About
About
Alexis Rodzianko was President and CEO of the American Chamber of Commerce in Russia from November 2013 to December 2021. Prior to that he was a banker in New York and Moscow for three decades. He held senior positions in IFC Metropol, Credit Suisse, Deutsche Bank, and JP Morgan in Moscow from 1995 through 2013. He began his banking career as an emerging market specialist with Manufacturers Hannover Bank and then as a senior banker at Chemical Bank in New York in the Emerging Markets business of the bank.
Mr. Rodzianko is the grandson of Mikhail Vladimirovich Rodzianko, Chairman of the State Duma and one of the leaders of the 1917 February Revolution, who went into exile after the Bolshevik victory in the 1917 October Revolution.
Before receiving his MBA from Columbia University in 1980, Mr. Rodzianko served as an interpreter at the SALT II negotiations in Geneva. A fluent Russian speaker, he owns the Moscow Polo Club and represents Russia at the International Polo Federation (FIP).
Mr. Rodzianko is the grandson of Mikhail Vladimirovich Rodzianko, Chairman of the State Duma and one of the leaders of the 1917 February Revolution, who went into exile after the Bolshevik victory in the 1917 October Revolution.
Before receiving his MBA from Columbia University in 1980, Mr. Rodzianko served as an interpreter at the SALT II negotiations in Geneva. A fluent Russian speaker, he owns the Moscow Polo Club and represents Russia at the International Polo Federation (FIP).
Daniel Satinsky: First of all, thank you for agreeing to give me this interview, as you’re of a unique history in Russia because of your family ties. I’m wondering if you can go back and reconstruct your relationship to Russia through your family and then what you were doing and thinking in the ‘80s and ‘90s. I know that’s a big topic, but I want this to be kind of a conversation rather than a series of questions.
Alexis Rodzianko: Okay. Well, the very, very earliest memories I have are in Russian. I grew up in a White Russian family that had just, shortly before I was born, arrived in the U.S., having been refugees twice, once just before my father was born, and they left Russia in 1920 during the civil war and landed in Serbia. And in Serbia my dad was born, but Serbia at that time had like a million Russian refugees that did pretty well, and they were generally educated professionals or aristocrats, and were educated, and so they did well in Serbia, and Serbia was kind to them, was welcoming. So, they had kind of a…my dad, I know, was born there and grew up there and really loved the place.
And then World War II comes around, and that was kind of an oil and water situation. There’s the socialists and the partisans who were leftists, communist sympathizers and then there was the German occupiers, and then there were the people who were stuck in between.
My grandparents and my father were kind of caught, and towards the end of the war when the Red Army came through they were still fairly recent to when they were on the hit list, and there was no particular good outcome for sticking around, so they were refugees again, and ended up in Munich, in the Western zone occupied by the U.S., and after a few years there ended up as refugees under the Displaced Persons Act and legally emigrated to the U.S.
My mother’s family a very similar story, but they ended up in Estonia and then moved out during the Ribbentrop-Molotov Pact. They had enough German background so that they were allowed to go West. And they had an argument in the family where my grandfather said I don’t want to go any further from Russia than I am now, and his mother-in-law said no-no, it’s not about you, it’s not about what you want, it’s about saving your family—you stay here you’re going to be arrested, you’re going to lose your children, you’re going to lose your family, so pack up, go. And they ended up in Munich as well after the war. My parents met and married there. And as I said, ended up in the U.S. in, I think, 1949. I was born in ’51.
Daniel Satinsky: Where did they come in the U.S.?
Alexis Rodzianko: New York City. And I was born in the Bronx not too far from Yankee Stadium.
Daniel Satinsky: When they came over, did they—I don’t know how to ask this right—but what was their occupation? What were they doing? Did they have some family money that remained from the past or were they in business? What were they doing?
Alexis Rodzianko: No, they had no money. And my father ended up working initially in a factory, and then he went to school at night and ended up, eventually he became a professor of engineering at Bronx Community College. So, what they had with them was no money, but they had a tradition of education behind them. You know, someone said how many degrees does it take to be an educated person, and the answer is three: yours, your father’s and your grandfather’s.
Daniel Satinsky: [Laughs.] Okay. Interesting. And did they become part of a White Russian community in New York, or was there such a thing?
Alexis Rodzianko: Yes, there was, and there was a Tolstoy Foundation. Leo Tolstoy’s youngest daughter set up a foundation to help refugees from communism, and she helped my parents as well. And they settled—right around that area there’s quite a large Russian community that built parishes and schools, Sunday schools. So, yeah, there was, and essentially that’s where I grew up.
Daniel Satinsky: That’s where you grew up. And did you speak Russian at home?
Alexis Rodzianko: I did, I did. Spoke Russian at home, and my parents sent me to Russian school on Saturdays when all the other kids were playing, and I was not fond of that, but I’m glad they did eventually. So, I did, yeah, I learned to read, write, and spoke Russian at home to my parents. I would feel awkward trying to speak English to them.
Daniel Satinsky: But they spoke English, I’m assuming, when…?
Alexis Rodzianko: Yes. Well, like I said, my father—
Daniel Satinsky: Was a professor. He had to have, right?
Alexis Rodzianko: As a professor of engineering. My mother eventually was a PhD in literature, Russian literature, and she taught at the university level as well.
Daniel Satinsky: Okay. And as you were growing up, did you ever expect that you would go back to Russia?
Alexis Rodzianko: No. The short answer, absolutely not.
Daniel Satinsky: And so, what did it mean being kind of a person with your background in your growing up? Or did you, like many of us who have immigrant background families, just thought of yourself as an American?
Alexis Rodzianko: Well, actually, when I was growing up I was known as—my brothers and I and sisters—we were known as the Russians. That was our handle. But we played football. We were part of the sports. We kind of blended in really well at school. It was not a problem. But it was a little bit of a, kind of a notoriety or celebrity sort of thing.
Daniel Satinsky: And you had how many brothers and sisters?
Alexis Rodzianko: Two brothers, two sisters.
Daniel Satinsky: So, did you, at the time you were growing up you didn’t think about your professional future in terms of Russia? It was just whatever—your education was for in the U.S. or not?
Alexis Rodzianko: Yeah, okay. So, my high school education was post Sputnik, and so there was a lot of STEM emphasis, as you probably remember.
Daniel Satinsky: Yep.
Alexis Rodzianko: And so, I did a lot of math, I did a lot of science, and I played football, and I played lacrosse, and I ended up doing well in school, and so I applied and was accepted at Dartmouth, where I wanted to go because I love to ski. Winter was skiing season, and Dartmouth had its own ski mountain, so that was the place I wanted to go. So, I went.
But at Dartmouth I also started off with a lot of math. In my freshman year I think I did about half of a math major. And I also followed what about half of my class did, which was premed. And premed was a lot of sciences—biology, organic chemistry, chemistry, physics—a lot of science. My major, because of my interest, was Russian language and literature. There was a good Russian department at Dartmouth, and that was what I was interested in. And you know the mantra at liberal arts colleges was follow your heart, follow your interests, right?
Daniel Satinsky: Yeah. And this was it.
Alexis Rodzianko: And when I graduated, I didn’t really have plans for my future. I was a little bit… I kind of enjoyed college way too much and didn’t want to look beyond it. But as I was about to graduate, this was the time of détente under Nixon and Brezhnev, and I was kind of directed by…my cousin’s husband said hey, you know, they’re looking for interpreters to travel around with these delegations, and there’s lots of them. So, I did. I went to D.C., I took tests, and I was hired as an escort interpreter with these delegations, and that’s what I did for the first two years after college.
And then two years in there was this big push to do disarmament, and I was one of the interpreters that was tested and passed and invited to join the SALT talks, the disarmament talks, SALT II, Strategic Arms Limitation Talks. And that was kind of my big…kind of a big break, I guess. Not every interpreter got that opportunity. I did. And I went. But the other thing that I figured out pretty quickly was I didn’t really want to spend my life repeating after someone.
And one of the trips that I had been on was U.S. education, and one of the several stops were in business schools, and I stopped and listened to the deans selling business schools and decided well, I probably want to do that. And I ended up in business school. After SALT II was signed, I ended up at Columbia business school. And one thing led to another. I ended up, after a year of accounting I ended up as a banker. And this was 1981.
Daniel Satinsky: 1981. And a banker where?
Alexis Rodzianko: I was a banker in New York City for what was then Manufacturers Hanover. If you trace that history, today it’s part of JP Morgan.
Daniel Satinsky: Okay, yeah.
Alexis Rodzianko: And they hired me, oddly enough, for their East European business, so I did that. And that gave me a chance to travel around Eastern Europe—Poland, Romania, Hungary. Those were the three main countries. And then I ended up quite a bit of my time in Russia as well.
Daniel Satinsky: In the early ‘80s?
Alexis Rodzianko: In the ‘80s, yeah, so it was the Soviet Union.
Daniel Satinsky: Right. And what kind of banking relations did the bank have in that period of time?
Alexis Rodzianko: I guess the very quick quip would be better than today. [Laughs.]
Daniel Satinsky: [Laughs.] Very good. So, they had correspondent relations with Soviet external banks?
Alexis Rodzianko: Yes. There was Vneshtorgbank that did all the foreign trade, and then there was the development bank, and there was the central bank. Those were the three stops. That was it.
Daniel Satinsky: Right. So, you were the bank’s representative for those relationships?
Alexis Rodzianko: Yes.
Daniel Satinsky: Okay. And how did the Soviet official—obviously they knew who you were and your background. Did that matter to them one way or another?
Alexis Rodzianko: Well, it was a matter of curiosity. They would make a point of it sometimes. They’d ask me if I’m related to this particular person from Russian history, and that particular person was my great-grandfather, so I would say yes, and we would have a bit of a conversation around that. But it was more curiosity, I would say. And I would say I met—I mean, some still had the reds and whites thing, but a lot of them were mostly curious, and it was more of positive curiosity.
Daniel Satinsky: It must have helped that you had familiarity with the language and culture that allowed them to feel more comfortable with you, or am I imagining that?
Alexis Rodzianko: No, that is fair. I could speak to them in their language, and it made a difference, I think, of course. But the straitjacket in which business was done was quite restrictive. I mean, there were only certain things you could do, and those were the things we did, and not much else. I do remember doing a grain deal where I financed the sale of U.S. grain into the Soviet Union, which is also an interesting byline. Today it’s the exact—well, it’s not the opposite, but today the Russian Federation and Ukraine, which were in the Soviet Union together, were grain importers. Today they’re the world’s largest grain exporters.
