#21 | November 6-19, 1997  

by Mark Ames

A year ago this week, a gregarious American with a taste for women and an urgent financing problem named Paul Tatum walked out of his office for the last time. Just a block away from the Radisson Slaviyanskaya hotel where he'd made his name, someone fed up enough to set a new precedent in crime shot him 11 times and disappeared without a trace. For Russians it was just another unsolved murder, but for Westerners, it was a Message with a capital "M." Foreigners who chose to walk the tightrope here would now have to go without the safety net. Tatum's death was the first echo back telling us that it really was a long way down.

A few years ago, a Western passport was a license to do just about anything in this city. If you had one, you didn't need, for instance, to run your own hotel to pick up women. All you needed to do was show up with an accent at a bar. Westerners had the most cherished of advantages, the benefit of the doubt. In the commercial world, there were too few Russians who knew the world's financial language well enough to call a Westerner's bluff. And as the army of USAID consultants who arrived in town back then proved, talk, for a Westerner, was anything but cheap. It was a huge and profitable industry.

But sleight-of-hand can only take you so far. The Tatum case proved that. Eventually you have to cough up money or results-or get the hell out of the way. And the smart ones have done so.

A few foreigners, however, are still trying to trade on the respectability of their native countries. Many of them are people who've realized they have more credibility here as a Westerner than they do at home, as just another geek with a spotty resume. And so they squeeze their way into Russia's heavy hitting crowd and go to sleep every night praying that they don't get found out before they get rich. We all know people like this: it's a typical story. But only seldom does one of these stories unfold in public. A year after Tatum, we've got another one in the making. It's the story of a failed expat publishing project called Time Out.

Next week, a fiasco-riddled nightlife magazine hits the Russian kiosks, marking the bizarre, Nixon-like comeback of one of Moscow's most well-known expats. Andrew Paulson, an American previously known as the publisher of Ponedelnik-the biggest flop in modern Russian print media history-marks his triumphant return with the publication of a new Moscow nightlife directory magazine, Vechernaya Moskva, on November 13th.

However, Paulson's triumph is already mired in controversy and failure. As he prepares for publication, huge questions have arisen about his relationship to the large Russian bank which he claims backs him, and the prestigious Western magazine that he'd aimed to bring to Moscow. Vechernaya Moskva-hitherto the name of a local newspaper popular with pensioners-was supposed to be called Time Out Moscow. As in the hip, trendy London/ New York nightlife directory magazine, and not the pensioner newspaper. The buzz about Time Out Moscow had been building since late spring, even earning a mention in Newsweek's cover story on Moscow two months ago.

Many who knew about Paulson's Ponedelnik debacle were baffled by his apparent comeback, leading to predictions of imminent failure. It wasn't a question of whether Paulson would pull off the Time Out trick, but how he got so close, and when it would collapse. And "they" were right: Time Out collapsed before the first issue, beating out even the most cynical predictions.

"Well, this seems to be the story of life for this guy," said Independent Media chief Derk Sauer, when asked about the Paulson/Time Out debacle.

Among the many riddles surrounding next week's Vechernaya Moskva debut, the first and most obvious question that that no one can seem to explain is how Paulson managed to return to Moscow alive, and how, in spite of his previous failures, he was able to position himself for yet another public flop with Time Out.

Already, Paulson is finding himself in a squeeze. On one side, he has left Time Out shocked and embittered, and may have seriously damaged his reputation with Western publishers as rumors of lawsuits, which Time Out refuses to comment on, swirl; while here in Moscow, his alleged backers, the Bank of Moscow, are publicly cutting Paulson loose.

"We have never heard of this 'Andrew Paulson' that you speak of," said Bank of Moscow press secretary Pavel Matyukhin on the Thursday prior to the publication of this issue. "I don't know who he is, and I haven't heard anything about this 'Time Out' either."

We offered Matyukhin several opportunities to consult with bank authorities about Paulson, in the unlikely event that he'd never heard of their most high-profile Western representative, but each time I was assured by Matyukhin that the bank has never heard of Paulson or Time Out. The eXile offered to call back later in the day if he needed time to inquire, but Matyukhin was unequivocal about Bank of Moscow's official position on "this 'Andrew Paulson'": "We don't know him, and we've never heard of him."

