How the Mighty Fell.(The Oligarchs: Wealth and Power in the New Russia)

Russia's oligarchs were outsiders who became the ultimate insiders. Some of them started off as furtive traders in contraband goods. A few years later they morphed into multimillionaires, emerging from their lavish villas and chauffeured Mercedeses to call the shots at the highest levels of government. Then came the punishment for their hubris. The economy collapsed and their former friends in high places turned against them. These days some of them are back on the outside, tasting the bitter fruits of exile.

In terms of sheer drama, it's an irresistible tale, and David Hoffman's new book, "The Oligarchs: Wealth and Power in the New Russia" (564 pages. PublicAffairs), milks it for all it's worth. He's right to do so. You just can't tell the story of how Russia staggered from the centrally planned command economy to the imperfectly market-driven business world of today without dwelling on the exemplary fate of characters like Alexander Smolensky. As Hoffman (full disclosure: a former colleague and friend of mine) describes him, Smolensky was a "rebel against the system" who ran afoul of the Soviet authorities in the early 1980s for printing black-market Bibles. As Mikhail Gorbachev began edging the Soviet Union away from socialism, Smolensky amassed a fortune by building private houses for the Communist Party elite. By 1997, he had put together Russia's biggest private banking empire--only to see it crumble in the wake of the 1998 crash.

But like most of his oligarch colleagues, Smolensky had already moved the money into other, less vulnerable companies, salvaging much of his fortune but leaving his investors--ordinary Russian depositors as well as Western business partners--in the lurch. As Hoffman writes, when Smolensky is interviewed about the mess, the diminished tycoon says unrepentantly that anyone who was stupid enough to put money in his bank deserved "dead donkeys' ears."

The leading characters in this book make Donald Trump look tasteful, unassuming and well-behaved. Soviet mathematics professor Boris Berezovsky survived a gangland assassination attempt to appoint prime ministers and bend Boris Yeltsin's entourage to his will. Finally, at the peak of his power, he ran afoul of his protege, Vladimir Putin, who unleashed a flood of corruption charges that soon drove the magnate into luxurious London exile. Small-time theater director Vladimir Gusinsky built up the new Russia's most formidable media empire, but ...