Daniel Satinsky: Yeah. It’s an amazing transformation. But at that period of time you couldn’t…you didn’t visit people’s homes, or you didn’t have a social relation with the bankers that you were dealing with?
Alexis Rodzianko: No. No, that was really restrictive. And, I mean, it was very much…the people that I saw much more close up and over a longer period of time were the members of the delegation of the SALT talks, because we would meet with them for two years every other day. But that was a super high pressure, super protocol driven relationship, yeah.
Daniel Satinsky: So, we’re in the mid ‘80s, and you’re traveling back and forth. So, when Gorbachev became General Secretary, did you anticipate the changes that he implemented?
Alexis Rodzianko: Well, I mean, I was very curious because the changes were significant. The main hand of oppression in human relations between people was lifted, and so there was a lot more freedom of expression, and there was a lot more freedom to, I guess, mingle, to have social relations with people. Before that it was very, very strictly monitored, controlled, and everybody was afraid.
Daniel Satinsky: Yeah. And so, did you foresee the events that led to the collapse of the Soviet Union?
Alexis Rodzianko: I did expect a big change because I remember being there with my boss in like 1986, and we had dinner at the National Hotel, and we were feasting on caviar and blini and vodka, and having a conversation, and I told him, I said, look, for me this system cannot survive. It’s a choice. The people here have a choice, either their survival or the system’s survival. It’s not compatible with life. It’s not compatible with continuation. So, in a sense I did expect it to crumble, which it did. But I was not…it was not a common train of thought. I remember the boss came back to me later and said hey, you know, you were the only one who ever said that would happen. So, I did expect some change. I didn’t expect it to be quite as dramatic.
For me the big moment, the big inflection point was the Wall, the Berlin Wall, and the unification of Germany. That was the big deal. And the breakup of the Soviet Union in ’91—I actually remember my profession at that point was emerging market debt. And if you remember those years, it was the years of…there was a lot of lending to what were then called LDCs, less developed countries, which eventually became rebranded as emerging markets. Which today are known as the BRICS.
Daniel Satinsky: Right.
Alexis Rodzianko: But back then they were all failing. If you remember, Paul Volcker attacked inflation by raising interest rates to 20%, and every single country in Latin America, the Philippines, Eastern Europe, they all went down because they couldn’t pay the dollar debt. And that going down was a big deal for banks because they were holding all the debt. All of a sudden it was worth a lot less than par, which was what it was supposed to be worth. And so, there was a whole big effort to restructure it. And then there was this emergence of a market trading in the discounted debt. And that was my profession. I went into trading of the discounted debt.
And I remember seeing—the Soviet Union held up longer than the others. They all went down in like 1985, ’86, ’87. The Soviet Union was paying its debt, paying its debt. But I remember sitting there thinking I’ve seen this movie before, this is going to go down, and there’s going to be another debt default. And that default was also a trigger to the collapse of the whole Soviet Union.
And I remember in ’91 going to the Kremlin with one of the bankers that I’d met over the years of calling on the three banks, and having a meeting with an advisor to Gorbachev, suggesting ways that they could begin working down their debt. I’d seen that happen in other countries. I knew what could be done. I knew what opportunities there were and what other countries had done, and I was suggesting a certain kind of…not a transaction, but a certain approach to it. And that happened, I think it was like November of ’91. It was like literally a month before Gorbachev was kicked out.
Daniel Satinsky: Wow. Yeah. So, this was after the coup against Gorbachev, but before Gorbachev resigned.
Alexis Rodzianko: This was before the coup against Gorbachev.
Daniel Satinsky: Okay, so it would be before August.
Alexis Rodzianko: Yeah. And I went in there with a colleague that worked with me, and his brother is Boris [Jordan], and his name is Nick Jordan.
Daniel Satinsky: Ah.
Alexis Rodzianko: Nick is Boris’s older brother. He and I worked together for many years.
Daniel Satinsky: I see, I see. So, then it all happened, so the Soviet Union is dissolved, and Yeltsin is president. Where were you in that process? What were you doing around that time?
Alexis Rodzianko: Well, I was in charge of emerging markets debt trading globally, and [it also] was kind of a pet project for me because that’s where my background was. And as I said, I was expecting to see this movie play out, and here I was watching that movie play out. And the debt went from being worth 100 cents on the dollar to being worth 20 cents on the dollar. And at some point, you decide where is the bottom, where do you start speculating, where do you start doing transactions.
And I was doing that along with Nick. Nick was the specialist on Russia. I had broader responsibilities for the world. But I would travel to Russia maybe twice a year, and he would travel once a month. And we were looking at what to do. And we did some very interesting transactions where the sovereign debt was worth maybe 20 cents on the dollar. And then there was a shipping company that was doing business globally, and we found a way for them to repay their debt to VTB* by buying VTB’s debt at a discount and cancelling it in part, so they made a big gain.
Daniel Satinsky: Wow. Which one of the shipping companies was that?
Alexis Rodzianko: It was called Sovcomflot, and it was a transaction that Nick and I worked on together.
Daniel Satinsky: Okay. And—yeah, go ahead.
Alexis Rodzianko: So, that was it. And then I remember sitting in my office and doing calculations that essentially said that oil reserves in Russia were priced at three cents per barrel, which even at those low prices for oil at that time was ridiculously cheap. And then they came up with their privatization program, which was what they were going to do is take 20% of all the companies in Russia that had been part of ministries, and they were going to turn them into joint stock companies. Twenty percent of their stock would just be handed out to every man, woman and child in Russia in the form of vouchers. These vouchers could then be exchanged for a total value of 20% of all of the stock to be issued.
And actually, it was a pretty good deal, but a lot of people didn’t realize what they had, didn’t know the first thing about companies, stocks, whether stocks would ever be worth anything in Russia or whether they wouldn’t, so there were all sorts of people buying up vouchers for cases of vodka, you know, that kind of story.
And I remember going to my bosses and saying look, these vouchers here, you can get them for this much. That means 20% of all of Russia, which today is worth $20 billion, which is nothing. It’s got to be worth more eventually. And you can buy 20% of it for like $200 million, so it’s crazy not to do it just as a speculative matter. And we got as far as sending a delegation to Russia to examine these vouchers. And then the decision was we couldn’t trust the settlement process, so we couldn’t do it, because it was paper, and you didn’t know if the paper was real, and what’s the system for checking these vouchers for whether they’re real vouchers or printed vouchers, so ultimately, we didn’t do it. A lot of people did and ended up making fortunes. But we missed that boat. And maybe it’s just as well. But we did do well and made money trading the Russian debt.
Well, eventually, as things happen in banks, there were reorganizations, and the Fed came in and said you can’t do this and this together, you have to separate it out. In the process I was basically replaced in my job and offered a chance to go to London as an investment banker covering Eastern Europe. And at the same time, I got an offer to join a startup investment bank in Moscow. This was 1995. And that’s where the call of the background came in because the job in London was a real job. The job in Moscow was a toss of the dice. But I figured look, I better toss the dice because if I don’t I’ll always think about “what if.”
Daniel Satinsky: What if, right.
Alexis Rodzianko: And okay, so I’ll toss the dice, and probably six months from now I’ll be back looking for a job, and I can probably find a job, so let me do it. And that was 30 years ago now.
Daniel Satinsky: Wow. What was the…who did you go to work with in ’95?
Alexis Rodzianko: There was a fellow called Hans-Jorg Rudloff, who had been a bond king at Credit Suisse, and he set up a series of Eastern European banking startups, and he put me in charge of the Russian startup.
Daniel Satinsky: And the name of it was?
Alexis Rodzianko: The name of it was United City Bank, and the foreign entity was called MC Securities. It was a small brokerage, and it was supposed to—part of the story is this funny story because he said $20 million of capital, and you can set up this business. And for me, I looked at the big picture, and $20 million at that time in Russia was a lot of money, so I thought that’s great. So, I signed up, and I agreed. I got there and looked at the accounts and there was like 2 million dollars there. So, I said hey, Hans-Jorg, where’s the other $18? And that was a big… And I spent like three months arguing and threatening to leave and everything. And that eventually got up to $10, but $10 was enough to make it work, and we became like the No. 5 broker in Russia within a year.
But then in that year my ex-competitor...part of what I did was in New York I was part of the Emerging Markets Traders Association (EMTA), which was a group that was a self-governing body for this Wild West market that grew up out of the failed debt of Latin America and Eastern Europe and the Philippines. And the heads of all the businesses kind of went—we were told by the Fed you guys organize yourself or we’ll organize you, and you’re not going to like it. So, we did that.
And the head of JP Morgan—I was then head of what was Manny Hanny and then Chemical Bank, so I was head in Chemical Bank. Nick Rohatyn was heading up JP Morgan. And he and I got along pretty well. So, I left for Moscow, and he comes to Moscow, and he calls me up, and he goes, hey, we’re going to open a bank here, would you like to join us? And I thought about the two million that turned into $10 million that never quite got to $20 million, and here’s JP saying we’re putting in $50, which I can believe much more readily. So, I said yeah, I’ll do that. So, I ended up at JP Morgan in 1997.
Daniel Satinsky: How long were you at the other startup?
Alexis Rodzianko: I was at the other startup for about a year and a half.
Daniel Satinsky: About a year and a half. Before you go on, it seems to me you were, you know, Peter Derby had started Dialog Joint Venture and then Dialog Bank and Troika Dialog, and Boris Jordan was starting up Renaissance Capital, so there was a whole group of you who probably knew each other and had the same White Russian background who were very important in this financial market that developed in post-Soviet Russia. Am I…?
Alexis Rodzianko: Well, you’re right. I did know both of them. I met with Peter quite a few times. I worked with Boris’s brother. We knew each other, and I knew Boris as well. I mean, there are different—as they say in business, everyone is a bank, but every bank has its own personality, and its own approach, and its own strategy. And there’s probably no two people more different than Peter Derby and Boris Jordan.
Daniel Satinsky: Okay.
Alexis Rodzianko: Peter was a…he was like a missionary. Peter believed that he would, through his forthright approach, would put Russia on the path to salvation, and he was going to be a straight arrow. And he was. I admire that. I found him a little bit like too messianic, if that… But I always liked him, and I respect Peter quite a bit. I think he was… And he was kind of a half generation younger than me. Boris was probably 15 years younger than me. So, I came in as a 40-something-year-old banker and they were 20-something startup guys, so it was a little bit of a generational difference. And for me Boris was more of a cowboy. He was there to take advantage of every possible innuendo that he could take advantage of. He was going to play the game the way the Russians played the game.
