About
About
Paul Ostling has deep experience with the development of the market economy in Russia as Global Executive Partner of Ernst & Young from 1995 to 2002 and Global Chief Operating Officer of Ernst & Young from 2003 to 2007. He subsequently served on the boards of directors of a number of leading Russian companies including Promsvyazbank, Kungur Oilfield Equipment and Services, Uralchem, Domodedovo East Line, Mobile Telesystems, Brunswick Rail Leasing and a number of other Russian and non-Russian companies.
He has served on the boards of a number of non-profit groups including the Business Council for International Understanding; Boy Scouts of America, Transatlantic Council; and the Dean’s Advisory Council, Fordham University School of Law.
He has served on the boards of a number of non-profit groups including the Business Council for International Understanding; Boy Scouts of America, Transatlantic Council; and the Dean’s Advisory Council, Fordham University School of Law.
Daniel Satinsky: Why don’t we start with how and when did you get involved with Russia, what got you involved?
Paul Ostling: I guess I have to say that the first thing you should understand is that I started at Arthur Young in 1977, and I was Associate General Counsel. And they hired me because I had been involved in a lot of, in just a few years at Chadbourne & Park I had been involved in a lot of special investigations, including the United brands investigation—sorry, United Fruit investigation where the guy, Black, jumped off the Pan Am building. And I came to the attention of Arthur Young, who were the auditors, and they asked me to come because they had a number of global, I’ll call them, “sensitive payment” reviews, and so I agreed to do it.
And throughout my career at Arthur Young and Ernst & Young, when there were major, I’ll say, investigations or forensic things, no matter what my job was, they asked me to be involved or run them, and so I was involved in going all around the world and doing these special investigations. This one that they hired me for [— JF Pritchard —] took me to Iran, Saudi, all around the world, and involved interfacing with the Justice Department, the SEC, the RCMP. And I later did the oil for food investigation, I did the EF Hutton review, I did the Swiss insurance and bank companies’ seizure of genocide victims [funds — seeking restitution], and I ran the part of it as well that distributed the [recovered] money to the heirs of those poor people. And so this kind of morphed my career into a global role.
And we did the merger between Arthur Young and Ernst & Whinney in 1989. I was involved in doing that deal, and kind of as a reward I became the vice chairman of the U.S. firm. And I requested of the chairman, [Phil Laskawy], I said I think my future should be global. And he hesitated, but I got involved, as a result of that request, in being one of the three or four U.S. partners working with three or four U.K. partners in starting all the practices in Eastern Europe, the CIS and Russia.
Daniel Satinsky: And when was that group formed?
Paul Ostling: 1990.
Daniel Satinsky: 1990, okay.
Paul Ostling: And we had one guy, Richard Lewis, who’s now passed. He was quite a character, a British tax guy, very esoteric and one-of-a-kind human being. And he actually, we set him up at that time in an apartment on Prospekt Mira*. And he was our first—he was Employee No. 001. And so I was involved. The U.S and U.K. firms financed it all. We formed something called Ernst & Young Eastern Europe that we used as a vehicle. It was an Isle of Man entity. All the wrong things. We did all the wrong things.
And we tried to find—because you needed have…the law at the time required that you had joint ventures, remember, so we found a joint venture with a, let’s call him, a consultant, using the term loosely. His name was Alex Rubtsov. And his greatest claim to fame, I think, was [allegedly] having an affair with—I shouldn’t say this—with Yeltsin’s daughter, Yelena. But he had access. And so he became a joint venture partner. This is a year or so down the road at the very beginning. And we found a guy named Oleg Valerius who we called an audit partner, but he wouldn’t know an audit from a beehive, because there were no such things. They had no reason to tax anybody because there was no income, right? So I got involved because I—
Daniel Satinsky: Can I stop you?
Paul Ostling: Yeah, go ahead.
Daniel Satinsky: One question. When you started this, who did you expect your customers to be? Who were your clients?
Paul Ostling: It was obvious at the time that we were dealing with our American Expresses and Mobil and people who were going there and would need services, because we were serving them in, at the time, I guess, in 1990, we had 140 countries, 700 offices. And so we were serving worldwide clients in the Philippines, and China, and trying to figure out how serve them in Vietnam or Libya as well, which were problems. And Russia became, and Poland, all these places, not just Russia, but all of them became places where we needed to serve our global client base. And that was the initial thought.
Daniel Satinsky: Okay, and so at that point you didn’t have any expertise in Russia as a country—
Paul Ostling: None.
Daniel Satinsky: —but you understood the needs of the global clients, so you were in some ways the blind leading the blind in the Russian territory.
Paul Ostling: And I had also had this unique experience in unfucking fucked up situations in Indonesia, where we had to decide whether our partner should go to jail or whatever, and in Turkey, where I was sent into these situations to try and figure out about fraud, not just our own people, but clients, where we needed to decide how do we deal with this terrible situation. [I did this in Brazil, Argentina, Italy, Vietnam, and later in Cuba even —] and that was kind of an outstanding primer, if you will, for just emerging markets, which this, of course, was.
And it was really because I raised my hand and I said I think the future is in globalization, and I’d like to, my next thing in the firm I’d like to be global. And so in 1993 they kind of formalized this for me and made me “global counsel”, and I actually started going to Russia. I can’t remember whether it was ’92 or ’93 that I first went. [I had been working on it from New York and London, but the operating issues on the ground required you go there and fix it.] And I first went because the general counsel and the CEO of Ernst & Young Global, a guy named Mike Henning, [a true saint and globalist], were very concerned about how the operation in Russia was being run. And because of my expertise in forensics, they said you go and you figure out what you guys did, how is it going. [Fix it!]
And I went and found out it wasn’t going so well. It wasn’t going so well in Czech Republic, it wasn’t going so well in Russia. And in a number of these situations the guys we sent had gone native, I’ll say, and began to do squarely things with locals [that contravened our policies.] In the Czech Republic we found out that the guy, the Brit, had gotten involved with one of the local, quote, “partners” in buying a property to lease it back to the firm, not something we tolerate. And I found even worse things in Russia. [Self-dealing, misuse of firm assets.]
And so, we—you know, I don’t want to mention his name—we replaced the managing partner. [And others. We could not replace the senior Russian.] We understood we needed to control Alex, because he didn’t know how to do a deal without a bribe. In Ernst & Young, when you go and you find a mess, and you’re in a position of responsibility, you’re then in charge, right? So, it was like okay, now you fix this thing, which is kind of the way it should be, right?
Daniel Satinsky: Yeah.
Paul Ostling: You found it, you fix it. So, for the next few years I spent most of my time in Russia, living in a place called Chaika. We had rented about a dozen, I’ll call them dachas, but some of them were old cottages. It was a Communist Party upper echelon area with metal walls and that kind of thing. [Some were the Nordic pre-fabs. Steel walls. Hummers with gun ports.]
Daniel Satinsky: Okay, so like a compound.
Paul Ostling: It was exactly a compound. But there were houses, and there was like a, I’m going to say, a central building that had facilities in it, and a number of the partners who were expats were living there, and I had a place there, shared it. And in 1994, with the EY CEO guy named Mike Henning, who I mentioned earlier, we decided that we should name a really pure person as the country managing partner, and we picked a guy named Karl Johansson, who had been a tax partner in the Minneapolis office. And because of the merger he didn’t get the job as office managing partner, and this was kind of a consolation prize. We didn’t understand how big it would become. But we asked him to move to Russia and assume the job of the guy who we let go. [Karl deserves the lion’s share of the credit for the success EY became in Russia. We owe him tremendously. And he was a hero for the Russians at EY. A true advocate.]
Daniel Satinsky: And so, what was important to you was not Russian knowledge or Russian language, it was integrity and knowledge of your firm’s procedures and your belief that the people would stick to them once they were in an environment that did everything to pull them in different directions. Is that fair?
Paul Ostling: Exactly. He was unimpeachable. He was uncorruptible—incorruptible. And we were right. And he was there on and off until, I don’t know, 2020, 2018. His name was Karl Johansson, and he was outstanding as a person who could be trusted. Very interesting character. And he moved there in 1994 or early ’95 and took over, which relieved me. [But we became very close friends for life. He was never far away from me as I ran EY.]
And throughout my career in EY, from the time I began until I left after 30 years in 2007, the CIS practice reported directly to me. I became the global executive partner in 1995. In 1997, with the newly named global CEO, [an amazing] guy named Bill Kimsey, we decided we needed to globally integrate Ernst & Young in order to ensure quality everywhere. You can’t do it unless you control the P&Ls. And we decided we couldn’t do that from the U.S., so we moved the global headquarters to London, and my family and I moved to London in 1997, and in 2003 I became the global COO as well. [Bill Kimsey was the most authentic leader I met in my life. I had great leaders in the Marine Corps, great leaders in 30 years at EY. But Bill Kimsey was a different breed. I owe my career and development to Bill Kimsey.]
And so from 1995 to 2007 the Russian practice of EY reported to me. And that meant that I was having to be there all the time because it wasn’t a place…it was like having a cash business in Brooklyn, not something you can totally delegate and forget about. There were always, always issues that you had to just get on a plane and go, and so I wound up spending more time going there than Singapore, for example.
Daniel Satinsky: Let me ask you about this a little more. So, your clients were multinationals to begin with who were going into Russia. And so when you talk about issues, those are issues that arose from what the multinationals were doing, what your staff was doing, what the Russian clients were doing? I’m not asking you to name names or anything, but could you describe what you mean by problems and where they arose?
