Interviews and articles
Supper with the FT: Victor Pinchuk
By Chrystia Freeland
Victor Pinchuk had to have lunch with the prime minister of Ukraine, so we end up eating supper together instead. At least getting a reservation isn’t a problem: Pinchuk has booked an entire hotel restaurant. That’s the sort of thing you can do if you’re one of the richest men in Ukraine (with a net worth of $2.6bn according to Forbes), own a home in London that cost a reported £80m, and avidly collect contemporary art.
Even oligarchic grandeur has its limits, though. The dining room and adjoining garden haven’t been reserved just for the two of us – they are the venue for a “BBQ Party”, the concluding event of a two-day geopolitics conference that Pinchuk has convened in Yalta, the Crimean resort town beloved of both tsars and commissars.
The annual gathering, the sixth one he has organised, is just one part of Pinchuk’s campaign to assert himself as a player in the universe of civic-minded, international plutocrats. He is already a member of the World Economic Forum – a fixture at its annual meeting in Davos – and is also one of the leading foreign contributors to the Clinton Global Initiative, the former president’s foundation.
Fifteen years ago, Pinchuk was a pipes magnate living in his hometown of Dnipropetrovsk in eastern Ukraine. By 2004, he was being invited to George HW Bush’s 80th birthday bash. Now, when he visits Manhattan, he mingles with the likes of Caroline Kennedy and Jeff Koons and has been admitted as an investor to General Atlantic, an elite investment fund.
Membership of the western plutocracy has been the ultimate objective for a number of the billionaires who emerged from the wreckage of the former Soviet Union. But Pinchuk’s yearning for international tycoon status has proceeded in tandem with his equally insistent efforts to make Ukraine a player on the international stage – with him as the essential facilitator, of course. Bill Clinton and Tony Blair, in their afterlives on the high-paying international speakers’ circuit, have attended his Yalta conference; the US billionaire and philanthropist Eli Broad has visited his super-dacha outside Kiev; he underwrote a Paul McCartney concert in the Ukrainian capital last year.
Pinchuk is keen to emphasise this Ukrainian connection at our supper. Determined that our menu should reflect his country’s cuisine, Pinchuk orders for both of us. For our zakuski, or appetisers, he chooses charcuterie, including salo, or pork fat, one of Ukraine’s most prized national dishes, cured fish, and potato pancakes. A serious traditionalist would wash these salty morsels down with vodka . But it has been a busy two days (Ukrainian presidential candidates have attended Yalta in person, while Alan Greenspan, George Soros and Dominique Strauss-Kahn participated in video-link interviews I conducted) so Pinchuk suggests the lighter option of a bottle of burgundy. He picks one that he says is “good, but not too good”.
It is a Saturday night and nearly ten o’clock. Pinchuk, who turns 49 next week, is wearing freshly pressed black jeans and a striped blue shirt. His once black hair is greying and cut very short, perhaps to mask his receding hairline. He is slim, with alert brown eyes, and happy – the conference is over and has gone well – but too focused on our discussion to be described as relaxed. He suggests we speak in Russian, Ukrainian or English as the conversation dictates, and handles each language with ease.
I begin by telling Pinchuk that one of the board members of his foundation told me that, before signing on, he had asked Pinchuk whether its purpose was the stated one of lobbying for Ukrainian accession to the European Union or if it was chiefly intended to provide political protection by transforming Pinchuk from an oligarch into a statesman.
Was the board member right? Pinchuk toys with evading my question for a sentence or two, then parries with a clever and unexpected rebuttal. “Frankly speaking, this topic – European Union membership – is not very strong protection,” he says. “If you speak about freedom of speech, for example, that is much stronger protection for you. If you speak about the European Union, what kind of protection is that?”
Why does freedom of speech offer better political protection? “Because the rest of the world really likes to speak about it,” Pinchuk says, with the slightly weary air of an eastern European explaining the obvious to a western naïf. “If somebody attacks you, then you can say, ‘It’s because I am a supporter of freedom of speech.’ It is much easier to play the game.”