Daniel Satinsky: Okay, yeah.
Alexis Rodzianko: And I grew up in banks. I had all sorts of compliance people all over me, and the Fed and everybody, so I had a different approach to things. And I remember sitting there thinking, even in that first bank, that trying to become the owner of a company is a big mistake because that’s politics, and if you’re… Yeah, it would be great to speculate but just don’t ever touch the point where you become a political enemy. And so, I was more of a portfolio player, I guess, in a sense, than I was… And I tried to stay away from Russia’s pretty bloody politics. It was pretty frightening stuff.
Now Peter was setting up a very, very specific kind of business, but even he eventually was forced out of it. He was forced to sell. His forced sale turned out to be the biggest break in his life, I think. But it was a forced sale. It was not something that he wanted to do, it was something he had to do.
And I never got into the position of being an equity holder to the point of where I owned a business. I was more of a hired gun in a very regulated environment. So, it was different approaches, different styles, I guess.
Daniel Satinsky: Yeah. And so when you left the startup bank and went to JP Morgan was there sort of bad blood from that or was that…?
Alexis Rodzianko: No, not really. The owner of the business wanted to run it themselves, and it was an agreeable departure in any case.
I never had anything against them, and they never held anything against me. Now JP was interesting because we set up the business and I joined in early ’97. Middle of ’98 we actually moved the trading team that I’d built from London to Moscow, and within three weeks the big crisis hit, you know, the place—
Daniel Satinsky: Right, the fall.
Alexis Rodzianko: —that whole thing went up in smoke. Now I can’t say we didn’t lose money. We did lose some money, but on a relative basis it was pennies compared to the rest of the Street, which lost billions, and they lost their jobs. And I didn’t lose my job, and they even paid me a bonus that year.
Daniel Satinsky: Wow. Okay.
Alexis Rodzianko: And then the next year, because we had done pretty well getting out of the way, we still had ability, and we made all the money back and more within a year. Within two years JP Morgan was sold to Chase. Now I had grown up in Chase. I was there. When I left, I didn’t take the job in London, and that was a Chase job. And all the same people were there, and they knew me, they knew I went to JP, so I was kind of in the doghouse. But instead of letting me go they kept me there and put me in an operating position rather than a line position. I spent another year restructuring, because it was… And Chase ended up with three banking licenses in Moscow, and needed to get it down to one, so my job that year was reducing the three to one, which is what I did.
Alexis Rodzianko: Okay. Well, the very, very earliest memories I have are in Russian. I grew up in a White Russian family that had just, shortly before I was born, arrived in the U.S., having been refugees twice, once just before my father was born, and they left Russia in 1920 during the civil war and landed in Serbia. And in Serbia my dad was born, but Serbia at that time had like a million Russian refugees that did pretty well, and they were generally educated professionals or aristocrats, and were educated, and so they did well in Serbia, and Serbia was kind to them, was welcoming. So, they had kind of a…my dad, I know, was born there and grew up there and really loved the place.
And then World War II comes around, and that was kind of an oil and water situation. There’s the socialists and the partisans who were leftists, communist sympathizers and then there was the German occupiers, and then there were the people who were stuck in between.
My grandparents and my father were kind of caught, and towards the end of the war when the Red Army came through they were still fairly recent to when they were on the hit list, and there was no particular good outcome for sticking around, so they were refugees again, and ended up in Munich, in the Western zone occupied by the U.S., and after a few years there ended up as refugees under the Displaced Persons Act and legally emigrated to the U.S.
My mother’s family a very similar story, but they ended up in Estonia and then moved out during the Ribbentrop-Molotov Pact. They had enough German background so that they were allowed to go West. And they had an argument in the family where my grandfather said I don’t want to go any further from Russia than I am now, and his mother-in-law said no-no, it’s not about you, it’s not about what you want, it’s about saving your family—you stay here you’re going to be arrested, you’re going to lose your children, you’re going to lose your family, so pack up, go. And they ended up in Munich as well after the war. My parents met and married there. And as I said, ended up in the U.S. in, I think, 1949. I was born in ’51.
Daniel Satinsky: Where did they come in the U.S.?
Alexis Rodzianko: New York City. And I was born in the Bronx not too far from Yankee Stadium.
Daniel Satinsky: When they came over, did they—I don’t know how to ask this right—but what was their occupation? What were they doing? Did they have some family money that remained from the past or were they in business? What were they doing?
Alexis Rodzianko: No, they had no money. And my father ended up working initially in a factory, and then he went to school at night and ended up, eventually he became a professor of engineering at Bronx Community College. So, what they had with them was no money, but they had a tradition of education behind them. You know, someone said how many degrees does it take to be an educated person, and the answer is three: yours, your father’s and your grandfather’s.
Daniel Satinsky: [Laughs.] Okay. Interesting. And did they become part of a White Russian community in New York, or was there such a thing?
Alexis Rodzianko: Yes, there was, and there was a Tolstoy Foundation. Leo Tolstoy’s youngest daughter set up a foundation to help refugees from communism, and she helped my parents as well. And they settled—right around that area there’s quite a large Russian community that built parishes and schools, Sunday schools. So, yeah, there was, and essentially that’s where I grew up.
Daniel Satinsky: That’s where you grew up. And did you speak Russian at home?
Alexis Rodzianko: I did, I did. Spoke Russian at home, and my parents sent me to Russian school on Saturdays when all the other kids were playing, and I was not fond of that, but I’m glad they did eventually. So, I did, yeah, I learned to read, write, and spoke Russian at home to my parents. I would feel awkward trying to speak English to them.
Daniel Satinsky: But they spoke English, I’m assuming, when…?
Alexis Rodzianko: Yes. Well, like I said, my father—
Daniel Satinsky: Was a professor. He had to have, right?
Alexis Rodzianko: As a professor of engineering. My mother eventually was a PhD in literature, Russian literature, and she taught at the university level as well.
Daniel Satinsky: Okay. And as you were growing up, did you ever expect that you would go back to Russia?
Alexis Rodzianko: No. The short answer, absolutely not.
Daniel Satinsky: And so, what did it mean being kind of a person with your background in your growing up? Or did you, like many of us who have immigrant background families, just thought of yourself as an American?
Alexis Rodzianko: Well, actually, when I was growing up I was known as—my brothers and I and sisters—we were known as the Russians. That was our handle. But we played football. We were part of the sports. We kind of blended in really well at school. It was not a problem. But it was a little bit of a, kind of a notoriety or celebrity sort of thing.
Daniel Satinsky: And you had how many brothers and sisters?
Alexis Rodzianko: Two brothers, two sisters.
Daniel Satinsky: So, did you, at the time you were growing up you didn’t think about your professional future in terms of Russia? It was just whatever—your education was for in the U.S. or not?
Alexis Rodzianko: Yeah, okay. So, my high school education was post Sputnik, and so there was a lot of STEM emphasis, as you probably remember.
Daniel Satinsky: Yep.
Alexis Rodzianko: And so, I did a lot of math, I did a lot of science, and I played football, and I played lacrosse, and I ended up doing well in school, and so I applied and was accepted at Dartmouth, where I wanted to go because I love to ski. Winter was skiing season, and Dartmouth had its own ski mountain, so that was the place I wanted to go. So, I went.
But at Dartmouth I also started off with a lot of math. In my freshman year I think I did about half of a math major. And I also followed what about half of my class did, which was premed. And premed was a lot of sciences—biology, organic chemistry, chemistry, physics—a lot of science. My major, because of my interest, was Russian language and literature. There was a good Russian department at Dartmouth, and that was what I was interested in. And you know the mantra at liberal arts colleges was follow your heart, follow your interests, right?
Daniel Satinsky: Yeah. And this was it.
Alexis Rodzianko: And when I graduated, I didn’t really have plans for my future. I was a little bit… I kind of enjoyed college way too much and didn’t want to look beyond it. But as I was about to graduate, this was the time of détente under Nixon and Brezhnev, and I was kind of directed by…my cousin’s husband said hey, you know, they’re looking for interpreters to travel around with these delegations, and there’s lots of them. So, I did. I went to D.C., I took tests, and I was hired as an escort interpreter with these delegations, and that’s what I did for the first two years after college.
And then two years in there was this big push to do disarmament, and I was one of the interpreters that was tested and passed and invited to join the SALT talks, the disarmament talks, SALT II, Strategic Arms Limitation Talks. And that was kind of my big…kind of a big break, I guess. Not every interpreter got that opportunity. I did. And I went. But the other thing that I figured out pretty quickly was I didn’t really want to spend my life repeating after someone.
And one of the trips that I had been on was U.S. education, and one of the several stops were in business schools, and I stopped and listened to the deans selling business schools and decided well, I probably want to do that. And I ended up in business school. After SALT II was signed, I ended up at Columbia business school. And one thing led to another. I ended up, after a year of accounting I ended up as a banker. And this was 1981.
Daniel Satinsky: 1981. And a banker where?
Alexis Rodzianko: I was a banker in New York City for what was then Manufacturers Hanover. If you trace that history, today it’s part of JP Morgan.
Daniel Satinsky: Okay, yeah.
Alexis Rodzianko: And they hired me, oddly enough, for their East European business, so I did that. And that gave me a chance to travel around Eastern Europe—Poland, Romania, Hungary. Those were the three main countries. And then I ended up quite a bit of my time in Russia as well.
Daniel Satinsky: In the early ‘80s?
Alexis Rodzianko: In the ‘80s, yeah, so it was the Soviet Union.
Daniel Satinsky: Right. And what kind of banking relations did the bank have in that period of time?
Alexis Rodzianko: I guess the very quick quip would be better than today. [Laughs.]
Daniel Satinsky: [Laughs.] Very good. So, they had correspondent relations with Soviet external banks?
Alexis Rodzianko: Yes. There was Vneshtorgbank that did all the foreign trade, and then there was the development bank, and there was the central bank. Those were the three stops. That was it.
Daniel Satinsky: Right. So, you were the bank’s representative for those relationships?
Alexis Rodzianko: Yes.
Daniel Satinsky: Okay. And how did the Soviet official—obviously they knew who you were and your background. Did that matter to them one way or another?
Alexis Rodzianko: Well, it was a matter of curiosity. They would make a point of it sometimes. They’d ask me if I’m related to this particular person from Russian history, and that particular person was my great-grandfather, so I would say yes, and we would have a bit of a conversation around that. But it was more curiosity, I would say. And I would say I met—I mean, some still had the reds and whites thing, but a lot of them were mostly curious, and it was more of positive curiosity.