Paul Ostling: Sure. So, you go because Columbus goes, and you set up a sail service place in the Dominican Republic for his boats, right? But pretty quickly you realize you have to find sails and wood and stuff, and you get involved in the local economy. And that’s what happened. We went there originally to serve—well, we got this huge project, Tengiz, Conoco, down in the Eurasian area, Kazakhstan. That was one of our earliest projects. We got two guys who were U.S. partners, Ben Miller and…oh, my god. I can see him, but I can’t remember his name. I’ll remember it and I’ll tell you. But we sent these, one from Dallas. One had been a former Andersen partner. Both oil and gas guys. And they spent their time between—Dean Ridenour—and they spent their time between Russia and Kazakhstan. Well, that meant we needed a place in Kazakhstan.
Well, a person a bit beyond our control had been hired by the original [managing partner] guy. Instead of finding flats, she rented a villa on a hill. It became a real estate issue. And it sounds like a minor thing, but everything you did entered you into the local economy and created issues. [It was the wild west in a wonderful way. But you would up inside people’s lives. These were adventurers. We had a guy go a little crazy in love. He wound up being robbed and murdered in his tub. That puts you in the press, with US officials, local police, the family. The side issues were endless. As a company bringing in expats, hiring young people — you become “pater familias”.]
So we moved, obviously, pretty quickly, as another example, from this apartment, and a few other places, by the way, to a building on Podsosensky Pereulok* in 1992, and we were renting the building. And actually, the other half of the building was Moscow University, a brand-new thing founded by two Russians [— a couple —] and Soros money. And we split the building with them. This couple “owned the building”, whatever that meant in 1992, and so one of the problems I had to straighten out first was what the hell is a lease of a building that nobody really owns in a [recently] communist country. And so you guys better invent some real estate law, you know? You guys better invent some tax law. So then I had to…then we decided we wanted to buy half of that building. So, then I had all these problems in like ’96, ’97 about how do you actually buy a building. Where’s the deed? Well, we don’t have deeds.
Daniel Satinsky: Yes, right, how do you do a title search.
Paul Ostling: Right. So those are just mundane examples of day-to-day operating things that are how you run a business. But then in 1998 we had the crisis. Well, that presented issues around what do you do with all these brilliant people who you hired, and you now have a crisis, and the revenue stream has changed.
So there was a crisis where Karl and I were taking these young Russians and sending them out to San Francisco, or Chicago, or London, and a lot of them never went back. A guy named Bobrow. He may still be a partner in San Francisco. So, they were bright people, they were thirsty to learn. They were amazing young people with no accounting background. So they came, we trained them. There was no such thing as an accountant in Russia, so we had to send them to London or the U.S. to get an accounting certification, because there was no professional standard.
So, all of these issues were how you have a place to work, how you get people, how you treat people. And also, on the client side, well, you know, we did—I think one of the first IPOs was Beeline, right, the phone company. I had to be involved with that, of course. Somebody had to make sure that that was really up to snuff. And so we quickly morphed from serving American Express and Conoco and the big giants—McDonald’s was a client. A lot of big companies were our clients. We morphed with them.
McDonald’s went to sell hamburgers. Well, eventually they figured out we better make the buns here, right? And so that creates an entire supply chain. And eventually some local dude owns a bun factory, right? And so the practice pretty quickly morphed. And consultants, of course, want jobs. Where are the jobs in Russia? The jobs in Russia are not just with American Express, they’re with everybody there. So the practice more and more morphed from making sure that American Express was happy and comfortable into serving new Russian entities that were springing up, and we grew a huge business with, you know, really oligarchs, with a number of others in Russia. So that was the evolution.
And because it was Russia, and it was so—I’m going to use the words screwed up, Wild West, whatever, from ’92 to 2000, let’s say, it required tremendous attention and oversight, because we as Ernst & Young, we had enough problems with the S&L crisis, with this, with that. You just couldn’t afford the black eyes. We got black eyes, but you tried to minimize it. So it takes extreme, I’ll say, special—special review would be the way I would say it in terms of overseeing a practice. I didn’t have to do that for the U.K. practice. So that’s too many words, but that’s the answer.
Daniel Satinsky: But that’s important. You had to do due diligence on everything, always.
Paul Ostling: Everything, always.
Daniel Satinsky: And as you grew, you grew by hiring young Russians. Is that correct?
Paul Ostling: Absolutely. [Right away.]
Daniel Satinsky: And where did you find them?
Paul Ostling: They found us.
Daniel Satinsky: They found you, okay.
Paul Ostling: I mean, it was a “thing”. There’s a book by a guy you know named Charles Hecker.
Daniel Satinsky: Sure.
Paul Ostling: “Zero Sum.” [Amazing book. Like your interviews here.]
Daniel Satinsky: Right.
Paul Ostling: I think if you—and I was quoted in there a bunch. There were so many smart young people, and they all understood that getting a job with a Western company was a krysha*, and it afforded opportunity and upward growth for them. And so, we virtually were a magnet where they were constantly seeking opportunity. And as we grew, we quickly understood how bright these people were.
And it was hilarious, in some ways. I mean, we would run… I was, for a time, between 1985 and 1990, I was in charge of HR for Ernst & Young. I moved out of legal because I wanted some growth. And in the U.S., we had kind of an academy in Virginia, and then after the merger two of them, one there and one in Cleveland. But we did a lot of on-site study for particular levels, like you make senior you go somewhere for a week or so, or two weeks, you make manager you go somewhere to be trained.
Well, we tried to replicate that “going somewhere thing” in Russia, and it was hilarious because if you take a bunch of young Russians in 1994 or 1995 to like 15 kilometers, or 20 kilometers outside of Russia to a quote, “resort” to try to do training, it was, if I can use the word “cluster fuck,” and I mean that in reality as well as alliteratively. Trying to control them was impossible, but hilarious. I mean, the stories are amazing.
If I can tell off color stories, we had this square stairway that went up three stories, and then we added a story, and it went up right in the huge central ornate hall of the entry of this wonderful old building. And we noticed—you know, everybody smoked—and they were all smoking at the bottom of the stairs, the guys. And there was a rack right there for the Moscow Times right there, so it was like a hub of this growing office. And we understood eventually that the guys were all standing there because many of the women were not wearing underwear, and they were staring up the girls’ skirts. So Karl had to write a memo, as delicately as he could, asking women to wear underpants.
Daniel Satinsky: Wow.
Paul Ostling: I mean, this could only happen in Russia. It was just amazing. But yes, so these wonderful young people were bright. They didn’t have accounting degrees. There was no such thing. But they had intelligence, and education, and interest, and so we trained them, and they became, you know, Magnitsky started with us. As a young tax guy before he moved out. So, he’s an example of the kind of extraordinary young talent that just wanted the chance to join a firm, not just EY, but all these growing professional institutions and companies. And so, we had a huge number of expats. And around, I’m going to say, 2002 we understood we needed to…you know, we went through this thing in Vietnam, Vietnamization, where we tried—you remember that.
Daniel Satinsky: I do.
Paul Ostling: I lived through that. And so we understood that we needed to do the equivalent in business in Russia of really uplifting the Russians to be the future and moving the expats out. And even now there are a couple of old expats still around, but really, we Russified the practice. It took 10 or 12 years to really get it there, but we did it. And so it was an amazing thing. That may be the most amazing aspect of this, was the talent uplifting and the transfer of knowledge and technology of how to run a business, how to be an accountant, how to be a tax person, how to be a consultant, how to be all these things. It may be the greatest thing we did.
Daniel Satinsky: And when would you say you began noticing the impact of that? I’m asking this because other people have pointed to 1998 and the crisis, and the exodus of expats at that time, and then that companies discovered they didn’t need the expats and they could survive using Russians, and that it began to be a different character of things around 1998. But I’m not sure you’re seeing it the same way.
Paul Ostling: I’m not, and for a very specific reason. So, in terms of recognizing the level of talent and the potential, immediately. The problem, in our case, was we weren’t building widgets or lifting gas and oil out of the ground. And trying to create a cu—so accounting and auditing are not a cookie-making exercise, and there are issues in a place like Russia, particularly as you take on more local business. The corruption is still existent, and I never saw a deal in all my time in Russia go in a straight line.
Daniel Satinsky: Okay.
Paul Ostling: And therefore getting—I’m not sure the culture is there now fully. And we had, you know, when did the accounting profession begin? It began really when corporations started to be something, so let’s say the 1850s, the birth of something, the progeny of accounting, maybe. And then by 1900, let’s say, we had real accountants—real accountants and real firms. By 2000 the technology and the level of—if you think about the S&L crisis, think about the Foreign Corrupt Practices Act, think about all of these legislations trying to prohibit Ponzi from doing his work.
In a place like Russia, I hate to say this, but what do investors want? They want good corporate governance, they want transparency, rule of law, a level playing field, stability, and diminishment of corruption. Well, none of that stuff existed. And it’s not just something, you know, even now, if you read the corporate governance standards, they’re pretty damn good. They just don’t mean anything in real life. So even now. I was there. I can tell you.
The first thing that goes out the door is governance in a crisis. That’s good for good times, but we don’t have time for that shit now, we have to run this business. And unfortunately, it’s easy to train people on how to book a lease versus a sale. It’s a lot harder to imbue them with the sense of smell and how to truly make the tough decisions on something where you have to call the ball and say you’re fired, client, or no, we’re not doing that. And so unless you have enough of that senior talent who are on the firing line and can smell the smoke, you risk your global reputation.
And so even up until, I’m going to say, Sasha Ivlev became the country managing partner in about 2020. Before that it was this guy we fired, then it was Karl, then it was, when we did the—we had a guy named Steve Moosbrugger from about 2000 to 2002. Karl came to work with me. Then I sent him to be our guy in China. Then we did this merger with Andersen. We got Hans Jochum Horn. He and I didn’t see eye-to-eye, so he left. We put a local in charge who was an Andersen guy. That didn’t work out.