In that case, why not choose freedom of speech as your big cause? Pinchuk smiles slightly and I have the feeling of having been manoeuvered.
”Because, for me, it was really much less about PR and more real,” Pinchuk says. ”It was much less protective and much more about real participation.”
The strongest motivation behind his civic activity, he tells me, is his conviction that “my generation is extremely lucky and this is really a great life”.
If you grew up expecting to become a Soviet metallurgist and, instead, found yourself a globe-trotting billionaire, you probably would consider yourself extremely lucky. But Pinchuk has something more fundamental in mind. His good fortune, he says, is to be present at the birth of the new Ukrainian state.
Our zakuski arrive. A Ukrainian-Canadian myself, I deem them delicious. Pinchuk is a little more demanding: “We are not in a two-star Michelin restaurant, but it’s OK. For Ukrainian cuisine, it’s OK.”
His enthusiasm for Ukraine’s nation-building project is a surprise. Pinchuk, who is Jewish, was raised in eastern Ukraine, which was ruled by Russia for centuries. Did he feel Ukrainian growing up? “No, as a child, I was proud to be Soviet. I never felt I was Ukrainian or Russian.” Later, Pinchuk returns to this point: at the time, he says, he felt the collapse of the USSR to be “a big tragedy ... I liked the Soviet Union, I was proud of it.”
As it turned out, the collapse of the Soviet Union was the best thing that ever happened to Pinchuk. He grew up an only child of “very respected and very poor” Soviet engineers. The family lived in a tiny apartment. “I often say to my children [he has three – a daughter from his first marriage, a stepson and a daughter from his second marriage], ‘The size of this closet is bigger than the apartment I lived in with my parents.’”
Pinchuk followed his parents into metallurgy but, he says, “entrepreneurship was in my blood ... I really liked money. It was just one or two roubles, but I liked it.” He was also, he tells me, “always lucky, thank God”. That luck manifested itself with the advent of perestroika, and the tentative opportunities it offered for commerce.
It is time for borscht, served with the classic Ukrainian accompaniment of light yeast rolls. Pinchuk checks with the waiter that the rolls will be served, as tradition requires, dipped in a garlic sauce.
Then it’s back to the slow collapse of the Soviet economy, and how Pinchuk turned out to have a talent for reconnecting the industrial supply chain, which was disintegrating even more quickly than the political grip of the Communist party. The typical former Soviet businessman, Pinchuk tells me, says: “‘Don’t ask me about my first million!’ I have a totally different story. I am proud to tell about the first million.” And he launches into the tale of what he calls his first million-dollar deal, which involved using refrigerators and microwaves to buy coal from Ukrainian miners, and, through a series of transactions, transforming it into pig iron for a Russian factory.
The story is cut short only when James Wolfensohn, the former head of the World Bank, strolls over to talk to Pinchuk about their plans for the next day. They are travelling together on Pinchuk’s private jet to spend Yom Kippur with Pinchuk’s parents in Dnipropetrovsk. “We’re going to pray tomorrow,” a jovial Wolfensohn explains. “It’s the Jewish Day of Atonement and he has many sins, so I’m going to try and help him by praying with him.”
Metallurgy may be Pinchuk’s vocation and entrepreneurship his avocation, but his true genius is befriending influential people. One of his most important personal connections has been with Leonid Kuchma, president of Ukraine until he was overthrown in the Orange Revolution, and whose daughter, Elena, became Pinchuk’s second wife in 2002. Joining the Kuchma family catapulted Pinchuk from Dnipropetrovsk to the apex of Ukrainian politics – he moved to Kiev and even served two terms in parliament from 1998 to 2006.
Pinchuk remembers the day he met Elena: November 17 1996. A leading Russian actor, who had become a personal friend, invited Pinchuk to a theatre performance in Kiev. “He told me, ‘The wife of the president of Ukraine will be coming, I will introduce you,’” Pinchuk recalls. “I came. Why not? I was from Dnipropetrovsk. I didn’t know people.”