Daniel Satinsky: It must have helped that you had familiarity with the language and culture that allowed them to feel more comfortable with you, or am I imagining that?
Alexis Rodzianko: No, that is fair. I could speak to them in their language, and it made a difference, I think, of course. But the straitjacket in which business was done was quite restrictive. I mean, there were only certain things you could do, and those were the things we did, and not much else. I do remember doing a grain deal where I financed the sale of U.S. grain into the Soviet Union, which is also an interesting byline. Today it’s the exact—well, it’s not the opposite, but today the Russian Federation and Ukraine, which were in the Soviet Union together, were grain importers. Today they’re the world’s largest grain exporters.
Daniel Satinsky: Yeah. It’s an amazing transformation. But at that period of time you couldn’t…you didn’t visit people’s homes, or you didn’t have a social relation with the bankers that you were dealing with?
Alexis Rodzianko: No. No, that was really restrictive. And, I mean, it was very much…the people that I saw much more close up and over a longer period of time were the members of the delegation of the SALT talks, because we would meet with them for two years every other day. But that was a super high pressure, super protocol driven relationship, yeah.
Daniel Satinsky: So, we’re in the mid ‘80s, and you’re traveling back and forth. So, when Gorbachev became General Secretary, did you anticipate the changes that he implemented?
Alexis Rodzianko: Well, I mean, I was very curious because the changes were significant. The main hand of oppression in human relations between people was lifted, and so there was a lot more freedom of expression, and there was a lot more freedom to, I guess, mingle, to have social relations with people. Before that it was very, very strictly monitored, controlled, and everybody was afraid.
Daniel Satinsky: Yeah. And so, did you foresee the events that led to the collapse of the Soviet Union?
Alexis Rodzianko: I did expect a big change because I remember being there with my boss in like 1986, and we had dinner at the National Hotel, and we were feasting on caviar and blini and vodka, and having a conversation, and I told him, I said, look, for me this system cannot survive. It’s a choice. The people here have a choice, either their survival or the system’s survival. It’s not compatible with life. It’s not compatible with continuation. So, in a sense I did expect it to crumble, which it did. But I was not…it was not a common train of thought. I remember the boss came back to me later and said hey, you know, you were the only one who ever said that would happen. So, I did expect some change. I didn’t expect it to be quite as dramatic.
For me the big moment, the big inflection point was the Wall, the Berlin Wall, and the unification of Germany. That was the big deal. And the breakup of the Soviet Union in ’91—I actually remember my profession at that point was emerging market debt. And if you remember those years, it was the years of…there was a lot of lending to what were then called LDCs, less developed countries, which eventually became rebranded as emerging markets. Which today are known as the BRICS.
Daniel Satinsky: Right.
Alexis Rodzianko: But back then they were all failing. If you remember, Paul Volcker attacked inflation by raising interest rates to 20%, and every single country in Latin America, the Philippines, Eastern Europe, they all went down because they couldn’t pay the dollar debt. And that going down was a big deal for banks because they were holding all the debt. All of a sudden it was worth a lot less than par, which was what it was supposed to be worth. And so, there was a whole big effort to restructure it. And then there was this emergence of a market trading in the discounted debt. And that was my profession. I went into trading of the discounted debt.
And I remember seeing—the Soviet Union held up longer than the others. They all went down in like 1985, ’86, ’87. The Soviet Union was paying its debt, paying its debt. But I remember sitting there thinking I’ve seen this movie before, this is going to go down, and there’s going to be another debt default. And that default was also a trigger to the collapse of the whole Soviet Union.
And I remember in ’91 going to the Kremlin with one of the bankers that I’d met over the years of calling on the three banks, and having a meeting with an advisor to Gorbachev, suggesting ways that they could begin working down their debt. I’d seen that happen in other countries. I knew what could be done. I knew what opportunities there were and what other countries had done, and I was suggesting a certain kind of…not a transaction, but a certain approach to it. And that happened, I think it was like November of ’91. It was like literally a month before Gorbachev was kicked out.
Daniel Satinsky: Wow. Yeah. So, this was after the coup against Gorbachev, but before Gorbachev resigned.
Alexis Rodzianko: This was before the coup against Gorbachev.
Daniel Satinsky: Okay, so it would be before August.
Alexis Rodzianko: Yeah. And I went in there with a colleague that worked with me, and his brother is Boris [Jordan], and his name is Nick Jordan.
Daniel Satinsky: Ah.
Alexis Rodzianko: Nick is Boris’s older brother. He and I worked together for many years.
Daniel Satinsky: I see, I see. So, then it all happened, so the Soviet Union is dissolved, and Yeltsin is president. Where were you in that process? What were you doing around that time?
Alexis Rodzianko: Well, I was in charge of emerging markets debt trading globally, and [it also] was kind of a pet project for me because that’s where my background was. And as I said, I was expecting to see this movie play out, and here I was watching that movie play out. And the debt went from being worth 100 cents on the dollar to being worth 20 cents on the dollar. And at some point, you decide where is the bottom, where do you start speculating, where do you start doing transactions.
And I was doing that along with Nick. Nick was the specialist on Russia. I had broader responsibilities for the world. But I would travel to Russia maybe twice a year, and he would travel once a month. And we were looking at what to do. And we did some very interesting transactions where the sovereign debt was worth maybe 20 cents on the dollar. And then there was a shipping company that was doing business globally, and we found a way for them to repay their debt to VTB* by buying VTB’s debt at a discount and cancelling it in part, so they made a big gain.
Daniel Satinsky: Wow. Which one of the shipping companies was that?
Alexis Rodzianko: It was called Sovcomflot, and it was a transaction that Nick and I worked on together.
Daniel Satinsky: Okay. And—yeah, go ahead.
Alexis Rodzianko: So, that was it. And then I remember sitting in my office and doing calculations that essentially said that oil reserves in Russia were priced at three cents per barrel, which even at those low prices for oil at that time was ridiculously cheap. And then they came up with their privatization program, which was what they were going to do is take 20% of all the companies in Russia that had been part of ministries, and they were going to turn them into joint stock companies. Twenty percent of their stock would just be handed out to every man, woman and child in Russia in the form of vouchers. These vouchers could then be exchanged for a total value of 20% of all of the stock to be issued.
And actually, it was a pretty good deal, but a lot of people didn’t realize what they had, didn’t know the first thing about companies, stocks, whether stocks would ever be worth anything in Russia or whether they wouldn’t, so there were all sorts of people buying up vouchers for cases of vodka, you know, that kind of story.
And I remember going to my bosses and saying look, these vouchers here, you can get them for this much. That means 20% of all of Russia, which today is worth $20 billion, which is nothing. It’s got to be worth more eventually. And you can buy 20% of it for like $200 million, so it’s crazy not to do it just as a speculative matter. And we got as far as sending a delegation to Russia to examine these vouchers. And then the decision was we couldn’t trust the settlement process, so we couldn’t do it, because it was paper, and you didn’t know if the paper was real, and what’s the system for checking these vouchers for whether they’re real vouchers or printed vouchers, so ultimately, we didn’t do it. A lot of people did and ended up making fortunes. But we missed that boat. And maybe it’s just as well. But we did do well and made money trading the Russian debt.
Well, eventually, as things happen in banks, there were reorganizations, and the Fed came in and said you can’t do this and this together, you have to separate it out. In the process I was basically replaced in my job and offered a chance to go to London as an investment banker covering Eastern Europe. And at the same time, I got an offer to join a startup investment bank in Moscow. This was 1995. And that’s where the call of the background came in because the job in London was a real job. The job in Moscow was a toss of the dice. But I figured look, I better toss the dice because if I don’t I’ll always think about “what if.”
Daniel Satinsky: What if, right.
Alexis Rodzianko: And okay, so I’ll toss the dice, and probably six months from now I’ll be back looking for a job, and I can probably find a job, so let me do it. And that was 30 years ago now.
Daniel Satinsky: Wow. What was the…who did you go to work with in ’95?
Alexis Rodzianko: There was a fellow called Hans-Jorg Rudloff, who had been a bond king at Credit Suisse, and he set up a series of Eastern European banking startups, and he put me in charge of the Russian startup.
Daniel Satinsky: And the name of it was?
Alexis Rodzianko: The name of it was United City Bank, and the foreign entity was called MC Securities. It was a small brokerage, and it was supposed to—part of the story is this funny story because he said $20 million of capital, and you can set up this business. And for me, I looked at the big picture, and $20 million at that time in Russia was a lot of money, so I thought that’s great. So, I signed up, and I agreed. I got there and looked at the accounts and there was like 2 million dollars there. So, I said hey, Hans-Jorg, where’s the other $18? And that was a big… And I spent like three months arguing and threatening to leave and everything. And that eventually got up to $10, but $10 was enough to make it work, and we became like the No. 5 broker in Russia within a year.
But then in that year my ex-competitor...part of what I did was in New York I was part of the Emerging Markets Traders Association (EMTA), which was a group that was a self-governing body for this Wild West market that grew up out of the failed debt of Latin America and Eastern Europe and the Philippines. And the heads of all the businesses kind of went—we were told by the Fed you guys organize yourself or we’ll organize you, and you’re not going to like it. So, we did that.
And the head of JP Morgan—I was then head of what was Manny Hanny and then Chemical Bank, so I was head in Chemical Bank. Nick Rohatyn was heading up JP Morgan. And he and I got along pretty well. So, I left for Moscow, and he comes to Moscow, and he calls me up, and he goes, hey, we’re going to open a bank here, would you like to join us? And I thought about the two million that turned into $10 million that never quite got to $20 million, and here’s JP saying we’re putting in $50, which I can believe much more readily. So, I said yeah, I’ll do that. So, I ended up at JP Morgan in 1997.
Daniel Satinsky: How long were you at the other startup?
Alexis Rodzianko: I was at the other startup for about a year and a half.
Daniel Satinsky: About a year and a half. Before you go on, it seems to me you were, you know, Peter Derby had started Dialog Joint Venture and then Dialog Bank and Troika Dialog, and Boris Jordan was starting up Renaissance Capital, so there was a whole group of you who probably knew each other and had the same White Russian background who were very important in this financial market that developed in post-Soviet Russia. Am I…?
Alexis Rodzianko: Well, you’re right. I did know both of them. I met with Peter quite a few times. I worked with Boris’s brother. We knew each other, and I knew Boris as well. I mean, there are different—as they say in business, everyone is a bank, but every bank has its own personality, and its own approach, and its own strategy. And there’s probably no two people more different than Peter Derby and Boris Jordan.