And I called Karl in like 2004, and I was on my way from Domodedovo to our office, which was then over by Paveletskaya*, because we had moved after the merger, and I said Karl, I need you to come back. He said when? I said tomorrow. And he did. And then he was there until about, I’m going to say, 2014, 2015. Then we had a guy named Joe Watt, and then Sasha Ivlev. So, for us there were a number of Western partners from France, the U.K., the U.S., Germany, Australia, people like that. The number got smaller as the trust grew that the Russians were getting the sense of, I’ll say, right and wrong, smelling the smoke, making the right calls. But I would say because of the special needs of being a police force for fraud and integrity, it was a very special place in our view, and I think in all of the Big Four’s view, quite honestly, but the transition to just letting go and turning over was a lot slower than in the oil and gas or manufacturing or consumer products space, for special reasons.
Daniel Satinsky: I see. Interesting. And so you were the intermediaries between the sort of Western standards and Russian realities, if you will.
Paul Ostling: Yes, yes.
Daniel Satinsky: And did you see yourself over time sort of changing those Russian realities? Was that part of your mission? I know you worked for clients, but did you have that sense of a societal transition that you were involved with or was that just not part of your thinking?
Paul Ostling: A very philosophical question. I think because the Big Eight, the Big Four, Ernst & Young is in 140 countries. Now it’s 250,000 people. No, now it’s more. Now it’s, you know, when I left it was 225. We were 22 billion in revenues when I left in 2007. Now, you know, I just went to a partner meeting in Florida, and probably 300 and something thousand—
Daniel Satinsky: Employees.
Paul Ostling: —revenues much higher. And when you look at EY the big tent includes Francophone Africa, it includes Nigeria, it includes Germany, Switzerland, Italy, South America. It is a conglomeration of cultures. And I think we see ourselves as a big tent that doesn’t try to change cultures, but tries to provide seamless, high-quality service worldwide, which means that you can keep your culture and your religion, but the real religion you have to have in your work is seamless quality and conformity with the standards that apply. And within that realm there’s room for all kinds of culture, unless your culture is contrary to seamless quality service worldwide. And seamless quality service includes no corruption, no stink. And I would say we are where we are today in Russia because we never quite got there.
Daniel Satinsky: Yeah. But you expected to?
Paul Ostling: I guess I have to say that the first thing you should understand is that I started at Arthur Young in 1977, and I was Associate General Counsel. And they hired me because I had been involved in a lot of, in just a few years at Chadbourne & Park I had been involved in a lot of special investigations, including the United brands investigation—sorry, United Fruit investigation where the guy, Black, jumped off the Pan Am building. And I came to the attention of Arthur Young, who were the auditors, and they asked me to come because they had a number of global, I’ll call them, “sensitive payment” reviews, and so I agreed to do it.
And throughout my career at Arthur Young and Ernst & Young, when there were major, I’ll say, investigations or forensic things, no matter what my job was, they asked me to be involved or run them, and so I was involved in going all around the world and doing these special investigations. This one that they hired me for [— JF Pritchard —] took me to Iran, Saudi, all around the world, and involved interfacing with the Justice Department, the SEC, the RCMP. And I later did the oil for food investigation, I did the EF Hutton review, I did the Swiss insurance and bank companies’ seizure of genocide victims [funds — seeking restitution], and I ran the part of it as well that distributed the [recovered] money to the heirs of those poor people. And so this kind of morphed my career into a global role.
And we did the merger between Arthur Young and Ernst & Whinney in 1989. I was involved in doing that deal, and kind of as a reward I became the vice chairman of the U.S. firm. And I requested of the chairman, [Phil Laskawy], I said I think my future should be global. And he hesitated, but I got involved, as a result of that request, in being one of the three or four U.S. partners working with three or four U.K. partners in starting all the practices in Eastern Europe, the CIS and Russia.
Daniel Satinsky: And when was that group formed?
Paul Ostling: 1990.
Daniel Satinsky: 1990, okay.
Paul Ostling: And we had one guy, Richard Lewis, who’s now passed. He was quite a character, a British tax guy, very esoteric and one-of-a-kind human being. And he actually, we set him up at that time in an apartment on Prospekt Mira*. And he was our first—he was Employee No. 001. And so I was involved. The U.S and U.K. firms financed it all. We formed something called Ernst & Young Eastern Europe that we used as a vehicle. It was an Isle of Man entity. All the wrong things. We did all the wrong things.
And we tried to find—because you needed have…the law at the time required that you had joint ventures, remember, so we found a joint venture with a, let’s call him, a consultant, using the term loosely. His name was Alex Rubtsov. And his greatest claim to fame, I think, was [allegedly] having an affair with—I shouldn’t say this—with Yeltsin’s daughter, Yelena. But he had access. And so he became a joint venture partner. This is a year or so down the road at the very beginning. And we found a guy named Oleg Valerius who we called an audit partner, but he wouldn’t know an audit from a beehive, because there were no such things. They had no reason to tax anybody because there was no income, right? So I got involved because I—
Daniel Satinsky: Can I stop you?
Paul Ostling: Yeah, go ahead.
Daniel Satinsky: One question. When you started this, who did you expect your customers to be? Who were your clients?
Paul Ostling: It was obvious at the time that we were dealing with our American Expresses and Mobil and people who were going there and would need services, because we were serving them in, at the time, I guess, in 1990, we had 140 countries, 700 offices. And so we were serving worldwide clients in the Philippines, and China, and trying to figure out how serve them in Vietnam or Libya as well, which were problems. And Russia became, and Poland, all these places, not just Russia, but all of them became places where we needed to serve our global client base. And that was the initial thought.
Daniel Satinsky: Okay, and so at that point you didn’t have any expertise in Russia as a country—
Paul Ostling: None.
Daniel Satinsky: —but you understood the needs of the global clients, so you were in some ways the blind leading the blind in the Russian territory.
Paul Ostling: And I had also had this unique experience in unfucking fucked up situations in Indonesia, where we had to decide whether our partner should go to jail or whatever, and in Turkey, where I was sent into these situations to try and figure out about fraud, not just our own people, but clients, where we needed to decide how do we deal with this terrible situation. [I did this in Brazil, Argentina, Italy, Vietnam, and later in Cuba even —] and that was kind of an outstanding primer, if you will, for just emerging markets, which this, of course, was.
And it was really because I raised my hand and I said I think the future is in globalization, and I’d like to, my next thing in the firm I’d like to be global. And so in 1993 they kind of formalized this for me and made me “global counsel”, and I actually started going to Russia. I can’t remember whether it was ’92 or ’93 that I first went. [I had been working on it from New York and London, but the operating issues on the ground required you go there and fix it.] And I first went because the general counsel and the CEO of Ernst & Young Global, a guy named Mike Henning, [a true saint and globalist], were very concerned about how the operation in Russia was being run. And because of my expertise in forensics, they said you go and you figure out what you guys did, how is it going. [Fix it!]
And I went and found out it wasn’t going so well. It wasn’t going so well in Czech Republic, it wasn’t going so well in Russia. And in a number of these situations the guys we sent had gone native, I’ll say, and began to do squarely things with locals [that contravened our policies.] In the Czech Republic we found out that the guy, the Brit, had gotten involved with one of the local, quote, “partners” in buying a property to lease it back to the firm, not something we tolerate. And I found even worse things in Russia. [Self-dealing, misuse of firm assets.]
And so, we—you know, I don’t want to mention his name—we replaced the managing partner. [And others. We could not replace the senior Russian.] We understood we needed to control Alex, because he didn’t know how to do a deal without a bribe. In Ernst & Young, when you go and you find a mess, and you’re in a position of responsibility, you’re then in charge, right? So, it was like okay, now you fix this thing, which is kind of the way it should be, right?
Daniel Satinsky: Yeah.
Paul Ostling: You found it, you fix it. So, for the next few years I spent most of my time in Russia, living in a place called Chaika. We had rented about a dozen, I’ll call them dachas, but some of them were old cottages. It was a Communist Party upper echelon area with metal walls and that kind of thing. [Some were the Nordic pre-fabs. Steel walls. Hummers with gun ports.]
Daniel Satinsky: Okay, so like a compound.
Paul Ostling: It was exactly a compound. But there were houses, and there was like a, I’m going to say, a central building that had facilities in it, and a number of the partners who were expats were living there, and I had a place there, shared it. And in 1994, with the EY CEO guy named Mike Henning, who I mentioned earlier, we decided that we should name a really pure person as the country managing partner, and we picked a guy named Karl Johansson, who had been a tax partner in the Minneapolis office. And because of the merger he didn’t get the job as office managing partner, and this was kind of a consolation prize. We didn’t understand how big it would become. But we asked him to move to Russia and assume the job of the guy who we let go. [Karl deserves the lion’s share of the credit for the success EY became in Russia. We owe him tremendously. And he was a hero for the Russians at EY. A true advocate.]
Daniel Satinsky: And so, what was important to you was not Russian knowledge or Russian language, it was integrity and knowledge of your firm’s procedures and your belief that the people would stick to them once they were in an environment that did everything to pull them in different directions. Is that fair?
Paul Ostling: Exactly. He was unimpeachable. He was uncorruptible—incorruptible. And we were right. And he was there on and off until, I don’t know, 2020, 2018. His name was Karl Johansson, and he was outstanding as a person who could be trusted. Very interesting character. And he moved there in 1994 or early ’95 and took over, which relieved me. [But we became very close friends for life. He was never far away from me as I ran EY.]
