you guys make the money, but just let’s not mention you.
And that, to me, that’s geopolitics. It’s 100% geopolitics. And business is not…business views geopolitics as one of the obstacles to doing business. And U.S. business in Russia, which had done very well, viewed geopolitics as its… I remember one of our directors at one of the major energy companies of the world saying my biggest problem is the U.S. government.
Daniel Satinsky: Because of geopolitics.
Alexis Rodzianko: Because of geopolitics. So, that’s one thing that sticks with me. That relationship was much more solid, much more constructive. And then we did have a… I remember when the sanctions came in, and this was literally just after I got there in 2014, the first sanctions package hit, and we had this conference once a year where the businesses would get together, and it was called a strategic retreat. We’d spend a Saturday morning and afternoon going over our plans for the year. Really intense kind of a meeting.
And it was traditional that the U.S. government would send representatives. The commercial officer would generally be there. And before the meeting in 2014 [sic 2015] one of my directors had a meeting with me and they go Alexis, you know, we have our board meetings, and there’s always a government representative there, and we’re talking about our problems, our stuff, and he started sitting there taking notes, and then he goes home and designs sanctions based on the notes he took at our meeting.
So, why don’t we just not invite the U.S. government to our strategic session? So, we didn’t. And this was during the term of John Tefft as ambassador. So, we didn’t invite them. They noticed, obviously.
Daniel Satinsky: Obviously, yeah.
Alexis Rodzianko: And kind of grumbled a little bit. And at that meeting I remember saying, look, we didn’t invite the government, and I understand why we didn’t invite them, and they noticed, and just because we didn’t invite them doesn’t mean they go away. We’re going to have to deal with them anyway. So, one of the other board members goes, well, when we have a problem in our company, we have a meeting, and we talk about it. So, okay, good idea.
So, the chairman of the board and I called John Tefft, set up a meeting, and go to the U.S. embassy, sit down with him. We sit down, they give us cookies and coffee, and then he walks in and just starts to lambaste us. How dare you? You’re going to ruin your reputation forever and ever. We don’t know what we do for you. And at that point I interrupt. I go you know, you’re right, you don’t know what you do for us. Because that’s exactly the point.
Daniel Satinsky: [Laughs.] Whoa.
Alexis Rodzianko: And so basically, we had a big down and out meeting. But it helped clear the air. And after that we invited them again. And after that they were a lot more, how to say, a lot more engaged with us in terms of what they were messaging back to Washington and what they were messaging back to us, so it helped open the relationship.
Daniel Satinsky: Okay. So, the relationship remained, let’s say, a working or good relationship between AmCham and the embassy representing the political goals of the U.S.
Alexis Rodzianko: Well, yeah, there was that. And then there was the election of Trump in 2016, and literally we had a board meeting right in December, early December right after that happened. And one of his surrogates was in town, and I invited him to our board meeting, where he described his experience during the campaign, which was fun to listen to. And then he leaves the room.
And at that point the chairman of Exxon had already been nominated as Secretary of State, Tillerson. And Tillerson’s righthand man in Moscow was a member of our board, so we asked the surrogate to leave. He leaves, and we go on with our meeting, and we turn to him and go okay, what should we expect? What’s this going to mean for the relationship with Russia? He goes on and he says it’s going to be a sea change. The priority of the Trump administration is China, and part of that priority is to get Russia onside so the relationship will be 180 degrees better.
Well, that didn’t happen, obviously. Remember, there was the whole story, which I guess is still playing out, the Russia investigation, now known as this hoax, and who was driving that, and what its purpose was. But what I understood is that Trump may have had that instinct, but the quote/unquote “policy establishment” basically had its way with him, and it never happened, and the relationship just got worse. And then Biden came in, and I was there pretty much for most of the Biden years.
And I remember the very last exposure to the U.S. government was December of ’21. I was just about to leave, but there was a visit by Victoria Nuland to Moscow. So, Victoria comes to Moscow, the relationship is bad. If you remember, about that time Russia came out with its sort of final, this is our, you know, you’ve got to do this or else. It was like a letter asking for negotiations and a certain new security architecture. And then Victoria comes to town, and we get invited, the U.S. business delegation gets invited to a breakfast with her. And I guess one of the other important, interesting features, we had a meeting with [Sergey] Lavrov as well, and earlier we had had a meeting with Lavrov as well. I get this impression that Lavrov is looking at us like we’re part of the U.S. government. And when Victoria was in a meeting with us she was looking at us as part of the Russian government. So, we were definitely targets in the crossfire.
Daniel Satinsky: Wild.
Alexis Rodzianko: The whole business community and AmCham as its representative. So, at this breakfast with Victoria, she came in and there was like a headline as she came in that said that she was looking for a predictable and stable relationship with Russia. And I’m thinking about this headline before the meeting starts, and I go that’s crazy. It’s really predictable. It’s been going downhill for four years. Stable would be a real accomplishment. And so, we get in the meeting, and we’re talking about—she mentioned it. She goes, you know, we can’t seem to get the Ukrainians to live up to the Brest, whatever it’s called.
Daniel Satinsky: Minsk. The Minsk accords.
Alexis Rodzianko: We can’t get them to live up to the Minsk accords. And I remember sitting there listening and thinking wait-wait, don’t you appoint the prime minister? What’s your problem? [Laughs.] She went on with this. And I think that was like a foreshadowing that shit’s going to hit the fan, that that’s what she was really trying to say. And I remember stopping and saying, well, you know, you came here, and the headline was predictable and stable. I have to say you’re pretty much there with predictable, but it would be really nice if you could accomplish stable. And they didn’t mean it that way, so they were kind of surprised that I picked up on the predictable comment.
Daniel Satinsky: Yeah.
Alexis Rodzianko: But that’s another kind of highlight, lowlight just before I left. And then I left, and I remember the army was at the border, and I remember thinking this is crazy, 200,000 people to invade a country that big, it’s never going to work, they’ll never do it. And then they did.
Daniel Satinsky: Yeah, yeah, and then they did, and everything became very predictable, yeah.
Alexis Rodzianko: And now it’s playing out pretty much the way it’s going to have to play out.
Daniel Satinsky: Yeah . Well, you know, as you were thinking about this interview today were there things that you wanted to talk about that we haven’t touched on?
Alexis Rodzianko: No, I think we’ve hit on a lot of things I hadn’t even thought about for the interview.
Daniel Satinsky: Yeah, okay. All right. Good, good. Well, I have found this enormously interesting, and your experience is so rich and sort of an insight into things that are at a very high level, so I really appreciate that you took the time and that you were willing to speak with me for this interview.