Mrs Kuchma attended with Elena: “Between the first and second acts, I was already totally in love.” But the romance was complicated. “I was married and she was married,” Pinchuk says. “And her husband was the son of the prime minister of Crimea. You can imagine this story – the daughter of a president, the son of a prime minister, and I’m a Jew.”
For the sake of her father’s career, Elena tried to break it off, Pinchuk says. “We tried to stop our relationship.” Then – and if this were a film, there would be a soundtrack by Elton John, another Pinchuk pal – Princess Diana died. Pinchuk and Elena hadn’t seen each other that summer but he phoned her the next day and she suggested a meeting: “After that, we never stopped our relationship, and later she explained that the influence of this tragedy was very strong.”
The arrival of our main course – a perfectly prepared Chicken Kiev – gives me a chance to shift gears from Pinchuk’s Romeo and Juliet version of his marriage to the apparent financial consequences of that alliance. Like all of the region’s post-communist billionaires, he has been the beneficiary of rich privatisation deals. One, his purchase of Nikopol, one of the world’s largest iron alloy producers, provoked a lawsuit from a business rival in which Pinchuk was accused of wrongfully diverting hundreds of millions of dollars. (Pinchuk denied the charges and the case was settled in 2006.)
His purchase, together with fellow oligarch Rinat Akhmetov, of Kryvorizhstal, one of the world’s largest steel mills, was even more controversial. Public outrage over that sweetheart deal was one of the inspirations for the 2004 Orange Revolution. Yulia Tymoshenko, now prime minister and a leading candidate in next year’s presidential ballot, revoked the sale and organised a televised auction of the company.
The reversal was one of Pinchuk’s biggest business losses, and one of Tymoshenko’s proudest political accomplishments. Yet, in a measure of both the conciliatory character of Ukrainian politics and of Pinchuk’s flexibility, Tymoshenko appeared at Pinchuk’s conference this year, giving a speech also broadcast on his television station.
Having built his fortune on one revolution (the Soviet collapse) and survived a second (Ukraine’s Orange Revolution), Pinchuk seems to have endured the recent convulsions of global capitalism with relative ease. His industrial business was badly hurt by the fall in commodities prices, and he had to postpone an initial public offering of Interpipe, his flagship company. But that was offset by Pinchuk’s sale of his Ukrainian bank for a top-of-the-market price.
Our final course of cherry varennyki – a sweet Ukrainian version of ravioli, served with crème fraîche – has now arrived. As we eat, Pinchuk talks about his next projects. These include his proposal to stage the “hottest” event at the 2010 Davos conference by organising a debate between the top two candidates for the Ukrainian presidency.
He is equally excited by another venture, a contest to identify Ukraine’s top contemporary artists, as selected by a jury chaired by Damien Hirst (the winner was announced this week). The longest queues in Kiev, he tells me, are to his PinchukArtCentre, which has one of the largest collections of contemporary art east of Berlin. “I have to create an environment for the new generation. Contemporary art will help me to modernise our society,” he says.
It is nearly midnight. Before leaving, Pinchuk asks me a very Ukrainian question: “It was enough food for you?” I assure him that it was, and ask if I can have the bill. He tells me that won’t be necessary – he has hired the whole restaurant for the night. I explain that for Lunch with the FT, I need an itemised menu and that I should pay. I expect a fight: it goes against the Slavic grain for a man, especially a billionaire, to let a woman pick up the tab.
But Pinchuk is a quick student of western ways and he immediately arranges for a bill to be brought to our table, though he hesitates before passing it on to me. When he ordered our food, Pinchuk had assumed he was my host: the “good” burgundy turns out to have been a $300 bottle. The theme of our meal has been Pinchuk’s commitment to building a new Ukrainian national identity, and he took great pains to select a menu to match – but, even when he eats salo, borscht and varennyki, he is unable to escape the fact that he is also an oligarch.