And throughout my career in EY, from the time I began until I left after 30 years in 2007, the CIS practice reported directly to me. I became the global executive partner in 1995. In 1997, with the newly named global CEO, [an amazing] guy named Bill Kimsey, we decided we needed to globally integrate Ernst & Young in order to ensure quality everywhere. You can’t do it unless you control the P&Ls. And we decided we couldn’t do that from the U.S., so we moved the global headquarters to London, and my family and I moved to London in 1997, and in 2003 I became the global COO as well. [Bill Kimsey was the most authentic leader I met in my life. I had great leaders in the Marine Corps, great leaders in 30 years at EY. But Bill Kimsey was a different breed. I owe my career and development to Bill Kimsey.]
And so from 1995 to 2007 the Russian practice of EY reported to me. And that meant that I was having to be there all the time because it wasn’t a place…it was like having a cash business in Brooklyn, not something you can totally delegate and forget about. There were always, always issues that you had to just get on a plane and go, and so I wound up spending more time going there than Singapore, for example.
Daniel Satinsky: Let me ask you about this a little more. So, your clients were multinationals to begin with who were going into Russia. And so when you talk about issues, those are issues that arose from what the multinationals were doing, what your staff was doing, what the Russian clients were doing? I’m not asking you to name names or anything, but could you describe what you mean by problems and where they arose?
Paul Ostling: Sure. So, you go because Columbus goes, and you set up a sail service place in the Dominican Republic for his boats, right? But pretty quickly you realize you have to find sails and wood and stuff, and you get involved in the local economy. And that’s what happened. We went there originally to serve—well, we got this huge project, Tengiz, Conoco, down in the Eurasian area, Kazakhstan. That was one of our earliest projects. We got two guys who were U.S. partners, Ben Miller and…oh, my god. I can see him, but I can’t remember his name. I’ll remember it and I’ll tell you. But we sent these, one from Dallas. One had been a former Andersen partner. Both oil and gas guys. And they spent their time between—Dean Ridenour—and they spent their time between Russia and Kazakhstan. Well, that meant we needed a place in Kazakhstan.
Well, a person a bit beyond our control had been hired by the original [managing partner] guy. Instead of finding flats, she rented a villa on a hill. It became a real estate issue. And it sounds like a minor thing, but everything you did entered you into the local economy and created issues. [It was the wild west in a wonderful way. But you would up inside people’s lives. These were adventurers. We had a guy go a little crazy in love. He wound up being robbed and murdered in his tub. That puts you in the press, with US officials, local police, the family. The side issues were endless. As a company bringing in expats, hiring young people — you become “pater familias”.]
So we moved, obviously, pretty quickly, as another example, from this apartment, and a few other places, by the way, to a building on Podsosensky Pereulok* in 1992, and we were renting the building. And actually, the other half of the building was Moscow University, a brand-new thing founded by two Russians [— a couple —] and Soros money. And we split the building with them. This couple “owned the building”, whatever that meant in 1992, and so one of the problems I had to straighten out first was what the hell is a lease of a building that nobody really owns in a [recently] communist country. And so you guys better invent some real estate law, you know? You guys better invent some tax law. So then I had to…then we decided we wanted to buy half of that building. So, then I had all these problems in like ’96, ’97 about how do you actually buy a building. Where’s the deed? Well, we don’t have deeds.
Daniel Satinsky: Yes, right, how do you do a title search.
Paul Ostling: Right. So those are just mundane examples of day-to-day operating things that are how you run a business. But then in 1998 we had the crisis. Well, that presented issues around what do you do with all these brilliant people who you hired, and you now have a crisis, and the revenue stream has changed.
So there was a crisis where Karl and I were taking these young Russians and sending them out to San Francisco, or Chicago, or London, and a lot of them never went back. A guy named Bobrow. He may still be a partner in San Francisco. So, they were bright people, they were thirsty to learn. They were amazing young people with no accounting background. So they came, we trained them. There was no such thing as an accountant in Russia, so we had to send them to London or the U.S. to get an accounting certification, because there was no professional standard.
So, all of these issues were how you have a place to work, how you get people, how you treat people. And also, on the client side, well, you know, we did—I think one of the first IPOs was Beeline, right, the phone company. I had to be involved with that, of course. Somebody had to make sure that that was really up to snuff. And so we quickly morphed from serving American Express and Conoco and the big giants—McDonald’s was a client. A lot of big companies were our clients. We morphed with them.
McDonald’s went to sell hamburgers. Well, eventually they figured out we better make the buns here, right? And so that creates an entire supply chain. And eventually some local dude owns a bun factory, right? And so the practice pretty quickly morphed. And consultants, of course, want jobs. Where are the jobs in Russia? The jobs in Russia are not just with American Express, they’re with everybody there. So the practice more and more morphed from making sure that American Express was happy and comfortable into serving new Russian entities that were springing up, and we grew a huge business with, you know, really oligarchs, with a number of others in Russia. So that was the evolution.
And because it was Russia, and it was so—I’m going to use the words screwed up, Wild West, whatever, from ’92 to 2000, let’s say, it required tremendous attention and oversight, because we as Ernst & Young, we had enough problems with the S&L crisis, with this, with that. You just couldn’t afford the black eyes. We got black eyes, but you tried to minimize it. So it takes extreme, I’ll say, special—special review would be the way I would say it in terms of overseeing a practice. I didn’t have to do that for the U.K. practice. So that’s too many words, but that’s the answer.
Daniel Satinsky: But that’s important. You had to do due diligence on everything, always.
Paul Ostling: Everything, always.
Daniel Satinsky: And as you grew, you grew by hiring young Russians. Is that correct?
Paul Ostling: Absolutely. [Right away.]
Daniel Satinsky: And where did you find them?
Paul Ostling: They found us.
Daniel Satinsky: They found you, okay.
Paul Ostling: I mean, it was a “thing”. There’s a book by a guy you know named Charles Hecker.
Daniel Satinsky: Sure.
Paul Ostling: “Zero Sum.” [Amazing book. Like your interviews here.]
Daniel Satinsky: Right.
Paul Ostling: I think if you—and I was quoted in there a bunch. There were so many smart young people, and they all understood that getting a job with a Western company was a krysha*, and it afforded opportunity and upward growth for them. And so, we virtually were a magnet where they were constantly seeking opportunity. And as we grew, we quickly understood how bright these people were.
And it was hilarious, in some ways. I mean, we would run… I was, for a time, between 1985 and 1990, I was in charge of HR for Ernst & Young. I moved out of legal because I wanted some growth. And in the U.S., we had kind of an academy in Virginia, and then after the merger two of them, one there and one in Cleveland. But we did a lot of on-site study for particular levels, like you make senior you go somewhere for a week or so, or two weeks, you make manager you go somewhere to be trained.
Well, we tried to replicate that “going somewhere thing” in Russia, and it was hilarious because if you take a bunch of young Russians in 1994 or 1995 to like 15 kilometers, or 20 kilometers outside of Russia to a quote, “resort” to try to do training, it was, if I can use the word “cluster fuck,” and I mean that in reality as well as alliteratively. Trying to control them was impossible, but hilarious. I mean, the stories are amazing.
If I can tell off color stories, we had this square stairway that went up three stories, and then we added a story, and it went up right in the huge central ornate hall of the entry of this wonderful old building. And we noticed—you know, everybody smoked—and they were all smoking at the bottom of the stairs, the guys. And there was a rack right there for the Moscow Times right there, so it was like a hub of this growing office. And we understood eventually that the guys were all standing there because many of the women were not wearing underwear, and they were staring up the girls’ skirts. So Karl had to write a memo, as delicately as he could, asking women to wear underpants.
Daniel Satinsky: Wow.
Paul Ostling: I mean, this could only happen in Russia. It was just amazing. But yes, so these wonderful young people were bright. They didn’t have accounting degrees. There was no such thing. But they had intelligence, and education, and interest, and so we trained them, and they became, you know, Magnitsky started with us. As a young tax guy before he moved out. So, he’s an example of the kind of extraordinary young talent that just wanted the chance to join a firm, not just EY, but all these growing professional institutions and companies. And so, we had a huge number of expats. And around, I’m going to say, 2002 we understood we needed to…you know, we went through this thing in Vietnam, Vietnamization, where we tried—you remember that.
Daniel Satinsky: I do.
Paul Ostling: I lived through that. And so we understood that we needed to do the equivalent in business in Russia of really uplifting the Russians to be the future and moving the expats out. And even now there are a couple of old expats still around, but really, we Russified the practice. It took 10 or 12 years to really get it there, but we did it. And so it was an amazing thing. That may be the most amazing aspect of this, was the talent uplifting and the transfer of knowledge and technology of how to run a business, how to be an accountant, how to be a tax person, how to be a consultant, how to be all these things. It may be the greatest thing we did.
Daniel Satinsky: And when would you say you began noticing the impact of that? I’m asking this because other people have pointed to 1998 and the crisis, and the exodus of expats at that time, and then that companies discovered they didn’t need the expats and they could survive using Russians, and that it began to be a different character of things around 1998. But I’m not sure you’re seeing it the same way.
Paul Ostling: I’m not, and for a very specific reason. So, in terms of recognizing the level of talent and the potential, immediately. The problem, in our case, was we weren’t building widgets or lifting gas and oil out of the ground. And trying to create a cu—so accounting and auditing are not a cookie-making exercise, and there are issues in a place like Russia, particularly as you take on more local business. The corruption is still existent, and I never saw a deal in all my time in Russia go in a straight line.
Daniel Satinsky: Okay.
Paul Ostling: And therefore getting—I’m not sure the culture is there now fully. And we had, you know, when did the accounting profession begin? It began really when corporations started to be something, so let’s say the 1850s, the birth of something, the progeny of accounting, maybe. And then by 1900, let’s say, we had real accountants—real accountants and real firms. By 2000 the technology and the level of—if you think about the S&L crisis, think about the Foreign Corrupt Practices Act, think about all of these legislations trying to prohibit Ponzi from doing his work.