Daniel Satinsky: Okay.
Alexis Rodzianko: Peter was a…he was like a missionary. Peter believed that he would, through his forthright approach, would put Russia on the path to salvation, and he was going to be a straight arrow. And he was. I admire that. I found him a little bit like too messianic, if that… But I always liked him, and I respect Peter quite a bit. I think he was… And he was kind of a half generation younger than me. Boris was probably 15 years younger than me. So, I came in as a 40-something-year-old banker and they were 20-something startup guys, so it was a little bit of a generational difference. And for me Boris was more of a cowboy. He was there to take advantage of every possible innuendo that he could take advantage of. He was going to play the game the way the Russians played the game.
Daniel Satinsky: Okay, yeah.
Alexis Rodzianko: And I grew up in banks. I had all sorts of compliance people all over me, and the Fed and everybody, so I had a different approach to things. And I remember sitting there thinking, even in that first bank, that trying to become the owner of a company is a big mistake because that’s politics, and if you’re… Yeah, it would be great to speculate but just don’t ever touch the point where you become a political enemy. And so, I was more of a portfolio player, I guess, in a sense, than I was… And I tried to stay away from Russia’s pretty bloody politics. It was pretty frightening stuff.
Now Peter was setting up a very, very specific kind of business, but even he eventually was forced out of it. He was forced to sell. His forced sale turned out to be the biggest break in his life, I think. But it was a forced sale. It was not something that he wanted to do, it was something he had to do.
And I never got into the position of being an equity holder to the point of where I owned a business. I was more of a hired gun in a very regulated environment. So, it was different approaches, different styles, I guess.
Daniel Satinsky: Yeah. And so when you left the startup bank and went to JP Morgan was there sort of bad blood from that or was that…?
Alexis Rodzianko: No, not really. The owner of the business wanted to run it themselves, and it was an agreeable departure in any case.
I never had anything against them, and they never held anything against me. Now JP was interesting because we set up the business and I joined in early ’97. Middle of ’98 we actually moved the trading team that I’d built from London to Moscow, and within three weeks the big crisis hit, you know, the place—
Daniel Satinsky: Right, the fall.
Alexis Rodzianko: —that whole thing went up in smoke. Now I can’t say we didn’t lose money. We did lose some money, but on a relative basis it was pennies compared to the rest of the Street, which lost billions, and they lost their jobs. And I didn’t lose my job, and they even paid me a bonus that year.
Daniel Satinsky: Wow. Okay.
Alexis Rodzianko: And then the next year, because we had done pretty well getting out of the way, we still had ability, and we made all the money back and more within a year. Within two years JP Morgan was sold to Chase. Now I had grown up in Chase. I was there. When I left, I didn’t take the job in London, and that was a Chase job. And all the same people were there, and they knew me, they knew I went to JP, so I was kind of in the doghouse. But instead of letting me go they kept me there and put me in an operating position rather than a line position. I spent another year restructuring, because it was… And Chase ended up with three banking licenses in Moscow, and needed to get it down to one, so my job that year was reducing the three to one, which is what I did.
Daniel Satinsky: Can I go back to ’98 a little bit? Is it that you didn’t lose so much money because you were new to the market or that you saw something happening and protected yourself? Which was it?
Alexis Rodzianko: I saw something happening in October of ’97. There was a big Thailand currency crisis. And that was kind of the first heart attack. And I remember the rest of the time, from then on, I was dealing in Russian local currency bonds. But I remember that that year we were either flat or short, flat or short that whole time and made quite a bit of money into the early summer. And then in the early summer the IMF announced a program, and so we sat there and go okay, IMF program, it’s like $5 billion, that’s good for about six months, so for the next two let’s take a position because everyone’s going to think the world is sunshine again.
So, we take this position, we held that for a month. It was very, very volatile, so it was up and down, up and down. At the end of the month, it was at exactly the same place that we bought it pricewise, and we had made a whole bunch of money on carry because the interest rates were up around 80%. And then over Friday to Monday we flew from London, and we ended up Monday morning in Moscow. It was August the 3rd, and we’re having a morning meeting, and I remember at this morning meeting saying you know, this just doesn’t feel right, this IMF program, its gears aren’t catching. We had about $200 million of Russian debt—
Daniel Satinsky: The GKOs*?
Alexis Rodzianko: GKOs and OFZs*. And I said let’s get out. And we tried to, but the liquidity was very limited. But we got out everything except like $40 million. And the $40 million was written down to close to zero, so we ended up losing $40 million. But compared to people like Credit Suisse and ING and even Chase, they’d lost hundreds of millions or billions, and here we were with $40 million, a manageable issue. That was basically, the meeting I had that year was like hey, we don’t usually pay money for losing, but you did relatively better, so here’s $50,000. But it was…I felt like it was a bit of a reward. And you get to keep your job, and you get to keep playing in this market.
Daniel Satinsky: Right. So, you believed in the market itself even after the crash, that there would be opportunities there?
Alexis Rodzianko: Well, I, I mean, yeah, I always felt that. Russia is a very, very wealthy place. The potential of this place is enormous. It’s gigantic. And my theory was if Russia does a little bit right, they make a little correct move, it’ll have enormous wealth creation impact. If they do everything right, they’ll be another United States. But they’re not going to do everything right. They’re going to do a few things right. And even a few things right is enough to generate value. And that was my approach to Russia since I’ve been here.
Daniel Satinsky: Yeah, okay. And at that point you were specializing only in government debt, or were you also speculating in shares of companies?
Alexis Rodzianko: Well, in my days at the broker it was shares, so I had experience trading in the local shares. But at JP Morgan it was the debt. It was two kinds of debt. It was the debt in dollars and the debt in local currency, both of them.
Daniel Satinsky: Okay. So, moving forward then in Chase, you managed this consolidation of the bank licenses into a single bank. Was it a Chase branded bank that you consolidated into?
Alexis Rodzianko: It’s interesting. The investment bank is branded JP Morgan, the commercial bank is branded Chase, so we ended up with the JP Morgan name because we were doing more investment banking.
Daniel Satinsky: I see. Okay. And so, you weren’t involved with the active lending at that point.
Alexis Rodzianko: And I was kind of, you know, in the—not the doghouse—but there was just no real plan for Russia at JP Morgan. They had no ambition here. They were basically keeping an option open, minimum activity, minimum involvement. And then I got an offer to join Deutsche and moved over to Deutsche Bank. Which had a lot more interest in what was going on in Russia.
Daniel Satinsky: Sure. What year was that that you moved to Deutsche Bank?
Alexis Rodzianko: That was 2001. I remember actually making a decision. It was shortly after 9/11. I mean, I was at JP Morgan at 9/11 at a conference, and I left, and my son called me up and said a plane just crashed into one of the towers. And while we were on the phone he goes oh no, another one.
Daniel Satinsky: Wow. Where were you? Where physically were you?
Alexis Rodzianko: In Moscow. At a hotel where there was an investment conference.
Daniel Satinsky: Okay. I was in St. Petersburg and watched it on TV in a bar at the hotel. Astounding day it was. Astounding.
Alexis Rodzianko: Yeah. One of those days where you know exactly where you were.
Daniel Satinsky: Yeah, absolutely. And so how did that impact how you saw yourself and your career and so on?
Alexis Rodzianko: At Deutsche Bank there was a lot more activity with Russia, so it was a much more interesting few years. And the ambitions were quite significant. The Germans, at that point, they were thinking and starting to build this pipeline. The Nord Stream pipeline was an idea. It was, by the way, a German idea that they presented to the Russians.
Daniel Satinsky: Really?
Alexis Rodzianko: Yes. I was there. I was at the meeting.
Daniel Satinsky: That’s interesting. That doesn’t often get presented that way. So, Deutsche Bank put together the collaboration to build that?
Alexis Rodzianko: Deutsche Bank had a big relationship with Gasprom, and one of my colleagues from Frankfort called me up and said look, I’m coming in, we’re going to go see Gasprom together. So, we walk into Gasprom, we’re sitting with the CFO, and the message from my German colleague was look, we want you to build this pipeline. We don’t want it to touch any other borders. We want it to come straight from your country to our country. And we will give you any amount of money at low interest rates, but you have to build this pipeline. That was Nord Stream I.
Daniel Satinsky: Wow. You know, it’s always, always portrayed as Russia trying to get around Ukraine, and that it was built for that purpose, to close the Ukraine connection.
Alexis Rodzianko: I don’t think the Russians looked at it that way. I think they saw it as a diversification.
Daniel Satinsky: Yeah, okay.
Alexis Rodzianko: I don’t think they had any intention of cutting out Ukraine.
Daniel Satinsky: Right.
Alexis Rodzianko: But the Germans, I think it was right around that time when there were first hints of trouble between—like they were arguing about how much the money was for [doing] the transit.
Daniel Satinsky: Yes. Yeah, those were very contentious contract negotiations over those transit fees, yes.
Alexis Rodzianko: And the Germans didn’t want to be held hostage to that, and they said build a pipeline direct to us. And, I mean, maybe there were other meetings where the Russians suggested it, but I was at the one where the Germans suggested it.
Daniel Satinsky: Okay. Wow. And the Russians then accepted that proposal and—
Alexis Rodzianko: Yeah, I mean, that started off the Nord Stream I which was built successfully. And it was built over the objections of the U.S., because even then—I mean, the U.S. even objected to the pipeline through Poland, in fact the Druzhba. They were saying you can’t do this, don’t do this. And basically, back then, the Europeans said no-no, we’re going to do this or there won’t be any NATO. That’s the story I heard.
Daniel Satinsky: Okay.
Alexis Rodzianko: And so yeah, so for me that whole story with the pipeline being blown up, and for me, you know, the reaction of Chancellor Scholz to the explosion of the pipeline, because most likely it was the U.S. that blew it up. And for me it was they blew up a German critical infrastructure. Certainly, the ownership was 50-50, even if the idea initially was German, which was not generally acknowledged. But for me the reaction of Scholz reminded me of—you’re old enough to remember “Hogan’s Heroes,” right?
Daniel Satinsky: Right.
Alexis Rodzianko: It reminded me of Sergeant Schultz. And I remember thinking, so this guy Chancellor Scholz, who in my mind is now Sergeant Schultz, and when they ask him do you know who blew up the pipeline—no, I know nothing. Do you want to know who blew up the pipeline? No, I don’t want to know. [Laughs.]
