Mikhail Prokhorov walking fine line as US-Russia crisis intensifies

ONEXIM

When Mikhail Prokhorov agreed to buy the Nets in 2009, Russia's then president, now prime minister Dmitry Medvedev broke the news to President Obama at the United Nations, where the two were gathered at the UN General Assembly's annual meeting of world leaders. Medvedev, knowing Obama is a big NBA fan, portrayed the purchase was seen as a way to better US-Russia relations.

Now, relations between the US and Russia are at a post-Cold War low following Russia's re-acquistion of Crimea and threats to Ukrainian sovereignty in the mostly Russian east of that country. And Prokhorov has to balance his Russian patriotism and his liberal policies against the possibility of US sanctions that could very well affect him and his businesses, including the Nets.

Prokhorov is no longer just an oligarch, a playboy, a sportsman --the "most interesting man in the world."  He is a politician, having run unsuccessfully against Vladimir Putin in the 2012 presidential race. In that election, he pressed for more openness in the Russian political system, pushed for economic reforms, including a proposal for Russia to join the European Union and forsake its special status. He separated himself from some of Putin's ultra-nationalist policies and later condemned the country's "gay propaganda" laws. He also invested $100 million in the Russian Biathlon Union in advance of the Sochi Olympics. How independent of Putin he is remains debatable, but on the Russian spectrum, he is a liberal.

Now, he is caught in the middle. As US officials note, he has never been personally close to Putin. His ties to the Kremlin are broader. It may not matter. As a Russian patriot, he is duty bound to support the Motherland.  As tensions mount, he's the only oligarch, only one of the economic elite, to publicly speak out, but in politically muted and oh-so-balanced tones.

Before the crisis blew up with the Crimean vote to re-join Russia on March 16, he blogged about the need for an open dialogue with the West on Ukraine.  He suggested back on March 3 that there would be economic implications and deeper human ones. Then, in a series of statements that symbolized his balancing act, he first said he was surprised at how long the transfer of the Nets to a Russian entity was taking, then backed off, suggesting it may take place or it may not, meaning it is not a priority.

Meanwhile, Irina Prokhorova, who runs her brother's foundation and now heads the political party he founded. has been in the vanguard of Russian intellectuals attacking the Putin government's recent crackdown on the media and academia. She told US-based Foreign Policy Magazine this week, "In an instant, we suddenly seem to be living in a completely different country, a country where freedom of speech and human rights are dying ... We’re the real patriots, people who have spent decades creating useful and truly beautiful institutions for our country."

On Thursday, Prokhorov himself penned an op-ed on Russia's need to reform itself if it wishes to have political success against western economic pressure. He did specifically approved or disapprove of the country's policies on Ukraine. In fact, he did not use the word, "Ukraine" at all.  Kommersant, the Russian business publication that published his column, described Prokhorov's point this way: "This challenge for the Russian economy [is] an opportunity to solve many long-standing issues and thus have a chance at a major breakthrough."

Prokhorov, as he did in the 2012 campaign, lays out problems in the Russian economy that make challenging the West risky and how to fix them. He uses the term "economic mobilization."  Is his position enough to satisfy Putin and the Kremlin?  Will they demand more of him?  Will they move against his sister or other intellectuals as a warning to her ... and him? Or the other hand, will blanket US sanctions make business more difficult for him and other oligarchs whether they are targeted as a group or individually?  It is uncertain but troubling. We are unlikely to see him in the playoffs. Best he avoid reporters' questions on the territory of Russia's main adversary.

As the playoffs play out in Brooklyn Toronto and (hopefully) elsewhere, there will be all manner of discussions about the team's present and future. But over the course of those same weeks and (hopefully) months, there will be another scenario playing out in Moscow and Washington that could affect the team as much or more than their playoff success ... and it will be just as hard to predict.

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