In a place like Russia, I hate to say this, but what do investors want? They want good corporate governance, they want transparency, rule of law, a level playing field, stability, and diminishment of corruption. Well, none of that stuff existed. And it’s not just something, you know, even now, if you read the corporate governance standards, they’re pretty damn good. They just don’t mean anything in real life. So even now. I was there. I can tell you.
The first thing that goes out the door is governance in a crisis. That’s good for good times, but we don’t have time for that shit now, we have to run this business. And unfortunately, it’s easy to train people on how to book a lease versus a sale. It’s a lot harder to imbue them with the sense of smell and how to truly make the tough decisions on something where you have to call the ball and say you’re fired, client, or no, we’re not doing that. And so unless you have enough of that senior talent who are on the firing line and can smell the smoke, you risk your global reputation.
And so even up until, I’m going to say, Sasha Ivlev became the country managing partner in about 2020. Before that it was this guy we fired, then it was Karl, then it was, when we did the—we had a guy named Steve Moosbrugger from about 2000 to 2002. Karl came to work with me. Then I sent him to be our guy in China. Then we did this merger with Andersen. We got Hans Jochum Horn. He and I didn’t see eye-to-eye, so he left. We put a local in charge who was an Andersen guy. That didn’t work out.
And I called Karl in like 2004, and I was on my way from Domodedovo to our office, which was then over by Paveletskaya*, because we had moved after the merger, and I said Karl, I need you to come back. He said when? I said tomorrow. And he did. And then he was there until about, I’m going to say, 2014, 2015. Then we had a guy named Joe Watt, and then Sasha Ivlev. So, for us there were a number of Western partners from France, the U.K., the U.S., Germany, Australia, people like that. The number got smaller as the trust grew that the Russians were getting the sense of, I’ll say, right and wrong, smelling the smoke, making the right calls. But I would say because of the special needs of being a police force for fraud and integrity, it was a very special place in our view, and I think in all of the Big Four’s view, quite honestly, but the transition to just letting go and turning over was a lot slower than in the oil and gas or manufacturing or consumer products space, for special reasons.
Daniel Satinsky: I see. Interesting. And so you were the intermediaries between the sort of Western standards and Russian realities, if you will.
Paul Ostling: Yes, yes.
Daniel Satinsky: And did you see yourself over time sort of changing those Russian realities? Was that part of your mission? I know you worked for clients, but did you have that sense of a societal transition that you were involved with or was that just not part of your thinking?
Paul Ostling: A very philosophical question. I think because the Big Eight, the Big Four, Ernst & Young is in 140 countries. Now it’s 250,000 people. No, now it’s more. Now it’s, you know, when I left it was 225. We were 22 billion in revenues when I left in 2007. Now, you know, I just went to a partner meeting in Florida, and probably 300 and something thousand—
Daniel Satinsky: Employees.
Paul Ostling: —revenues much higher. And when you look at EY the big tent includes Francophone Africa, it includes Nigeria, it includes Germany, Switzerland, Italy, South America. It is a conglomeration of cultures. And I think we see ourselves as a big tent that doesn’t try to change cultures, but tries to provide seamless, high-quality service worldwide, which means that you can keep your culture and your religion, but the real religion you have to have in your work is seamless quality and conformity with the standards that apply. And within that realm there’s room for all kinds of culture, unless your culture is contrary to seamless quality service worldwide. And seamless quality service includes no corruption, no stink. And I would say we are where we are today in Russia because we never quite got there.
Daniel Satinsky: Yeah. But you expected to?
Paul Ostling: We thought—I thought, you know, when I got there… So, I was a Marine. When I first got there and I sat in Red Square on a cold morning in March, and I saw the rebar sticking out at Dynamo on the way down, I thought my government had lied to me. I thought I could smell hope in the air. The women were beautiful; the people were smart. I didn’t feel like it was particularly sinister for me. And I thought they probably could launch 1,000 missiles, but I wasn’t sure they could actually hit what they were aiming at at that time. And so, I had huge buckets of goodwill and hope. And that lasted through until, I’m going to say, the Mechel incident. I began to become disillusioned but couldn’t name it. Well, the Kursk incident with Putin staying at his vacation and refusing help. I sat there in Coffeemania reading the Moscow Times, not being able to believe that he wouldn’t let us come help save these sailors kind of thing.
Daniel Satinsky: Oh, okay, got you.
Paul Ostling: And then the Mechel incident when he went out there and visited, and the oligarch was ill, and he said something like well, if he thinks he’s sick now, I’ll really make him sick. And the stock price dropped I don’t know how many billion dollars overnight. Well, I kind of understood that what I thought was a great thing of him coming in and providing order probably was a different kind of order than I expected. And then his 2005 performance in Munich kind of made me one notch further along in being a little queasy. And then I would say—
Daniel Satinsky: That would be 2005, right?
Paul Ostling: Yeah. So, 2004, 2005 Mechel and then Munich. And then there was, let’s call it, a pipeline of IPOs, and we were really busy, and it was so great. Despite this background music that was kind of like “Phantom of the Opera” organ in the scenes before the guy with the mask shows up—na-na-na-na. That was in the background. But in the foreground, we were still churning out IPOs, and hiring people, and growing, and loving it. And I [— we, EY Global, the US and K firms —] gave away the Russian practice to the partners. I [got to execute that transaction] in 2004, ’05, ’06. I’ve got a [little glass] globe. I went for the ceremony. Literally, because the U.K. and U.S. practices owned it, and we literally gave the balance sheet, handed it to the Russian partners.
Daniel Satinsky: Wow.
Paul Ostling: Right? And that was the sign of we love you, it’s yours, it’s now your equity. We literally wrote it off and gave it to them. Millions and millions and millions of dollars.
Daniel Satinsky: And how many partners were there?
Paul Ostling: At that point?
Daniel Satinsky: Russian partners.
Paul Ostling: 25, let’s say. 25, 30.
Daniel Satinsky: These were people who had grown up through your organization and reached the level of becoming partners. And now you were giving them the—
Paul Ostling: The equity. All the equity. Ownership.
Daniel Satinsky: But operationally still EY controlled who was the managing partner and so on.
Paul Ostling: That’s the governance structure.
Daniel Satinsky: The governance. But the ownership and the huge value of the practice—
Paul Ostling: We transferred it. We gave it to them. We gave it to them. There were some—Karl was one of them. There were guys who were expats, but Russians. Sasha was one. So, we gave it to them. But shortly after that it was 2008. And by then, 2007 I left EY, I moved there and became CEO of Kungur Oilfield Equipment Services. And in 2008, of course, Lehman Brothers and the debt crisis.
And a lot of the growth in Russia, and a lot of the IPOs, if you recall, as a result of the decimation of the Soviet Union, a lot of these industries were disaggregated. They were all kind of connected in various industries and they became disaggregated. And a lot of people made a huge amount of money by re-aggregating and IPO’ing. Integra was the darling of the market. It was a rollup of oil field services companies. It was a huge listing, and it became a bust. And the EBRD bailed it out, right? But from 1999 until 2008 it was boom city, right? In 2008 the pipeline became a spigot.
And I think if I were going to tell you three or four major events that changed me from a man of oh my god, this is wonderful, this could be the 51st state to when the light bulb switched, my events would be Kursk, Mechel, Munich, debt crisis, and there was this strange gray cloud we lived in around Bill Browder, around Pussy Riot. Even before the Olympics there was this feeling that I had sitting in my office then at Brunswick Rail and feeling like we’re inside a damp gray cloud.
And that never went away. It only changed colors and intensity. But by 2013 I was aware that my hopes of 1992, ’93 were dashed. And by the way, it takes 15 years to actually begin to learn the culture. And I learned the language only as a 50-year-old guy. So, when you’re learning the Russian language, you’re learning more about culture, you’re learning more about life. And until then, and even after, some people, you know, people have different reactions, right?
Daniel Satinsky: When did you start learning Russian?
Paul Ostling: I’ll say really seriously 2007. Once I became CEO of Kungur Oilfield Materials, and was the only English speaker among 3,000 people, I got the message.
Daniel Satinsky: Yeah.
Paul Ostling: And I hired three teachers: one for the morning, one for lunch, and one for after. Three different kinds of teachers: one old Soviet, one younger. She actually worked for BT and was married to this guy, oh god, Stas Popov, the king of Latin dance of Russia, who’s probably my age, but quite a guy. And another young woman who was a bit Troglodytic, but she—so I had three different kinds of teachers because I understood I had to do this. But my point is that in the ‘90s I was all in.
Daniel Satinsky: All right, so we’re back recording after a break. So let me kind of summarize where I think we were and, on the topic, we were because I know you’ve—we’ve had a break, and sometimes you lose that train of thought. We were discussing the impact of language on your understanding of culture, and how you worked there in the context of Russia, particularly when you started learning Russian.
And if I understand you correctly—I’m going to summarize this and you can tell me if I’m wrong—from the time you started working there in the early ‘90s through about 2007 most of your work was conducted in English, and you were in an English environment, and my guess is as a result pretty much lived within the confines of the expat community, the business associations, the restaurants, the social life of the expat community that developed over the ‘90s and was really an English language primarily community at that point. And then you began studying Russian when you were in an environment in which you were the only non-Russian speaker, and you started telling me about how that changed things for you. So, first of all, am I correct about the beginning?