Daniel Satinsky: Fantastic. Yeah. So, wow. And so, were you active in part of the financial agreements to finance that pipeline?
Alexis Rodzianko: Not really. I mean, that was handled out of Frankfort.
Daniel Satinsky: Oh, okay.
Alexis Rodzianko: I was running the local operations, so I had very little to do with it, other than that initial meeting.
Daniel Satinsky: Wow. Okay. Were there other projects you remember from that time that are memorable?
Alexis Rodzianko: I’d have to go back to my JP Morgan days and the ’98 crisis, and the restructuring of Russia’s debt, because when that happened, I got a phone call from a fellow called Charlie Ryan, who you might know, and if you don’t, you should really—
Daniel Satinsky: Yeah, I know who he is, yeah.
Alexis Rodzianko: So, Charlie calls me up and he goes my partner Boris Fyodorov has just been appointed economy minister, and he wants to talk to you, JP Morgan, and he wants to talk to Deutsche Bank. And that was the formation of what’s known as the London Club, or basically the group that does the restructuring of defaulted sovereign debt. And so I was part of the initial series of meetings with the Russian government on the restructuring of the debt, and even participated in the early committee meetings, where Mikhail Kasyanov was the leader, and his sidekick was [Andrey] Kostin. Kasyanov’s kind of off the stage now. He was prime minister for a short time under Putin, and then he was basically moved aside, but Kostin is still the head of VTB.
Daniel Satinsky: Ah, okay. So, they were the team for restructuring on the Russian side.
Alexis Rodzianko: They were the team that was negotiating with the London banks, yeah, on the debt. And we came up with ideas, and eventually the bonds that restructured the Russian debt come out of that process. And a lot of the thinking was by a very bright young man who was working at JP Morgan at the time. Not me.
Daniel Satinsky: Not you, all right. But you were part of that team that was putting that together.
Alexis Rodzianko: I was part of that team, yeah.
Daniel Satinsky: Yeah. Wow. So, you have some seminal moments in post-Soviet history, Russian history, with ’98 and of course with the pipeline.
Alexis Rodzianko: There’s probably one other notable meeting that I remember. This was like late 1998 [sic 1999]. The crisis had happened. Things were starting to level out a little bit. Primakov was the prime minister. He’d come up with a program that made sense, that seemed to be catching on. One of my colleagues, a fellow called [Bill] Wilson, he was running a consortium bank, I think it was for AIG, the insurance group. He would come and we would chat.
Now his interesting history is that he’s got a super Anglo last name, but in his bloodline was Field Marshal Suvorov. Now Field Marshal Suvorov was Russia’s main man, the absolute military hero of the Russian empire. And as a result, Wilson was in with the military crowd. They liked him. And he would come and tell me stories. And this is like October of ’98. And he goes, look, they’re getting ready to have a coup. They think Russia’s going down the wrong path and the brown shirts are getting together, and they’re going to depose Yeltsin.
And sure enough, in three months Yeltsin gets on and he goes I’m sorry, things didn’t turn out the way I wanted them to, and here’s the young man who’s going to take over as temporary president, and he points to Vladimir Putin. And that’s when Putin’s era begins. And I remember it was done so smoothly that I remember commenting this is like the most well-orchestrated, smoothly executed coup d’etat that’s ever happened. The military took over. And if you look back from today, the vector of Russia’s development from that point changed enormously.
Daniel Satinsky: Right. But you felt that at the time.
Alexis Rodzianko: I didn’t feel much at the time, but I remember that I had just…that comment from Wilson really struck home, that they’re getting serious about their future.
Daniel Satinsky: Yeah. Well, you know, since we’re talking about some things that are not generally talked about, let’s say, I want to ask you something which we may want to cut out of this tape, or you may not want to comment on. But I have read in different places references to that the KGB had large financial resources at the time of the collapse of the Soviet Union which they recycled through some of the emerging financial organizations that came out later, and that these funds sort of were, if you will, washed through the former Komsomol young people who were involved with financial organizations in the early days. Does that make any sense to you?
Alexis Rodzianko: You know, it makes sense in the sense of that is who [Mikhail] Khodorkovsky is, that is who [Vladimir] Potanin is, that is who all these oligarchs are. But then they, in turn, were basically curbed by Putin. And when Putin came in, he replaced them one by one, or he basically did a deal with them: you stay out of politics and you can keep your money, or you get involved in politics, here’s an example, Khodorkovsky is your example. And from that point the main industries, oil and gas, began to be concentrated in a national company, the national champion company, and the people running it are not the owners of it. They might have some shares, but they are beholden to the boss.
Daniel Satinsky: So, you’re talking Rosneft.
Alexis Rodzianko: Yeah, that’s the classic one, and Gasprom is another one where the ownership was replaced, and the shareholding was moved accordingly. And so then you went from a group of owners, these young Komsomol guys who were kind of handpicked to take over these big areas of the economy and run private companies, and then they became public companies in the sense of owned by the public, though not owned by the public in the way a U.S. public company is, but owned by the public in the sense of the government, controlled by the government. And their managements became beholden to the political boss. So, it changed the dynamic quite a bit.
Daniel Satinsky: Yeah. So, in a sense that whole early history that’s in the shadows may actually have played itself out in a process which resulted in where we are today.
Alexis Rodzianko: Yeah. That’s not to say there’s no private industry; there is. And there are companies that are created from basically new opportunities, the big, like a company like Yandex. All the mobile phone operators which are the major companies in Russia, they were created, and their ownership is still in private hands. But the big kind of, it’s called, the high ground.
Daniel Satinsky: Yeah, the commanding heights.
Alexis Rodzianko: The commanding heights of industry is pretty much back in the government’s hands.
Daniel Satinsky: Well, let me turn back to your career. So, how long were you at Deutsche Bank?
Alexis Rodzianko: For five years. Deutsche bought UFG, which was Charlie Ryan’s company. And so Deutsche has a system where there’s one German and one American, and so they couldn’t have two Americans, so Charlie took my job, and I left Deutsche. At that point I joined Credit Suisse and opened up their onshore private banking, which was also interesting. And that one was four years, and that was a little harder. And then I thought I was headed home, but I got invited to work in a small Russian investment bank, which I did for another two years.
Daniel Satinsky: What was the name of that bank?
Alexis Rodzianko: It was called Metropol. You know, small Russian investment banks have no future. They have to be a very specific type. And then I stayed on because I had horses here and I was running a polo club.
Daniel Satinsky: Oh, wow. What years were you at Credit Suisse and then at this investment bank?
Alexis Rodzianko: So, I joined Deutsche Bank in late 2001 and I left in late 2006. I joined Credit Suisse in mid 2006 and left there in 2011, early 2011. And then I was at Metropol in 2011-12. And then, in 2013, I was trying to figure out whether to sell the horses or sell the club or keep it going for a while. And then I got a call from a headhunter who said hey, Alexis, there’s this job of being director of the American Chamber of Commerce, we think you’d be the right guy for that job. And I remember thinking wow, the relationship with the U.S. is really pretty crappy, but what an interesting job.
Daniel Satinsky: Yeah, yeah.
Alexis Rodzianko: And I said sure, I’ll try out for it. And they hired me. And I did that for the next eight years.
Daniel Satinsky: Wow.
Alexis Rodzianko: Literally until December of ’21. And the way that ended was in 2019—they did it in three-year contracts, so my second three-year contract was up. And I talked to the chairman, and I said look, I don’t really want to stay past 70 years old, but why don’t you give me another three-year extension but just keep in mind that I’m leaving after two. So, that’s what they did. And then I helped in the search for my successor, who’s a good friend. His name is Bob Agee; someone I recommend you talk to. He’s been here forever. He grew up in California. He’s from a White Russian family as well.
Daniel Satinsky: Oh, okay. I didn’t realize that. Yes, okay.
Alexis Rodzianko: And that happened in December of ’21, and literally February of ’22 the proverbial shit hit the fan.
Daniel Satinsky: Yeah, yeah, yeah. You missed that.
Alexis Rodzianko: Well, I didn’t miss it because I’m still here, and I still have my polo club. And part of my stint was I was a director of a Russian bank as an independent director for what turned out to be 13 years. I had to leave it last year when that bank was put on the sanctions list.
Daniel Satinsky: I see, okay. And so, tell me a little bit about the polo club. When did that start, and how, and who’s involved? Is that with Russians or expats?
Alexis Rodzianko: Well, like many things in Russia it started with expats and now it’s all Russians. And it started in 2003, and it wasn’t started by me. It was started by a fellow called Victor Huaco. Victor was a Peruvian who was educated in the U.S., became a banker at Citibank, and in 1993 he left Citi and went to Russia to work in the fledgling banking sector.
And back in 2003, it must have been, yeah, very early 2003 he calls me up and he goes hey, Alexis, I’m opening a polo club, we’re looking for sponsors, would Deutsche Bank consider sponsoring? And so, I looked into it, and Deutsche Bank, it turns out, sponsors horse sports, including polo, and so we were one of the sponsors for an opening event. And they had about 25 horses, some Argentine trainers, and opened the club. And I signed up with two of my sons, the two younger sons, and my youngest daughter, who were the three kids who were still living at home at that time. And so we ended up being kind of half the initial membership of the club.
Daniel Satinsky: You were the riders riding and playing the game?
Alexis Rodzianko: Yeah, learning to ride, learning to play.
Daniel Satinsky: Okay.
Alexis Rodzianko: And then two years later—Victor had done this with a sponsor, a financial sponsor, a Russian oligarch, and the Russian oligarch, I guess, had different ideas of what the business plan might end up looking like. The joke about polo is how do you become a millionaire? And the answer is start with a billion and you play polo.
Daniel Satinsky: [Laughs.] Okay.
Alexis Rodzianko: So, this billionaire didn’t like the financial direction of this thing. He wasn’t involved himself. And so, he calls me up and he goes I’m breaking up with Victor, please buy these horses from me. And I ended up being the owner of the polo club at the end of 2005. And ever since then I’ve been running it. Now my son is running it and I’m kind of the non-executive chairman.
And interestingly, as I said, it started out it was mostly expats playing, and now it’s all Russians. And there were two big steps forward that the club took, and one of them was COVID, because people needed an outlet, and here we were. We were outdoors; we were not—
Daniel Satinsky: You were outdoors, yeah.
Alexis Rodzianko: And the second one was, oddly enough, the war. Because now Russians pretty much stay closer to home, and particularly Russians with money.
