The financial crisis seems to have given the Kremlin the opportunity to reassert at least some control over the industries that were so haphazardly discarded during the Yeltsin era. The agent of influence is a government development agency called Vnesheconombank (VEB). The chairman of its supervisory board is - guess who - Mr. Putin. Some of Russia's most powerful government officials, including the finance and transportation ministers, prop up the rest of the board.

VEB has been around since the 1920s in one form or another and has been quickly recast as the lender of last resort as industrial Russia crumbles and foreign loans require refinancing for fear they will get yanked by jittery bankers in London, Paris and New York. The state has funnelled some $50-billion (U.S.) into VEB and already has loan applications for double that amount. The beggars include some of the biggest names in industrial Russia, among them Lukoil, Gazprom, Rosneft, TNK-BP and VTB, Russia's second-largest bank. One surprising applicant is Oleg Deripaska, still routinely cited as Russia's wealthiest man. He controls UC Rusal, the world's biggest aluminum company, which faces a margin call on a $4.5-billion loan from a Western banking syndicate unless that loan can be refinanced. What conditions VEB will attach to any loans is not known, though they will almost certainly come with veto power over future financings. In some cases, VEB could end up with big equity stakes in Russia's leading companies. Outright control of a few of them is not out of the question if commodities don't halt their fast march into hell. Most of them, from oil to nickel, have lost 50 to 70 per cent of their value since the summer. Putin & Co. have the moral authority to exert greater influence over industrial Russia. Western governments are spending fortunes to prop up and nationalize banks and insurers, including AIG and Northern Rock. If the Americans and Europeans can suddenly find virtue in state ownership, so can the Russians.

In fact, Russia’s $180bn-plus intervention in liquidity and capital injections is proportionately even bigger than the $700bn US package, as the US economy is seven times larger than Russia’s. But more money means more risk. The immediate danger is that the funds, which are largely being channelled through big banks, will not reach far into the economy so smaller companies will be left stranded. Next, the rules under which the funds are distributed are unclear, creating a yawning gap for favouritism.

Among the oligarchs, the well-connected will benefit at the expense of the political rejects. Given that Vladimir Putin, the prime minister, has often expressed concern at the way state assets were sold at rock-bottom prices in the 1990s, there is a huge opportunity for a new round of property redistribution. The current bureaucratic elite, which already runs state-controlled companies such as Gazprom and Rosneft, will have every chance to extend their economic empires. The current aid round will almost certainly not be enough. Some $50bn has been set aside for refinancing foreign loans. But $150bn in debt falls due by the end of 2009. So the policy arguments and the struggles for cash and assets are likely to go on for months. An increase in the state’s economic power is necessary and inevitable, as it is the west. But unless Mr Putin and the president, Dmitry Medvedev, take care, Russia’s intervention will be riddled with turf wars and corruption. Oligarchs and bureaucrats could be divided, even more deeply than today, into hostile factions, riding roughshod over the interests of ordinary citizens. The market’s fragile grip on the economy could be undermined.

Russian oligarchs, pop starts, and simply rich people have bought the properties all over Europe, bringing up the real estate prices in Prague and London to new levels. After his visit to Southern France in 2005, a friend of mine commented that “Russian was the major language of the French Rivera.” It seems like the time has come, and Russians have finally figured out that America also has spectacular mountain and ocean views, fresh air, and open spaces, with home prices far below the Russia’s market value.

“Sergey Skaterschikov, a Moscow-based private-equity investor, is shopping for a house in Palo Alto, Calif., because his son will attend school in the area. With a budget of $3.5 million to $5 million, the five- and six-bedroom houses the 36-year-old Mr. Skaterschikov has looked at struck him as cheap compared with Moscow real estate, which he called "insane…" reports The Wall Street Journal.

Please visit the extended post to read the newspaper’s report and see the photos.

Oligarchs Buy Homes In Chic U.S. Enclaves
Rock Star's Two Condos
By CHRISTINA S.N. LEWIS
July 11, 2008; Page W1

The Russians are coming.

As many of America's wealthy are roiled by the credit crisis and general financial gloom, a growing number of rich Russians are house-shopping -- and buying -- in costly U.S. enclaves.

Fertilizer mogul Dmitry Rybolovlev is set to pay nearly $100 million to Donald Trump for an oceanfront mansion in Palm Beach, Fla., say people familiar with the deal reached in May. Last year, Oleg Baibakov, president of GSC City, a Moscow construction-management and consulting firm, bought a condo at Manhattan's Time Warner Center for $13.5 million, according to public records.

A who's who of Russian home buyers.

Fertilizer business mogul Dmitry Rybolovlev made waves last month when he agreed to purchase Donald Trump's Palm Beach, Fla., mansion for almost $100 million in what will likely set the record for the most expensive sale of a U.S. single-family home.

And in Snowmass, Colo., perhaps the most famous Russian oligarch, Roman Abramovich, paid $36.4 million in April for a 200-acre ranch. The property's massive, split-level house is five minutes away from an $11.8 million ski-in, ski-out house that Mr. Abramovich, owner of England's Chelsea soccer team, purchased two months earlier, records show.