Furthermore, the press secretary denied that Bank of Moscow owned Vechernaya Moskva, in spite of the fact that Paulson told the eXile that VM Buro, which owns Vechernaya Moskva, is wholly owned by the Bank of Moscow. The most that Matyukhin would concede was that Bank of Moscow and Vechernaya Moskva had participated in "joint projects."

Paulson's credibility in his negotiations with Time Out, and, prior to that, his failed negotiations with Vogue, hinged on his alleged relationship with the Bank of Moscow.

Lamming Aldrich, the publishing consultant to the Time Out Group, faxed a copy of a letter from the Bank of Moscow president Andrei Borodin in which Paulson was named as an employee of ZAO Press Magnat, a Bank of Moscow subsidiary, as well as a representative of the Bank.

Paulson himself seemed unsure of his role when asked last Friday. At first he said, "I work for the Bank of Moscow." When asked what his title at Bank of Moscow was, Paulson hesitated for several seconds, then changed his mind. "I take it back. I don't work for the Bank of Moscow. No, I don't. I work for VM Buro-I'm the president of VM Buro, which is owned by the Bank of Moscow."

Just this past Monday, after confronting Matyukhin with the letter from his boss, he changed his tune. "I said that I personally didn't know who Paulson was, but I've heard he has something to do with the bank. I'm not sure what he does. Of course, when I see him in the halls, I say hello, but otherwise I don't know him."

When Paulson was told that the Bank of Moscow's press secretary denied knowing who he was and denied that the Bank of Moscow owned Vechernaya Moskva, Paulson responded with surprise. "I just spoke to Matyukhin yesterday!" Later in the interview, Paulson proposed that "not everyone in that organization could know everyone else." Not even the press secretary? "Come on," Paulson nervously replied. "This is... this is petty stuff."

When the bank you claim to represent at first denies ever having heard of your name, it's hardly petty stuff. Could this be the beginning of the end of Ponedelnik II?

"I'm sure you're going to fuck me in your article," Paulson told the eXile. "I wish you'd wait until Vechernaya Moskva came out before printing it.."

The story of how Paulson not only managed to slip into Moscow alive, but how he was able to turn defeat to advantage and re-ingratiate himself into to the upper echelons of Moscow's-and the international-publishing world, however fleetingly, is one of the great mysteries that, as we found out while investigating this piece, only got murkier the deeper we dug. But what makes this story more broadly relevant is that it is one of the most glaring examples of how an expatriate with no qualifications (or in Paulson's case, a disastrous track record) can take advantage of local inefficiencies to launch himself into a position well beyond his capabilities... and how ultimately, reality arrests even the best hucksters, leading to disastrous consequences for everyone involved.

Andrew Paulson had never held a real job in his life before arriving in Moscow a few years back. A graduate of Yale University, he'd worked as a fashion photographer, a theater actor, and a failed writer, spending several years hanging around the fashion world in Paris. When he reached his mid-30s, he decided to make a change. While the West is mercilessly cold to late-starters, Russia offered Paulson a chance to reinvent himself-a story familiar to many of us here. Using what friends and enemies alike refer to as Paulson's famous "gift of the gab," he attached himself to the Russian business magazine, Deloviye Lyudi (whose deputy director general, Vadim Biryukov, was burned, beaten and mutilated in his garage earlier this year), although in classic Paulson fashion, his role/title there was never clear. Paulson redesigned the magazine and tried to restructure the business end, which ended in failure and his abandoning the project.

Paulson spent most of 1995 tirelessly putting together Ponedelnik, which was intended to be an Economist/ Newsweek style magazine for the Russian market. The publication hit the newsstands in early 1996, and collapsed three issues later when the investors decided that the project had no chance of living up to its promise. They pulled the plug rather than invest more, and Paulson, for reasons still unclear, quickly slipped out of Russia, leaving behind a slew of sinister rumors about bloodthirsty enemies and angry investors.

Steve Shaw, who was the business manager for Ponedelnik, believes that the investors made the right decision. "Our revenues were so low that we couldn't even cover the variable costs by issue four. The investors expected a quick return, and they weren't going to get it. They made a totally reasonable decision."

The only person we spoke to who disagreed with the investors' decision is long-time Paulson friend John Bonar, who consulted for Ponedelnik. "I think it was a shame that the investors pulled the plug so early," said Bonar, who himself publishes a little-known advertorial magazine, Marketing Russia, here in Moscow. Bonar, incidentally, also strongly believes in the Vechernaya Moskva project. "I don't see any problems with it," he said.