Daniel Satinsky: And is it a place where… It’s sort of like golf and country clubs are places where people mix and business deals get done or discussed, or the mixture of social and business life, is polo like that?
Alexis Rodzianko: Very much like that. The events attract a well-dressed crowd and there’s a lot of social interaction. And the game is the focus of that group getting together. And our location—you can actually, if you Google it, you’ll find a lot of pictures. It’s Moscow Polo Club, no spaces, dot com, and you’ll see a site, you’ll see a lot of photos. And usually they post photos of recent events.
Daniel Satinsky: So, back in the earlier days were you also involved with the Moscow Country Club?
Alexis Rodzianko: I was a member for a short time, but I’ve never been a big golfer, so I bought a membership and sold it back two years later.
Daniel Satinsky: Ah, okay. You’re a rider, but not a golfer.
Alexis Rodzianko: Not a golfer.
Daniel Satinsky: Okay. And it wasn’t important for business reasons to be part of that, the country club?
Alexis Rodzianko: Well, I mean, that’s why I joined in the first instance, but… And we would rent the place. We would have meetings there. I would go to golf events where I’d putt around. But I’ve never gotten really involved in playing golf. I mean, it was…it is more and more so now. I mean, Russia’s golf scene has developed and grown quite a bit. And I think the same two events that gave a push to polo also gave a push to golf in Russia.
Daniel Satinsky: Okay, yeah. And did you…were you part of AmCham before you became the president?
Alexis Rodzianko: I was. I was a member of AmCham as JP Morgan, I was a member of AmCham as Deutsche Bank.
Daniel Satinsky: Okay. So, when did you join, roughly, AmCham?
Alexis Rodzianko: It must have been like 1998. And it was formed in ’94, I think.
Alexis Rodzianko: I saw something happening in October of ’97. There was a big Thailand currency crisis. And that was kind of the first heart attack. And I remember the rest of the time, from then on, I was dealing in Russian local currency bonds. But I remember that that year we were either flat or short, flat or short that whole time and made quite a bit of money into the early summer. And then in the early summer the IMF announced a program, and so we sat there and go okay, IMF program, it’s like $5 billion, that’s good for about six months, so for the next two let’s take a position because everyone’s going to think the world is sunshine again.
So, we take this position, we held that for a month. It was very, very volatile, so it was up and down, up and down. At the end of the month, it was at exactly the same place that we bought it pricewise, and we had made a whole bunch of money on carry because the interest rates were up around 80%. And then over Friday to Monday we flew from London, and we ended up Monday morning in Moscow. It was August the 3rd, and we’re having a morning meeting, and I remember at this morning meeting saying you know, this just doesn’t feel right, this IMF program, its gears aren’t catching. We had about $200 million of Russian debt—
Daniel Satinsky: The GKOs*?
Alexis Rodzianko: GKOs and OFZs*. And I said let’s get out. And we tried to, but the liquidity was very limited. But we got out everything except like $40 million. And the $40 million was written down to close to zero, so we ended up losing $40 million. But compared to people like Credit Suisse and ING and even Chase, they’d lost hundreds of millions or billions, and here we were with $40 million, a manageable issue. That was basically, the meeting I had that year was like hey, we don’t usually pay money for losing, but you did relatively better, so here’s $50,000. But it was…I felt like it was a bit of a reward. And you get to keep your job, and you get to keep playing in this market.
Daniel Satinsky: Right. So, you believed in the market itself even after the crash, that there would be opportunities there?
Alexis Rodzianko: Well, I, I mean, yeah, I always felt that. Russia is a very, very wealthy place. The potential of this place is enormous. It’s gigantic. And my theory was if Russia does a little bit right, they make a little correct move, it’ll have enormous wealth creation impact. If they do everything right, they’ll be another United States. But they’re not going to do everything right. They’re going to do a few things right. And even a few things right is enough to generate value. And that was my approach to Russia since I’ve been here.
Daniel Satinsky: Yeah, okay. And at that point you were specializing only in government debt, or were you also speculating in shares of companies?
Alexis Rodzianko: Well, in my days at the broker it was shares, so I had experience trading in the local shares. But at JP Morgan it was the debt. It was two kinds of debt. It was the debt in dollars and the debt in local currency, both of them.
Daniel Satinsky: Okay. So, moving forward then in Chase, you managed this consolidation of the bank licenses into a single bank. Was it a Chase branded bank that you consolidated into?
Alexis Rodzianko: It’s interesting. The investment bank is branded JP Morgan, the commercial bank is branded Chase, so we ended up with the JP Morgan name because we were doing more investment banking.
Daniel Satinsky: I see. Okay. And so, you weren’t involved with the active lending at that point.
Alexis Rodzianko: And I was kind of, you know, in the—not the doghouse—but there was just no real plan for Russia at JP Morgan. They had no ambition here. They were basically keeping an option open, minimum activity, minimum involvement. And then I got an offer to join Deutsche and moved over to Deutsche Bank. Which had a lot more interest in what was going on in Russia.
Daniel Satinsky: Sure. What year was that that you moved to Deutsche Bank?
Alexis Rodzianko: That was 2001. I remember actually making a decision. It was shortly after 9/11. I mean, I was at JP Morgan at 9/11 at a conference, and I left, and my son called me up and said a plane just crashed into one of the towers. And while we were on the phone he goes oh no, another one.
Daniel Satinsky: Wow. Where were you? Where physically were you?
Alexis Rodzianko: In Moscow. At a hotel where there was an investment conference.
Daniel Satinsky: Okay. I was in St. Petersburg and watched it on TV in a bar at the hotel. Astounding day it was. Astounding.
Alexis Rodzianko: Yeah. One of those days where you know exactly where you were.
Daniel Satinsky: Yeah, absolutely. And so how did that impact how you saw yourself and your career and so on?
Alexis Rodzianko: At Deutsche Bank there was a lot more activity with Russia, so it was a much more interesting few years. And the ambitions were quite significant. The Germans, at that point, they were thinking and starting to build this pipeline. The Nord Stream pipeline was an idea. It was, by the way, a German idea that they presented to the Russians.
Daniel Satinsky: Really?
Alexis Rodzianko: Yes. I was there. I was at the meeting.
Daniel Satinsky: That’s interesting. That doesn’t often get presented that way. So, Deutsche Bank put together the collaboration to build that?
Alexis Rodzianko: Deutsche Bank had a big relationship with Gasprom, and one of my colleagues from Frankfort called me up and said look, I’m coming in, we’re going to go see Gasprom together. So, we walk into Gasprom, we’re sitting with the CFO, and the message from my German colleague was look, we want you to build this pipeline. We don’t want it to touch any other borders. We want it to come straight from your country to our country. And we will give you any amount of money at low interest rates, but you have to build this pipeline. That was Nord Stream I.
Daniel Satinsky: Wow. You know, it’s always, always portrayed as Russia trying to get around Ukraine, and that it was built for that purpose, to close the Ukraine connection.
Alexis Rodzianko: I don’t think the Russians looked at it that way. I think they saw it as a diversification.
Daniel Satinsky: Yeah, okay.
Alexis Rodzianko: I don’t think they had any intention of cutting out Ukraine.
Daniel Satinsky: Right.
Alexis Rodzianko: But the Germans, I think it was right around that time when there were first hints of trouble between—like they were arguing about how much the money was for [doing] the transit.
Daniel Satinsky: Yes. Yeah, those were very contentious contract negotiations over those transit fees, yes.
Alexis Rodzianko: And the Germans didn’t want to be held hostage to that, and they said build a pipeline direct to us. And, I mean, maybe there were other meetings where the Russians suggested it, but I was at the one where the Germans suggested it.
Daniel Satinsky: Okay. Wow. And the Russians then accepted that proposal and—
Alexis Rodzianko: Yeah, I mean, that started off the Nord Stream I which was built successfully. And it was built over the objections of the U.S., because even then—I mean, the U.S. even objected to the pipeline through Poland, in fact the Druzhba. They were saying you can’t do this, don’t do this. And basically, back then, the Europeans said no-no, we’re going to do this or there won’t be any NATO. That’s the story I heard.
Daniel Satinsky: Okay.
Alexis Rodzianko: And so yeah, so for me that whole story with the pipeline being blown up, and for me, you know, the reaction of Chancellor Scholz to the explosion of the pipeline, because most likely it was the U.S. that blew it up. And for me it was they blew up a German critical infrastructure. Certainly, the ownership was 50-50, even if the idea initially was German, which was not generally acknowledged. But for me the reaction of Scholz reminded me of—you’re old enough to remember “Hogan’s Heroes,” right?
Daniel Satinsky: Right.
Alexis Rodzianko: It reminded me of Sergeant Schultz. And I remember thinking, so this guy Chancellor Scholz, who in my mind is now Sergeant Schultz, and when they ask him do you know who blew up the pipeline—no, I know nothing. Do you want to know who blew up the pipeline? No, I don’t want to know. [Laughs.]
Daniel Satinsky: Fantastic. Yeah. So, wow. And so, were you active in part of the financial agreements to finance that pipeline?
Alexis Rodzianko: Not really. I mean, that was handled out of Frankfort.
Daniel Satinsky: Oh, okay.
Alexis Rodzianko: I was running the local operations, so I had very little to do with it, other than that initial meeting.
Daniel Satinsky: Wow. Okay. Were there other projects you remember from that time that are memorable?
Alexis Rodzianko: I’d have to go back to my JP Morgan days and the ’98 crisis, and the restructuring of Russia’s debt, because when that happened, I got a phone call from a fellow called Charlie Ryan, who you might know, and if you don’t, you should really—
Daniel Satinsky: Yeah, I know who he is, yeah.
Alexis Rodzianko: So, Charlie calls me up and he goes my partner Boris Fyodorov has just been appointed economy minister, and he wants to talk to you, JP Morgan, and he wants to talk to Deutsche Bank. And that was the formation of what’s known as the London Club, or basically the group that does the restructuring of defaulted sovereign debt. And so I was part of the initial series of meetings with the Russian government on the restructuring of the debt, and even participated in the early committee meetings, where Mikhail Kasyanov was the leader, and his sidekick was [Andrey] Kostin. Kasyanov’s kind of off the stage now. He was prime minister for a short time under Putin, and then he was basically moved aside, but Kostin is still the head of VTB.
Daniel Satinsky: Ah, okay. So, they were the team for restructuring on the Russian side.
Alexis Rodzianko: They were the team that was negotiating with the London banks, yeah, on the debt. And we came up with ideas, and eventually the bonds that restructured the Russian debt come out of that process. And a lot of the thinking was by a very bright young man who was working at JP Morgan at the time. Not me.