While the number of Russians with the means to buy trophy homes is relatively small, they represent an important but little-known demographic group for U.S. real estate. Several years ago, the weakening dollar began to draw more overseas buyers but Russians were scarce. Now, Russia's economy is booming amid soaring energy prices. Moscow real estate is among the world's costliest, making property elsewhere a relative bargain.

In New York City, foreign buyers now make up about 15% of the market, with Russians the largest contingent, says Hall Willkie, president of real-estate firm Brown Harris Stevens. "A few years ago we didn't see any Russians," Mr. Willkie says. "But now, especially at the high end of the market they are buying big apartments...so they are a significant factor."

In some ways, America is just the latest stop on a Russian grand tour. In London, so many Russians have bought property in one neighborhood that it has been dubbed Moscow on the Thames. Vacationing Russians for several years have frequented resorts in the south of France, such as Biarritz and Nice, where some have purchased large homes.

In November, Mr. Blavatnik bought a Manhattan townhouse from Seagram heir Edgar Bronfman Jr. for $50 million, his third Manhattan property. He also owns another townhouse nearby that cost $31.25 million a few years ago. Further uptown, he owns a 14-room co-op in a Stanford White-designed Fifth Avenue building bought for $27.5 million.

Sergey Skaterschikov, a Moscow-based private-equity investor, is shopping for a house in Palo Alto, Calif., because his son will attend school in the area. With a budget of $3.5 million to $5 million, the five- and six-bedroom houses the 36-year-old Mr. Skaterschikov has looked at struck him as cheap compared with Moscow real estate, which he called "insane."

The Miami area in particular is drawing Russians with its upscale shopping, hip nightlife and an escape from Moscow's harsh winters. In Miami Beach, a Russian paid $10.6 million in April for an unusual white concrete house with five boat sails on its roof and two curved terraced pools, according to the seller, developer John Turchin. Nelson Gonzalez, a broker with Esslinger, Wooten, Maxwell Realtors in Miami, says he has shown several Russian shoppers a house on Indian Creek Island with a $35 million asking price, one of the area's most expensive listings.

Miami first became popular with Russians in the mid-1990s, when a coterie of Soviet-era pop stars purchased condos there and Russian media covered their new homes. Newer residents of nearby Sunny Isles Beach include Irina Allegrova, a pop singer who bought a two-bedroom condo for $1.4 million in January, records show. Reached on her Miami cellphone, Ms. Allegrova declined to comment. Rock star Leonid Agutin and his wife, singer Angelika Varum, own two Miami condos, including a three-bedroom one they bought for $790,000 in 2004 after Mr. Agutin recorded a CD in Miami with guitarist Al Di Meola. "I liked it there so much I bought the apartment next to the hotel," he says. "My wife and I spend three months a year there in-between our tours."

One of Russia's biggest rock stars, Leonid Agutin owns two swank Miami condos.

In Manhattan, former Kremlin insider Boris Berezovsky bought a high-rise condo on Central Park West for $3.2 million in 2001, records show, the same year he fled Russia after clashing with then-President Vladimir Putin. A spokeswoman for Mr. Berezovsky declined to comment. Last November, Len Blavatnik, whose investments include metals, chemicals and oil, paid Seagram heir Edgar Bronfman Jr. $50 million for a townhouse off Manhattan's Fifth Avenue, just a few blocks from a $31.25 million townhouse he bought a few years earlier, records indicate. He also owns a Fifth Avenue apartment that he bought in January 2007 for $27.5 million. A spokesman for Mr. Blavatnik, who is a longtime U.S. citizen, said the two townhouses are long-term investments.

The new buyers also include other residents of the former Soviet Union. In February, Bolat Nazarbayev, an oil magnate and brother of Kazakhstan's president, paid nearly $20 million for an apartment at the Plaza condominium, according to records.

Russian buyers are "a small community -- it's the same people who have been to the same schools," says Natalia Harrison, a native Russian real-estate agent who handles international real-estate marketing and sales for Douglas Elliman Worldwide Consulting. "Once someone oligarchal goes somewhere, they all go there and follow them."

At a recent Sotheby's International Realty conference, agents discussed Russian as well as Chinese nationals as new markets for eight-figure homes, according to Washington, D.C.-based broker Daryl Judy. Arsen Gasparyan, a Russian-speaking marketer in Miami, has teamed up with the W Residences South Beach, Regalia Miami and other Miami-area developments to advertise their properties in Russian magazines.

The Russian-American Consulting Corp., a New York travel agency specializing in package tours for Russians, has helped about 10 clients from Russia look at property in the past year, says owner Andrei Shuranov. "It's difficult to attract people from the former Soviet Union because they don't know the States and it's difficult for them to get visas," says Mr. Shuranov. "But at the same time, it's growing."

In January, San Francisco-based brokers Misha Kurgatnikov and Victor Borelli met with a delegation of more than 100 Russia-based brokers representing wealthy Moscow clients interested in buying distressed luxury properties in California and Las Vegas. Michael Valdes, a broker with Miami-based SOL Sotheby's International Realty who focuses on the Russian market, says he has 14 active Russian clients, ranging from a couple shopping in Palm Beach with a budget of $20 million to $30 million to a hedge fund looking to buy condos in bulk.