Paul Ostling: No. So…no, not really. Like everybody else who came there, you self-teach a certain degree of Russian. So “chernaya sobaka” [black dog], you know, I mean, the first words you learn. “Dobroe utro” [good morning], you know, “Dobri vecher” [good evening]. So you begin to learn Russian. You can’t help it. You can’t be there in the ‘90s and get in a cab and not know how to tell people where to go. So, like every other person who came, I self-taught myself. I had a dictionary. I tried my best. I was always trying. That’s No. 1. And we had jokes like “pectopah”. You know what I mean by that?
Daniel Satinsky: Yes, a restaurant. It’s a standard foreigner joke.
Paul Ostling: We all went through this transliteration and learned the alphabet. That’s No. 1. No. 2, even though there was a language barrier, there was no social barrier, and so I would take real exception about… The community was very blended. Of course there were expat things. I went to a Catholic church, the French church that had an English service at 9:00 on Sunday, so that’s English, and I went there for a reason, right? But I would go to the Orthodox church up the street after that because it was so mystical, right?
And the young Russians were all speaking English, and so there was a huge exchange of social behavior, and there were always Russians involved with us. We would have volleyball games out at Chaika, where this place was where we stayed in the ‘90s, and on the weekends there were as many Russians as expats. And part of that was because all the expats were involved, marrying Russian women, or the other way around. And so that started…you know, it’s like during a war, right? There’s this exchange that can’t be stopped. It was the same thing. In 2007 I understood I needed to formally learn Russian. “Ya ponyal” [I understood]. Da? “Vy govoritye po russki” [You speak Russian] da?
Daniel Satinsky: “Nemnogo, kak vy” [a little bit, like you] yeah.
Paul Ostling: “Moi okonchaniya i udareniya byl plohoi” My pronunciation and my endings were terrible. And you can’t really speak Russian—so “ya ne verblud” [I am not a camel” of course I not camel. It means something different than “ya zhe ne verblud”, right? One is I’m not a camel; the other is hey, you fool, I’m not an idiot, right? Or ya chuvstvuyu holodnoe. Oh, I’m touching cold. No. Ya chuvstvuyu holodno – ya chustvuyu sebya holodno [I feel cold], right? And unless you understand “sebya” and “zhe”, the meaning is lost. So, I understood I was missing meaning, and I needed to formally learn, and that’s why I dove in. But I wouldn’t say I was ignorant before then, I would say I was one of those sloppy self-taught people. So, it’s just a slight difference.
Daniel Satinsky: Right. But did it also change your understanding of your environment the more you mastered the language?
Paul Ostling: So of course, when you have a Soviet style 60-year-old Russian teacher, she’s going to whip out Pushkin and start making you read stuff. Yes, of course. Ogon v serdce [Fire in the Heart]. You know, I mean, you don’t understand the Russian soul and heart until you begin to learn the language because you learn. And yes, I did.
Daniel Satinsky: Yeah. And it changed your perception of your environment?
Paul Ostling: Yes.
Daniel Satinsky: Can you elaborate on that?
Paul Ostling: Well, it put me… So, it’s a… There are so many ironies in the Russian culture and mentality, and I was aware of differences in behaviors, but you become more understanding of things the more language you learn, and so I became—well, I felt these things before. You feel them. You feel them but don’t really fully understand them. I’m not going to claim I fully understand, but I am pretty good at understanding Russia now. I thought I was pretty smart, but I wasn’t.
The transition began really around the Mechel, Munich, that thing had impact on my understanding of the differences in culture. What is this word solipsism—probably I’m going to use it incorrectly—but there is this Western American illness of assuming that everybody is just like we are, and they’re not. And I was a victim of that. You change when you submerge yourself in another culture. But I would say my transition into really undoing my solipsism began to occur in the early aughts. And I would say once I tried to seriously study the language it was an accelerant in my getting rid of my solipsism and understanding that we’re really different. And this is one of the big problems today in our administration, in my view, if I can be political for a moment. I think that one of the biggest, if this is the right word, solipsists in the world is Donald Trump. And he doesn’t get the subtle differences in mentalitat. And dealing with Russian, I think being a Russia hand, you know, all these dudes who we read about from the past, I think they actually had the ability to differentiate this, understand it’s different in mentality. And I don’t think a lot of Americans—a lot of Americans believe that if Mr. Putin left everything would change.
Daniel Satinsky: Right.
Paul Ostling: They don’t realize that Putin is a reflection of Russia, not the other way around. Well, I started to understand that better in the aughts, and studying Russian made that transition accelerate.
Daniel Satinsky: And was that reflected then in how you understood the business environment as well?
Paul Ostling: Everything.
Daniel Satinsky: So, this is kind of a body of knowledge that built by expats who lived through this with a certain level of experience and view that is sort of not being utilized, I would say. Would you agree with that?
Paul Ostling: A hundred percent.
Daniel Satinsky: Yes, I think that, by the way, that’s part of the reason to do this archive, is to help preserve some of that for the future. But looking back, if you had understood what you understood in 2007 in 1991 or ’92, would it have changed what you did or how you thought about what you were doing?
Paul Ostling: Absolutely. I’d be a billionaire instead of what I am. I would have left Ernst & Young and changed my life much more if I’d known then what I know now.
I think the guys who studied Russian and were there as exchange students had a huge experience, and that’s why they are who they are. And those of us who were—I’m going to use a word in its proper meaning—those of us who were retarded in being not up to speed on understanding the language and the culture, we did a great job, we created great businesses, but I think we did it without fully understanding what we were doing. We were kind of lucky. So, I think it was a huge handicap that you overcome through time.
Daniel Satinsky: And did you at the time feel—and I’m saying I think that many people felt—that Russia was irreversibly integrated into the world economy as it was constituted under Western leadership at that time, that that was an irreversible process that we just assumed, and assumed that it would continue in that way? Is that fair to say?
Paul Ostling: No.
Daniel Satinsky: Okay.
Paul Ostling: No. I could smell and feel the hope in the air in the ‘90s. But very shortly, because of the problems I had to deal with, which were different than maybe other people’s problems, I understood it was different and there were problems. It was not a situation where you went into a tailor and just put on a new suit of clothes and walked out in that outfit and behaved differently. I understood there was a huge transformation that was necessary.
I concluded—and maybe I’m not a good candidate for this video, but I concluded that one of the biggest problems we see now is the lack of a reconciliation at the time of the demise—or maybe it didn’t die—of the Soviet Union, that there was a failure in Russia among Russians—of course the chief blame goes to the leadership, but it goes to the entire society—to reconcile itself with itself and with not just 100 years, but a little more than that. And I think…yeah, so I…
And I understood that before I fully understood Russia, that there had been a lack of recon—take Ribbentrop-Molotov, right? Mr. Ribbentrop goes to Moscow and it’s on the front page of Pravda, and Izvestiya. Pictures are there—where he stayed, where he went. There’re headlines when they reached their deal. They didn’t show the map with Stalin’s line. It was public. And then what’s happening from 1939 to 1940 is that Russia’s supplying everything.
But what’s not talked about much, and never in Russia, is the fact that in September Mr. Hitler says to Mr. Stalin, wait a minute, you’re supposed to be on the other side of this line of conflict in Poland, you know, come in here and take your stuff. And Mr. Stalin goes and takes Bessarabia, half of Poland, all the Baltics. And he’s not—I’m not a combatant, but I’ve invaded all these countries that were separate at the time and just taken them over and start killing all the people, right? That’s what happened. But the denialism is part of Russian culture. And then the Nazis invade, oh shock, and now we forget about this little treaty and the fact that we supplied this place, and their submarines were in pens we provided up by St. Petersburg a little north. We erased that. That didn’t happen. Forget that. We are the heroes.
And then for 50 years we forget about that treaty. Then Mr. Yeltsin comes in and lo and behold, well, yeah, we fucked up. So, for nine years we get truth. Well, yeah, I guess we did that. Well, then VV comes in, Veve*, and we now repaint that painting. It’s a different Joe Stalin. He’s not so bad now. And the magic of the Russian culture is that they adjust to the message of the day— [snaps fingers]—so yay, Mr. Ribbentrop, boo, Nazis. We fucked up. Boo Nazis. We just did what we had to do. And whether it was 180 million or 140 million now, they do what they’re told when you’re told. I think that society needs—I’m sorry. I don’t know, you’re probably Russian and you’re maybe insulted with what I’m saying.
Daniel Satinsky: I’m an American. My grandparents came from Ukraine in 1911, so no, you, you know.
Paul Ostling: So, I think this is one of the problems with the culture and society. And there’s never been a reconciliation about all of that, still now, right? And I knew that before I started studying the language. I understood that. And so, I, in answer to your question, I understood this was a hurdle, this was a problem. It’s why no deal ever went in a straight line. No deal. It’s why you bribe people for a doctor even today. It’s why you bribe to get your kid in a particular school even today. Now, of course we had a few people do that famously in the U.S., right, but they’re in jail. It’s a different—we have corruption in the U.S. Corruption is a facilitator. Corruption is in life. But in Russian society it’s built in. In my role, in my job, I understood that was inconsistent with what I was supposed to be doing for public companies, and I didn’t have to wait to learn the language to figure that out.
Daniel Satinsky: Yeah. You experienced it from the beginning.
Paul Ostling: Well, I experienced. I mean, I went through this romantic period and loved it, and still love it, and still love the people, and still love the food and love the culture. I fight with my wife and fought with my brothers when they were alive. It doesn’t mean I didn’t love them. But I recognized the issue, and it was an inhibitor. And now we’re seeing what happens.
Daniel Satinsky: Yeah. Well, in terms of the interview it seems like this is kind of a wrap-up, if you will. I don’t know if I’ve missed things that you wanted to talk about or experiences you wanted to include, and if I have, I don’t want to cut that off. And there’s a couple other—I do want to talk to you about St. Petersburg after we stop this recording, but for purposes of this recording are there topics I haven’t touched on or experiences that you want recorded here as part of this record, if you will?
