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WikiCable: Did ‘creepy’ Russian put the arm on Cal?

By Richard Brenneman
Monday September 12, 2011 - 11:43:00 AM

When we ran the name “Berkeley”through Cable Search, the nifty web tool that lets users troll through the WikiLeaked State Department cables, we came up with a grand total of 142 hits, many of them referring to Cal grads who’d gone on to bigger and better things. 

But one cable really caught our eye, a CONFIDENTIAL 5 February 2007 dispatch from Ambassador William J. Burns in Moscow, reporting on the strange behavior of a powerful Russian official who tried to put the arm on a representative of UC Berkeley’s Haas School of Business. 

The focus of the firestorm was Russia’s leading management school, described thusly on its website


The Graduate School of Management (GSOM) is a part of St. Petersburg University, the oldest institution of higher education in Russia. GSOM was created in alliance with the Haas School of Business, University of California at Berkeley in 1993.
(And as a possibly relevant aside, UC Berkeley plutocratic professor David J. Teece , who directs the Center for Global Strategy and Governance at Cal’s Haas School of Business, also chairs of the St. Petersburg business school’s International Academic Council.) 


The Burns document is posted online here. It’s short enough that we’ll dispense with the usual extract. 


C O N F I D E N T I A L MOSCOW 000468 VZCZCXYZ0000 RR RUEHWEB DE RUEHMO #0468 0360642 ZNY CCCCC ZZH R 050642Z FEB 07 FM AMEMBASSY MOSCOW TO SECSTATE WASHDC 7154 C O N F I D E N T I A L MOSCOW 000468 SIPDIS SENSITIVE SIPDIS E.O. 12958: DECL: 02/02/2017 TAGS: PINR PGOV RS SUBJECT: BIO NOTE: YURI MOLCHANOV, ST. PETERSBURG VICE GOVERNOR FOR PROPERTY AND LAND ISSUES, INVESTMENTS, STRATEGIC PROJEC... 1. (SBU) The following message was drafted by St. Petersburg CG Mary Kruger. Begin text: 2. (C) During the November 2006 inauguration of the newly-opened premises of the St. Petersburg State University School of Management, an American academic long associated with the school told CG about Vice Governor Yuri Molchanov's “sinister” presence in their dealings. 

3. (C) The Haas School of Management at U.C. Berkeley has nurtured the development of a new St. Petersburg School of Management since 1993. In addition to academic exchanges and curriculum development, representatives of the Haas school led a unique fund-raising campaign which collected $6.5 million in private U.S. and Russian funds to entirely renovate a dilapidated building for classroom use. As steward of the funds, which included a whopping $1 million from U.S. citizen Arthur B. Schultz, the Haas School kept close tabs on all expenditures. At one point in the early 1990s, when lenders were sought to renovate the old building, Vice Governor Molchanov's private construction firm placed a bid. As the only local bidder and as a close associate of the now Dean of the School of Management, Molchanov apparently expected to win the tender. He did not. This provoked an angry response in which he demanded compensation from the Haas School representatives for the costs of preparing his bid. While the Haas School did not comply with his demand, they did find a way to mollify the Vice Governor, who “was always present at all our discussions”, according to the American source. “He gave me the creeps.” Although the source did not describe any specific intimidation, it was clear that the Americans experienced some degree of fear - a not unreasonable reaction in 1990s Russia. 

4. (C) Vice Governor Molchanov is widely rumored to be corrupt, enjoying a convenient intersection of interests between his construction company and his position in the city government. He played a very visible role in the School of Management inauguration alongside Governor Valentina Matviyenko and President Putin. BURNS 



Just what the school did to mollify Molchanov remains an open question. The only mention of him on the Russian university’s website is as one of seven judges in a 23 November 2000 student business plan competition. His name doesn’t appear in a search of UC Berkeley’s website.