Russian developers also are getting involved. Mirax Group Corp. of Moscow has invested in 13 partially completed houses at the Aqua, a New Urbanist-style development near Miami's South Beach. The $75 million project will offer fully equipped homes, including linens, flatware and towels, aimed at Moscow-based buyers. Three homes in the Aqua have sold to Russian buyers in excess of $5 million each, according to Mr. Valdes, who is handling marketing for the project. (He declined to reveal the buyers' names.)

Aqua is the first U.S. project for Mirax, which specializes in large high-rise and mixed-use developments in Moscow. It hopes eventually to be involved in developments in cities including New York, Atlanta, Chicago, Las Vegas and Aspen, Colo., says Dimitry Lutsenko, a Mirax board member, via email.

Security-related requests by Russian buyers are common, including underground parking, gated entrances and video cameras. Quintessentially Estates, a real-estate concierge service in London, has satisfied some unusual requests by Russian clients, including building a hidden helipad at a residence in the south of France, constructing an underground wine cellar with a gun safe in London, and a panic room in another English house. The firm recently opened a U.S. office in response to requests from Russian clients buying in America, says Lucy Russell, the company's managing director.

Mr. Rybolovlev, the Russian fertilizer billionaire, made headlines last month for agreeing to pay $100 million for Mr. Trump's Palm Beach house. Mr. Rybolovlev first visited a lavish Palm Beach residence that wasn't on the market but brokers said might be had for about $225 million, according to Mr. Gonzalez, the Miami broker, who showed him the house. He eventually chose Mr. Trump's estate, which has one of largest waterfront expanses on the island, because of its land value. He plans to tear down the 33,000-square-foot house and redevelop the property, say people familiar with his thinking, which likely would set a record for the most expensive U.S. teardown.

Mr. Rybolovlev, via a spokesman, confirmed last month that he agreed to purchase Mr. Trump's house but didn't respond to recent questions about his real-estate shopping, including whether he looked at the $225 million Palm Beach house.

In some cases, nearby residents haven't been pleased with the changes proposed by Russian buyers. In May, the Greenwich, Conn., planning board rejected a Russian couple's preliminary proposal to build a 27,000-square-foot house on seven acres, citing safety issues related to the amount of construction required and concern that the house wouldn't be primarily used as a residence, says the board's chairman. The land's owner is Olga Kogan, wife of Valery Kogan, a wealthy Russian who is chairman of East Line Group, which manages Moscow's Domodedovo airport. Ms. Kogan paid $18.5 million for the property in 2005, records show. It came with a 19,000-square-foot house dating to 1924. Ms. Kogan's attorney, John Tesei, didn't return calls seeking comment.

But other neighbors of Russian buyers see an upside. "What an interesting neighbor I will have," says philanthropist Lois Pope, whose Snowmass ranch is adjacent to Mr. Abramovich's. "I hear he's a wonderful person," says Ms. Pope, the widow of National Enquirer founder Generoso Pope Jr.

Ms. Pope may not be a neighbor for long: She put her property on the market about the same time as Mr. Abramovich's purchase, asking roughly the same rich price that the Russian paid, $36 million.

--Daria Solovieva contributed to this article

Please, visit the WSJ website for more photos and facts!

Delyagin, it turned out, has for some time resided on the so-called stop list, a roster of political opponents and other critics of the government who have been barred from TV news and political talk shows by the Kremlin. The stop list is, as Delyagin put it, “an excellent way to stifle dissent.” It is also a striking indication of how Putin has increasingly relied on the Kremlin-controlled TV networks to consolidate power, especially in recent elections. Opponents who were on TV a year or two ago all but vanished during the campaigns, as Putin won a parliamentary landslide for his party and then installed his protege, Dmitry Medvedev, as his successor. Putin is now prime minister, but is still widely considered Russia’s leader. Onetime Putin allies like Mikhail Kasyanov, his former prime minister, and Andrei Illarionov, his former chief economic adviser, disappeared from view. Garry Kasparov, the former chess champion and leader of the Other Russia opposition coalition, was banned, as were members of liberal parties. Even the Communist Party, the only remaining opposition party in the Duma, has said that its leaders are kept off TV. And it is not just politicians. Televizor, a rock group whose name means TV set, had its booking on a St. Petersburg station canceled in April, after its members took part in an Other Russia demonstration. When some actors cracked a few mild jokes about Putin and Medvedev at Russia’s equivalent of the Academy Awards in March, they were expunged from the telecast. Indeed, political humor in general has been exiled from TV. One of the nation’s most popular satirists, Viktor Shenderovich, once had a show that featured puppet caricatures of Russian leaders, including Putin. It was canceled in Putin’s first term, and Shenderovich has been all but barred from TV. Senior government officials deny the existence of a stop list, saying that people hostile to the Kremlin do not appear on TV simply because their views are not newsworthy.