Paul Ostling: There are moments. And maybe I should summarize it rather than paint it. But there are moments of experience that are irreplaceable in my life. Crazy, obscene. Feeling my mother’s presence, wishing she were watching me. Feeling and not understanding why I felt I belong. Now my genealogical background is such that I understand some of it, but I didn’t know it then.
Daniel Satinsky: You have roots in Russia?
Paul Ostling: So, my mother was Jewish, and I knew that when I was in Russia, but I didn’t understand the long road, and now I do, and it goes back. So part of my ancestry, believe it or not, goes back to that area that’s in that famous book, I think it’s North South Street, “East West Street,” but this place that was part of the Russian Empire, it’s fought over, and the guys who basically came up with genocide, those words that were used in the trial, they’re from the—my Jewish roots go back to that area that was part of the Russian Empire. And this is amazing, but my father was Swedish. That’s why the name is Swedish. And I got this 23andMe report of my ancient ancestors, which you can get if you pay the extra fee, and one of my ancestors was found as a skeleton from like 1000 A.D. near St. Petersburg, one of those Vikings.
Daniel Satinsky: Wow.
Paul Ostling: And so, I believe in things like genetic DNA, memory kind of thing, that I think there is something to it. And I never quite understood why I felt so comfortable at times. And only in the last few years do I understand, I think, why. And so I had experiences that were remarkable over the course of my time that changed me. And I’m a different person, and a better person, I think, for my experience and for my Russian friends—I’ll call them family. My son went to the finance academy.
So yeah, so I would just say that we left out a lot of the emotion and deep connection, and why I wanted it to work so badly. I did want it to work. And right now it’s not working. And I have great sadness. And I think it’s dangerous for the world right now that the two great nuclear powers are on opposite sides of major issues that are problematic. I think it’s dangerous for the world. And I think we’re a better match. I think we’re better marriage material than the guys they’re lined up with right now. So I feel great sadness for that, but I feel like my Russia experience was transformational in my life and would not change it for anything. That’s what I would say.
Daniel Satinsky: Fantastic.
Daniel Satinsky: Oh, okay, got you.
Paul Ostling: And then the Mechel incident when he went out there and visited, and the oligarch was ill, and he said something like well, if he thinks he’s sick now, I’ll really make him sick. And the stock price dropped I don’t know how many billion dollars overnight. Well, I kind of understood that what I thought was a great thing of him coming in and providing order probably was a different kind of order than I expected. And then his 2005 performance in Munich kind of made me one notch further along in being a little queasy. And then I would say—
Daniel Satinsky: That would be 2005, right?
Paul Ostling: Yeah. So, 2004, 2005 Mechel and then Munich. And then there was, let’s call it, a pipeline of IPOs, and we were really busy, and it was so great. Despite this background music that was kind of like “Phantom of the Opera” organ in the scenes before the guy with the mask shows up—na-na-na-na. That was in the background. But in the foreground, we were still churning out IPOs, and hiring people, and growing, and loving it. And I [— we, EY Global, the US and K firms —] gave away the Russian practice to the partners. I [got to execute that transaction] in 2004, ’05, ’06. I’ve got a [little glass] globe. I went for the ceremony. Literally, because the U.K. and U.S. practices owned it, and we literally gave the balance sheet, handed it to the Russian partners.
Daniel Satinsky: Wow.
Paul Ostling: Right? And that was the sign of we love you, it’s yours, it’s now your equity. We literally wrote it off and gave it to them. Millions and millions and millions of dollars.
Daniel Satinsky: And how many partners were there?
Paul Ostling: At that point?
Daniel Satinsky: Russian partners.
Paul Ostling: 25, let’s say. 25, 30.
Daniel Satinsky: These were people who had grown up through your organization and reached the level of becoming partners. And now you were giving them the—
Paul Ostling: The equity. All the equity. Ownership.
Daniel Satinsky: But operationally still EY controlled who was the managing partner and so on.
Paul Ostling: That’s the governance structure.
Daniel Satinsky: The governance. But the ownership and the huge value of the practice—
Paul Ostling: We transferred it. We gave it to them. We gave it to them. There were some—Karl was one of them. There were guys who were expats, but Russians. Sasha was one. So, we gave it to them. But shortly after that it was 2008. And by then, 2007 I left EY, I moved there and became CEO of Kungur Oilfield Equipment Services. And in 2008, of course, Lehman Brothers and the debt crisis.
And a lot of the growth in Russia, and a lot of the IPOs, if you recall, as a result of the decimation of the Soviet Union, a lot of these industries were disaggregated. They were all kind of connected in various industries and they became disaggregated. And a lot of people made a huge amount of money by re-aggregating and IPO’ing. Integra was the darling of the market. It was a rollup of oil field services companies. It was a huge listing, and it became a bust. And the EBRD bailed it out, right? But from 1999 until 2008 it was boom city, right? In 2008 the pipeline became a spigot.
And I think if I were going to tell you three or four major events that changed me from a man of oh my god, this is wonderful, this could be the 51st state to when the light bulb switched, my events would be Kursk, Mechel, Munich, debt crisis, and there was this strange gray cloud we lived in around Bill Browder, around Pussy Riot. Even before the Olympics there was this feeling that I had sitting in my office then at Brunswick Rail and feeling like we’re inside a damp gray cloud.
And that never went away. It only changed colors and intensity. But by 2013 I was aware that my hopes of 1992, ’93 were dashed. And by the way, it takes 15 years to actually begin to learn the culture. And I learned the language only as a 50-year-old guy. So, when you’re learning the Russian language, you’re learning more about culture, you’re learning more about life. And until then, and even after, some people, you know, people have different reactions, right?
Daniel Satinsky: When did you start learning Russian?
Paul Ostling: I’ll say really seriously 2007. Once I became CEO of Kungur Oilfield Materials, and was the only English speaker among 3,000 people, I got the message.
Daniel Satinsky: Yeah.
Paul Ostling: And I hired three teachers: one for the morning, one for lunch, and one for after. Three different kinds of teachers: one old Soviet, one younger. She actually worked for BT and was married to this guy, oh god, Stas Popov, the king of Latin dance of Russia, who’s probably my age, but quite a guy. And another young woman who was a bit Troglodytic, but she—so I had three different kinds of teachers because I understood I had to do this. But my point is that in the ‘90s I was all in.
Daniel Satinsky: All right, so we’re back recording after a break. So let me kind of summarize where I think we were and, on the topic, we were because I know you’ve—we’ve had a break, and sometimes you lose that train of thought. We were discussing the impact of language on your understanding of culture, and how you worked there in the context of Russia, particularly when you started learning Russian.
And if I understand you correctly—I’m going to summarize this and you can tell me if I’m wrong—from the time you started working there in the early ‘90s through about 2007 most of your work was conducted in English, and you were in an English environment, and my guess is as a result pretty much lived within the confines of the expat community, the business associations, the restaurants, the social life of the expat community that developed over the ‘90s and was really an English language primarily community at that point. And then you began studying Russian when you were in an environment in which you were the only non-Russian speaker, and you started telling me about how that changed things for you. So, first of all, am I correct about the beginning?
Paul Ostling: No. So…no, not really. Like everybody else who came there, you self-teach a certain degree of Russian. So “chernaya sobaka” [black dog], you know, I mean, the first words you learn. “Dobroe utro” [good morning], you know, “Dobri vecher” [good evening]. So you begin to learn Russian. You can’t help it. You can’t be there in the ‘90s and get in a cab and not know how to tell people where to go. So, like every other person who came, I self-taught myself. I had a dictionary. I tried my best. I was always trying. That’s No. 1. And we had jokes like “pectopah”. You know what I mean by that?
Daniel Satinsky: Yes, a restaurant. It’s a standard foreigner joke.
Paul Ostling: We all went through this transliteration and learned the alphabet. That’s No. 1. No. 2, even though there was a language barrier, there was no social barrier, and so I would take real exception about… The community was very blended. Of course there were expat things. I went to a Catholic church, the French church that had an English service at 9:00 on Sunday, so that’s English, and I went there for a reason, right? But I would go to the Orthodox church up the street after that because it was so mystical, right?
And the young Russians were all speaking English, and so there was a huge exchange of social behavior, and there were always Russians involved with us. We would have volleyball games out at Chaika, where this place was where we stayed in the ‘90s, and on the weekends there were as many Russians as expats. And part of that was because all the expats were involved, marrying Russian women, or the other way around. And so that started…you know, it’s like during a war, right? There’s this exchange that can’t be stopped. It was the same thing. In 2007 I understood I needed to formally learn Russian. “Ya ponyal” [I understood]. Da? “Vy govoritye po russki” [You speak Russian] da?
Daniel Satinsky: “Nemnogo, kak vy” [a little bit, like you] yeah.
Paul Ostling: “Moi okonchaniya i udareniya byl plohoi” My pronunciation and my endings were terrible. And you can’t really speak Russian—so “ya ne verblud” [I am not a camel” of course I not camel. It means something different than “ya zhe ne verblud”, right? One is I’m not a camel; the other is hey, you fool, I’m not an idiot, right? Or ya chuvstvuyu holodnoe. Oh, I’m touching cold. No. Ya chuvstvuyu holodno – ya chustvuyu sebya holodno [I feel cold], right? And unless you understand “sebya” and “zhe”, the meaning is lost. So, I understood I was missing meaning, and I needed to formally learn, and that’s why I dove in. But I wouldn’t say I was ignorant before then, I would say I was one of those sloppy self-taught people. So, it’s just a slight difference.
Daniel Satinsky: Right. But did it also change your understanding of your environment the more you mastered the language?