Daniel Satinsky: Not you, all right. But you were part of that team that was putting that together.
Alexis Rodzianko: I was part of that team, yeah.
Daniel Satinsky: Yeah. Wow. So, you have some seminal moments in post-Soviet history, Russian history, with ’98 and of course with the pipeline.
Alexis Rodzianko: There’s probably one other notable meeting that I remember. This was like late 1998 [sic 1999]. The crisis had happened. Things were starting to level out a little bit. Primakov was the prime minister. He’d come up with a program that made sense, that seemed to be catching on. One of my colleagues, a fellow called [Bill] Wilson, he was running a consortium bank, I think it was for AIG, the insurance group. He would come and we would chat.
Now his interesting history is that he’s got a super Anglo last name, but in his bloodline was Field Marshal Suvorov. Now Field Marshal Suvorov was Russia’s main man, the absolute military hero of the Russian empire. And as a result, Wilson was in with the military crowd. They liked him. And he would come and tell me stories. And this is like October of ’98. And he goes, look, they’re getting ready to have a coup. They think Russia’s going down the wrong path and the brown shirts are getting together, and they’re going to depose Yeltsin.
And sure enough, in three months Yeltsin gets on and he goes I’m sorry, things didn’t turn out the way I wanted them to, and here’s the young man who’s going to take over as temporary president, and he points to Vladimir Putin. And that’s when Putin’s era begins. And I remember it was done so smoothly that I remember commenting this is like the most well-orchestrated, smoothly executed coup d’etat that’s ever happened. The military took over. And if you look back from today, the vector of Russia’s development from that point changed enormously.
Daniel Satinsky: Right. But you felt that at the time.
Alexis Rodzianko: I didn’t feel much at the time, but I remember that I had just…that comment from Wilson really struck home, that they’re getting serious about their future.
Daniel Satinsky: Yeah. Well, you know, since we’re talking about some things that are not generally talked about, let’s say, I want to ask you something which we may want to cut out of this tape, or you may not want to comment on. But I have read in different places references to that the KGB had large financial resources at the time of the collapse of the Soviet Union which they recycled through some of the emerging financial organizations that came out later, and that these funds sort of were, if you will, washed through the former Komsomol young people who were involved with financial organizations in the early days. Does that make any sense to you?
Alexis Rodzianko: You know, it makes sense in the sense of that is who [Mikhail] Khodorkovsky is, that is who [Vladimir] Potanin is, that is who all these oligarchs are. But then they, in turn, were basically curbed by Putin. And when Putin came in, he replaced them one by one, or he basically did a deal with them: you stay out of politics and you can keep your money, or you get involved in politics, here’s an example, Khodorkovsky is your example. And from that point the main industries, oil and gas, began to be concentrated in a national company, the national champion company, and the people running it are not the owners of it. They might have some shares, but they are beholden to the boss.
Daniel Satinsky: So, you’re talking Rosneft.
Alexis Rodzianko: Yeah, that’s the classic one, and Gasprom is another one where the ownership was replaced, and the shareholding was moved accordingly. And so then you went from a group of owners, these young Komsomol guys who were kind of handpicked to take over these big areas of the economy and run private companies, and then they became public companies in the sense of owned by the public, though not owned by the public in the way a U.S. public company is, but owned by the public in the sense of the government, controlled by the government. And their managements became beholden to the political boss. So, it changed the dynamic quite a bit.
Daniel Satinsky: Yeah. So, in a sense that whole early history that’s in the shadows may actually have played itself out in a process which resulted in where we are today.
Alexis Rodzianko: Yeah. That’s not to say there’s no private industry; there is. And there are companies that are created from basically new opportunities, the big, like a company like Yandex. All the mobile phone operators which are the major companies in Russia, they were created, and their ownership is still in private hands. But the big kind of, it’s called, the high ground.
Daniel Satinsky: Yeah, the commanding heights.
Alexis Rodzianko: The commanding heights of industry is pretty much back in the government’s hands.
Daniel Satinsky: Well, let me turn back to your career. So, how long were you at Deutsche Bank?
Alexis Rodzianko: For five years. Deutsche bought UFG, which was Charlie Ryan’s company. And so Deutsche has a system where there’s one German and one American, and so they couldn’t have two Americans, so Charlie took my job, and I left Deutsche. At that point I joined Credit Suisse and opened up their onshore private banking, which was also interesting. And that one was four years, and that was a little harder. And then I thought I was headed home, but I got invited to work in a small Russian investment bank, which I did for another two years.
Daniel Satinsky: What was the name of that bank?
Alexis Rodzianko: It was called Metropol. You know, small Russian investment banks have no future. They have to be a very specific type. And then I stayed on because I had horses here and I was running a polo club.
Daniel Satinsky: Oh, wow. What years were you at Credit Suisse and then at this investment bank?
Alexis Rodzianko: So, I joined Deutsche Bank in late 2001 and I left in late 2006. I joined Credit Suisse in mid 2006 and left there in 2011, early 2011. And then I was at Metropol in 2011-12. And then, in 2013, I was trying to figure out whether to sell the horses or sell the club or keep it going for a while. And then I got a call from a headhunter who said hey, Alexis, there’s this job of being director of the American Chamber of Commerce, we think you’d be the right guy for that job. And I remember thinking wow, the relationship with the U.S. is really pretty crappy, but what an interesting job.
Daniel Satinsky: Yeah, yeah.
Alexis Rodzianko: And I said sure, I’ll try out for it. And they hired me. And I did that for the next eight years.
Daniel Satinsky: Wow.
Alexis Rodzianko: Literally until December of ’21. And the way that ended was in 2019—they did it in three-year contracts, so my second three-year contract was up. And I talked to the chairman, and I said look, I don’t really want to stay past 70 years old, but why don’t you give me another three-year extension but just keep in mind that I’m leaving after two. So, that’s what they did. And then I helped in the search for my successor, who’s a good friend. His name is Bob Agee; someone I recommend you talk to. He’s been here forever. He grew up in California. He’s from a White Russian family as well.
Daniel Satinsky: Oh, okay. I didn’t realize that. Yes, okay.
Alexis Rodzianko: And that happened in December of ’21, and literally February of ’22 the proverbial shit hit the fan.
Daniel Satinsky: Yeah, yeah, yeah. You missed that.
Alexis Rodzianko: Well, I didn’t miss it because I’m still here, and I still have my polo club. And part of my stint was I was a director of a Russian bank as an independent director for what turned out to be 13 years. I had to leave it last year when that bank was put on the sanctions list.
Daniel Satinsky: I see, okay. And so, tell me a little bit about the polo club. When did that start, and how, and who’s involved? Is that with Russians or expats?
Alexis Rodzianko: Well, like many things in Russia it started with expats and now it’s all Russians. And it started in 2003, and it wasn’t started by me. It was started by a fellow called Victor Huaco. Victor was a Peruvian who was educated in the U.S., became a banker at Citibank, and in 1993 he left Citi and went to Russia to work in the fledgling banking sector.
And back in 2003, it must have been, yeah, very early 2003 he calls me up and he goes hey, Alexis, I’m opening a polo club, we’re looking for sponsors, would Deutsche Bank consider sponsoring? And so, I looked into it, and Deutsche Bank, it turns out, sponsors horse sports, including polo, and so we were one of the sponsors for an opening event. And they had about 25 horses, some Argentine trainers, and opened the club. And I signed up with two of my sons, the two younger sons, and my youngest daughter, who were the three kids who were still living at home at that time. And so we ended up being kind of half the initial membership of the club.
Daniel Satinsky: You were the riders riding and playing the game?
Alexis Rodzianko: Yeah, learning to ride, learning to play.
Daniel Satinsky: Okay.
Alexis Rodzianko: And then two years later—Victor had done this with a sponsor, a financial sponsor, a Russian oligarch, and the Russian oligarch, I guess, had different ideas of what the business plan might end up looking like. The joke about polo is how do you become a millionaire? And the answer is start with a billion and you play polo.
Daniel Satinsky: [Laughs.] Okay.
Alexis Rodzianko: So, this billionaire didn’t like the financial direction of this thing. He wasn’t involved himself. And so, he calls me up and he goes I’m breaking up with Victor, please buy these horses from me. And I ended up being the owner of the polo club at the end of 2005. And ever since then I’ve been running it. Now my son is running it and I’m kind of the non-executive chairman.
And interestingly, as I said, it started out it was mostly expats playing, and now it’s all Russians. And there were two big steps forward that the club took, and one of them was COVID, because people needed an outlet, and here we were. We were outdoors; we were not—
Daniel Satinsky: You were outdoors, yeah.
Alexis Rodzianko: And the second one was, oddly enough, the war. Because now Russians pretty much stay closer to home, and particularly Russians with money.
Daniel Satinsky: And is it a place where… It’s sort of like golf and country clubs are places where people mix and business deals get done or discussed, or the mixture of social and business life, is polo like that?
Alexis Rodzianko: Very much like that. The events attract a well-dressed crowd and there’s a lot of social interaction. And the game is the focus of that group getting together. And our location—you can actually, if you Google it, you’ll find a lot of pictures. It’s Moscow Polo Club, no spaces, dot com, and you’ll see a site, you’ll see a lot of photos. And usually they post photos of recent events.
Daniel Satinsky: So, back in the earlier days were you also involved with the Moscow Country Club?
Alexis Rodzianko: I was a member for a short time, but I’ve never been a big golfer, so I bought a membership and sold it back two years later.
Daniel Satinsky: Ah, okay. You’re a rider, but not a golfer.
Alexis Rodzianko: Not a golfer.
Daniel Satinsky: Okay. And it wasn’t important for business reasons to be part of that, the country club?
Alexis Rodzianko: Well, I mean, that’s why I joined in the first instance, but… And we would rent the place. We would have meetings there. I would go to golf events where I’d putt around. But I’ve never gotten really involved in playing golf. I mean, it was…it is more and more so now. I mean, Russia’s golf scene has developed and grown quite a bit. And I think the same two events that gave a push to polo also gave a push to golf in Russia.
Daniel Satinsky: Okay, yeah. And did you…were you part of AmCham before you became the president?
Alexis Rodzianko: I was. I was a member of AmCham as JP Morgan, I was a member of AmCham as Deutsche Bank.
Daniel Satinsky: Okay. So, when did you join, roughly, AmCham?
Alexis Rodzianko: It must have been like 1998. And it was formed in ’94, I think.
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.
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.
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