The big problem is that Vechernaya Moskva was supposed to be Time Out Moscow. At least, that's what people in Moscow-from Paulson's staff to potential clients to the local publishing community-were led to believe. As it turns out, the relationship with Time Out London is yet another murky piece of the Paulson publishing puzzle.

"It was only supposed to be a consulting agreement with Time Out," Paulson said. "It was never going to be called Time Out Moscow."

Time Out's Fiennes essentially agreed. "We were to begin as consultants, with the aim of eventually developing a Time Out nightlife directory in Moscow."

And although Paulson denies that Vechernaya Moskva ever intended to become Time Out Moscow, present and former staff member saw things differently. Even Vechernaya Moskva's Sales Manager, Dasha Grigorieva, commented, "Of course when we were called Time Out, it was easier to sell the magazine to clients. Now, at least in the beginning, it's a little harder. Advertisers knew the Time Out name."

"We knew that Paulson was using the Time Out name all over Moscow," Fiennes said, "but we figured there was nothing we could really do about it."

Paulson would not comment on why he cancelled the Time Out contract signing at the last minute, while the Time Out London people would only say that they were "shocked by the eleventh hour decision." After six months of tortured negotiations, and one day before the Time Out people were to fly to Moscow to sign the contract, Paulson called London to tell them that the deal was off.

"I can only say that the timing was unfortunate," Paulson admitted. "The problem was the slowness of the [Bank of Moscow] bureaucracy. And I had to abide by their decision."

Sources close to the deal say that, at least on the surface, two factors led Paulson to cancel the Time Out deal. First, the London publishers allegedly wanted too much money for the contract, making the venture unprofitable. However, this seems unlikely, given that Paulson's mandate with the Bank of Moscow was to bring on board a prestigious Western publication, and given that Paulson admitted that even Vechernaya Moskva isn't supposed to turn a profit for 18 to 24 months.

A more likely scenario deals with the issue of representation and control. As part of the "consulting" contract, Time Out demanded to have one of their own on the ground in Moscow as a "consulting editor." Their choice was John O'Mahoney, a St. Petersburg resident who, besides having written for Time Out London for four years, has also contributed to the Guardian, the Observer, and even the Moscow Times. Paulson objected to O'Mahoney, claiming he was unqualified, even though the decision was Time Out's. Instead, Paulson first tried to foist former Moscow Times business review editor Simon Baker as Time Out's consulting editor, and later, he is said to have actually hired a 23-year-old Russian woman with no prior publishing experience, as Time Out's consulting editor.

"I think the reason he objected to me is very obvious," O'Mahoney said. "He knew he couldn't control me or what I'd have to tell Time Out London about his project."

Paulson cancelled the Time Out deal only four days after Time Out appointed O'Mahoney. The big question now is, given the revelations about Paulson's murky relationship to the Bank of Moscow, and given the allegations about his varying representations about Time Out Moscow, why would Paulson have feared allowing Time Out to appoint their own consulting editor in a consulting agreement?

The answer seems to be precisely this: the murk would have cleared, exposing truths that may have been damaging. And that, as his troubled history here shows, is what is most dangerous.

What is striking about the Paulson story is how many people feel burned, and how many were willing to go on record with potentially damaging information-unusual for a business story. And although he isn't down for the count, he is clearly teetering, having seen Time Out, and the attendant prestige in publishing it, collapse under his feet. The lessons that other expats can draw are two-fold: on the one hand, expats seem to get away with a lot more here in Russia. Tatum probably would have been shot three years earlier, Michael Bass would have been transferred from Lompoc minimum security to Soledad, and Paulson would never have published anything more than a wacky home page on the internet. On the other hand, Tatum's dead, Bass lately is pressing forward with a very tricky assault case, and reality seems to be catching up quick with Paulson.

When you consider that this time around, Paulson's bed pals aren't a struggling Russian magazine and a few foreign investors, but rather a high-profile English publishing house and a powerful Russian bank, it doesn't take too much to imagine what the consequences of failure this time around could be. Russia may be forgiving at first, but this is still planet earth, and the basic rules apply: if you screw people over, you're bound to get it back in spades. Not because of any Dickensian moral structure, but rather, because in the end, the Paulsons, Tatums and Basses just aren't as sophisticated as they imagined themselves to be. Otherwise, hell, they'd never have had to come here in the first place.