Paul Ostling: So of course, when you have a Soviet style 60-year-old Russian teacher, she’s going to whip out Pushkin and start making you read stuff. Yes, of course. Ogon v serdce [Fire in the Heart]. You know, I mean, you don’t understand the Russian soul and heart until you begin to learn the language because you learn. And yes, I did.
Daniel Satinsky: Yeah. And it changed your perception of your environment?
Paul Ostling: Yes.
Daniel Satinsky: Can you elaborate on that?
Paul Ostling: Well, it put me… So, it’s a… There are so many ironies in the Russian culture and mentality, and I was aware of differences in behaviors, but you become more understanding of things the more language you learn, and so I became—well, I felt these things before. You feel them. You feel them but don’t really fully understand them. I’m not going to claim I fully understand, but I am pretty good at understanding Russia now. I thought I was pretty smart, but I wasn’t.
The transition began really around the Mechel, Munich, that thing had impact on my understanding of the differences in culture. What is this word solipsism—probably I’m going to use it incorrectly—but there is this Western American illness of assuming that everybody is just like we are, and they’re not. And I was a victim of that. You change when you submerge yourself in another culture. But I would say my transition into really undoing my solipsism began to occur in the early aughts. And I would say once I tried to seriously study the language it was an accelerant in my getting rid of my solipsism and understanding that we’re really different. And this is one of the big problems today in our administration, in my view, if I can be political for a moment. I think that one of the biggest, if this is the right word, solipsists in the world is Donald Trump. And he doesn’t get the subtle differences in mentalitat. And dealing with Russian, I think being a Russia hand, you know, all these dudes who we read about from the past, I think they actually had the ability to differentiate this, understand it’s different in mentality. And I don’t think a lot of Americans—a lot of Americans believe that if Mr. Putin left everything would change.
Daniel Satinsky: Right.
Paul Ostling: They don’t realize that Putin is a reflection of Russia, not the other way around. Well, I started to understand that better in the aughts, and studying Russian made that transition accelerate.
Daniel Satinsky: And was that reflected then in how you understood the business environment as well?
Paul Ostling: Everything.
Daniel Satinsky: So, this is kind of a body of knowledge that built by expats who lived through this with a certain level of experience and view that is sort of not being utilized, I would say. Would you agree with that?
Paul Ostling: A hundred percent.
Daniel Satinsky: Yes, I think that, by the way, that’s part of the reason to do this archive, is to help preserve some of that for the future. But looking back, if you had understood what you understood in 2007 in 1991 or ’92, would it have changed what you did or how you thought about what you were doing?
Paul Ostling: Absolutely. I’d be a billionaire instead of what I am. I would have left Ernst & Young and changed my life much more if I’d known then what I know now.
I think the guys who studied Russian and were there as exchange students had a huge experience, and that’s why they are who they are. And those of us who were—I’m going to use a word in its proper meaning—those of us who were retarded in being not up to speed on understanding the language and the culture, we did a great job, we created great businesses, but I think we did it without fully understanding what we were doing. We were kind of lucky. So, I think it was a huge handicap that you overcome through time.
Daniel Satinsky: And did you at the time feel—and I’m saying I think that many people felt—that Russia was irreversibly integrated into the world economy as it was constituted under Western leadership at that time, that that was an irreversible process that we just assumed, and assumed that it would continue in that way? Is that fair to say?
Paul Ostling: No.
Daniel Satinsky: Okay.
Paul Ostling: No. I could smell and feel the hope in the air in the ‘90s. But very shortly, because of the problems I had to deal with, which were different than maybe other people’s problems, I understood it was different and there were problems. It was not a situation where you went into a tailor and just put on a new suit of clothes and walked out in that outfit and behaved differently. I understood there was a huge transformation that was necessary.
I concluded—and maybe I’m not a good candidate for this video, but I concluded that one of the biggest problems we see now is the lack of a reconciliation at the time of the demise—or maybe it didn’t die—of the Soviet Union, that there was a failure in Russia among Russians—of course the chief blame goes to the leadership, but it goes to the entire society—to reconcile itself with itself and with not just 100 years, but a little more than that. And I think…yeah, so I…
And I understood that before I fully understood Russia, that there had been a lack of recon—take Ribbentrop-Molotov, right? Mr. Ribbentrop goes to Moscow and it’s on the front page of Pravda, and Izvestiya. Pictures are there—where he stayed, where he went. There’re headlines when they reached their deal. They didn’t show the map with Stalin’s line. It was public. And then what’s happening from 1939 to 1940 is that Russia’s supplying everything.
But what’s not talked about much, and never in Russia, is the fact that in September Mr. Hitler says to Mr. Stalin, wait a minute, you’re supposed to be on the other side of this line of conflict in Poland, you know, come in here and take your stuff. And Mr. Stalin goes and takes Bessarabia, half of Poland, all the Baltics. And he’s not—I’m not a combatant, but I’ve invaded all these countries that were separate at the time and just taken them over and start killing all the people, right? That’s what happened. But the denialism is part of Russian culture. And then the Nazis invade, oh shock, and now we forget about this little treaty and the fact that we supplied this place, and their submarines were in pens we provided up by St. Petersburg a little north. We erased that. That didn’t happen. Forget that. We are the heroes.
And then for 50 years we forget about that treaty. Then Mr. Yeltsin comes in and lo and behold, well, yeah, we fucked up. So, for nine years we get truth. Well, yeah, I guess we did that. Well, then VV comes in, Veve*, and we now repaint that painting. It’s a different Joe Stalin. He’s not so bad now. And the magic of the Russian culture is that they adjust to the message of the day— [snaps fingers]—so yay, Mr. Ribbentrop, boo, Nazis. We fucked up. Boo Nazis. We just did what we had to do. And whether it was 180 million or 140 million now, they do what they’re told when you’re told. I think that society needs—I’m sorry. I don’t know, you’re probably Russian and you’re maybe insulted with what I’m saying.
Daniel Satinsky: I’m an American. My grandparents came from Ukraine in 1911, so no, you, you know.
Paul Ostling: So, I think this is one of the problems with the culture and society. And there’s never been a reconciliation about all of that, still now, right? And I knew that before I started studying the language. I understood that. And so, I, in answer to your question, I understood this was a hurdle, this was a problem. It’s why no deal ever went in a straight line. No deal. It’s why you bribe people for a doctor even today. It’s why you bribe to get your kid in a particular school even today. Now, of course we had a few people do that famously in the U.S., right, but they’re in jail. It’s a different—we have corruption in the U.S. Corruption is a facilitator. Corruption is in life. But in Russian society it’s built in. In my role, in my job, I understood that was inconsistent with what I was supposed to be doing for public companies, and I didn’t have to wait to learn the language to figure that out.
Daniel Satinsky: Yeah. You experienced it from the beginning.
Paul Ostling: Well, I experienced. I mean, I went through this romantic period and loved it, and still love it, and still love the people, and still love the food and love the culture. I fight with my wife and fought with my brothers when they were alive. It doesn’t mean I didn’t love them. But I recognized the issue, and it was an inhibitor. And now we’re seeing what happens.
Daniel Satinsky: Yeah. Well, in terms of the interview it seems like this is kind of a wrap-up, if you will. I don’t know if I’ve missed things that you wanted to talk about or experiences you wanted to include, and if I have, I don’t want to cut that off. And there’s a couple other—I do want to talk to you about St. Petersburg after we stop this recording, but for purposes of this recording are there topics I haven’t touched on or experiences that you want recorded here as part of this record, if you will?
Paul Ostling: There are moments. And maybe I should summarize it rather than paint it. But there are moments of experience that are irreplaceable in my life. Crazy, obscene. Feeling my mother’s presence, wishing she were watching me. Feeling and not understanding why I felt I belong. Now my genealogical background is such that I understand some of it, but I didn’t know it then.
Daniel Satinsky: You have roots in Russia?
Paul Ostling: So, my mother was Jewish, and I knew that when I was in Russia, but I didn’t understand the long road, and now I do, and it goes back. So part of my ancestry, believe it or not, goes back to that area that’s in that famous book, I think it’s North South Street, “East West Street,” but this place that was part of the Russian Empire, it’s fought over, and the guys who basically came up with genocide, those words that were used in the trial, they’re from the—my Jewish roots go back to that area that was part of the Russian Empire. And this is amazing, but my father was Swedish. That’s why the name is Swedish. And I got this 23andMe report of my ancient ancestors, which you can get if you pay the extra fee, and one of my ancestors was found as a skeleton from like 1000 A.D. near St. Petersburg, one of those Vikings.
Daniel Satinsky: Wow.
Paul Ostling: And so, I believe in things like genetic DNA, memory kind of thing, that I think there is something to it. And I never quite understood why I felt so comfortable at times. And only in the last few years do I understand, I think, why. And so I had experiences that were remarkable over the course of my time that changed me. And I’m a different person, and a better person, I think, for my experience and for my Russian friends—I’ll call them family. My son went to the finance academy.
So yeah, so I would just say that we left out a lot of the emotion and deep connection, and why I wanted it to work so badly. I did want it to work. And right now it’s not working. And I have great sadness. And I think it’s dangerous for the world right now that the two great nuclear powers are on opposite sides of major issues that are problematic. I think it’s dangerous for the world. And I think we’re a better match. I think we’re better marriage material than the guys they’re lined up with right now. So I feel great sadness for that, but I feel like my Russia experience was transformational in my life and would not change it for anything. That’s what I would say.
Daniel Satinsky: Fantastic.
Avenue
Lane
Outlook
Vladimir Vladimirovich [Putin]
State Committee of Television and Radio Broadcasting
A shopping center in Moscow, "State department store"
Subway station name
The roof, Mafia
