A Trio of Wealthy Russians Made an Enemy of Putin. Now They’re All Dead.

By Alan Cullison

Oct. 10, 2018 10:23 a.m. ET

Nikolai Glushkov, a close associate of the late oligarch Boris Berezovsky, was preparing to testify that Aeroflot was a corrupt instrument of Russian intelligence

LONDON—Nikolai Glushkov, a Russian émigré, lived alone in a weather-beaten row house in South London with an aging dog and a cat named Braveheart. It was the waning days of March, and he was readying himself for something big.

The onetime finance director of Russia’s flagship airline, he was preparing for a trial in a London court. He told friends it would prove his innocence of longstanding financial charges by Russian authorities and expose Aeroflot Russian Airlines as a front for Russian security services. The case could also prove embarrassing for President Vladimir Putin, by illuminating a piece of post-Soviet history the Russian government has tried to erase.

After running out of funds to pay his own lawyers, Mr. Glushkov, 68 years old, planned to represent himself, and had amassed tomes on British law and forensic accounting. “This case was his purpose in life,” said Georgy Shuppe, a friend and former business partner. “He was not going to give up.”

On the eve of a preliminary court hearing, Mr. Glushkov stopped answering his phone. When his daughter drove to his house to investigate, she found him inside, strangled to death with a dog leash. Later that night, dozens of antiterror police cordoned off the house and began digging holes in his yard.

In Russia, his death was portrayed by state-controlled media as a homosexual tryst gone wrong. British police are treating it as a murder investigation. In August, they posted video footage of a black van seen near his home the night he was strangled, asking anyone with information to get in contact.

Mr. Glushkov’s death has sent a strong message to Russia’s émigré community. He was part of a trio of once-powerful Russians who, after amassing fortunes during Russian privatizations, helped build the political system that brought Mr. Putin to the presidency. After falling out of favor, the trio fled to England and tried to mount opposition to their former protégé, only to see their efforts disrupted by untimely deaths and costly litigation.

Their leader, Boris Berezovsky, was found hanged in a bathroom of his house in Berkshire, England, in 2013, in a death that was initially called a suicide but now police are investigating anew. Mr. Berezovsky’s longtime security assistant, former Russian security officer Alexander Litvinenko, was killed in 2006 by a fatal dose of the radioactive isotope polonium-210, a murder the U.K. blamed on Russia. Another partner, Badri Patarkatsishvili, died of a heart attack in 2008, in what police have deemed natural causes.

Mr. Glushkov, Mr. Berezovsky’s right-hand man, was the last alive.

His death happened one week after the nerve gas poisonings of a former Russian spy and his daughter in Salisbury, England—an attack the British and American governments have pinned on two alleged Russian agents. The Kremlin denied any involvement in this and other assassination attempts and the men say they were innocent tourists.

The central issue in the Glushkov case was Aeroflot’s claim that the Russian and his partners, after gaining a foothold in Aeroflot management during privatizations, looted $120 million from the company.

In written statements, Aeroflot spokesman Andrey Sogrin said Aeroflot “is not today, nor was it ever, a ‘paymaster for Russia’s security services.’ ”

He called Mr. Glushkov a “fraudster” who was convicted in Russia “of an elaborate scheme to divert huge sums of Aeroflot’s foreign currency into the Swiss bank accounts of companies he controlled.”

Mr. Sogrin said that Aeroflot had nothing to do with his death, adding that “if he had lived” Mr. Glushkov “would have faced a substantial civil judgment in England, as well.”

Mr. Glushkov maintained that Aeroflot’s claim against him was absurd and that the entire case, which wound its way through the Chancery Division of London High Court for years, was a pretext for Russian authorities to harass him.

The pretrial court filings, including a 51-page witness statement viewed by The Wall Street Journal, show he intended to respond by reopening chapters of 20-year-old Russian history that are sensitive for the Kremlin and Russia’s security services.

Over the years, the Kremlin has reshaped the story of Mr. Putin’s rise to power, stressing his role as a disciplined KGB careerist who rescued the country from oligarchic billionaires who looted the national wealth after the Soviet Union collapsed.

Through government-controlled news outlets and film documentaries, Moscow has largely erased suggestions that Mr. Putin was helped to power by anyone more powerful than himself—such as Mr. Berezovsky, Mr. Glushkov’s business partner, who helped promote Mr. Putin and knew him personally.

A former mathematician, Mr. Berezovsky built a fortune in the final years of the Soviet Union through an auto dealership called Logovaz, and used his wealth to amass political power. After the country’s dissolution in 1991, he gained control of Soviet-era industries through tainted privatization auctions and political influence, amassing a financial empire that spanned automobiles, oil, media, and Aeroflot, the national airline. He set up his Moscow headquarters in a Tsarist-era palace known as the Logovaz mansion, where high-level government officials waited to meet him in the anterooms.

In 1996 Mr. Berezovsky teamed up with other oligarchs to bankroll the successful campaign of incumbent President Boris Yeltsin so he could face down a challenge from Russian communists. In 1999, when Mr. Yeltsin anointed Mr. Putin as his successor, Mr. Berezovsky and his allies helped vault him from virtual obscurity to national prominence by providing fawning coverage of his presidential campaign on ORT, the television network Mr. Berezovsky once controlled, and cobbling together a political party, Unity, which served as Mr. Putin’s springboard.

Rivals accused Mr. Berezovsky of funding his political projects by siphoning billions of dollars from companies he gained control of during privatization, a charge Mr. Berezovsky denied. Through most of the 1990s, Mr. Glushkov was known as Mr. Berezovsky’s right-hand man in managing these enterprises, including the country’s largest auto maker, AvtoVAZ, and the national airline, Aeroflot.

Mr. Putin soured on the oligarchs as he built the top-down political system that he dominates today, joining forces with security-service allies to take over key businesses. Maria Litvinenko, widow of the poisoned Mr. Litvinenko, said in an interview her husband believed Mr. Berezovsky’s takeover of Aeroflot ultimately destroyed him and his allies because he made so many enemies in the security establishment.

The airline, Ms. Litvinenko said her husband told her, was a centerpiece of the Russian spy services, which since Soviet days had used its global network of offices and air routes to provide payroll for its agents around the world, as well as shipping clandestine cargoes. “Aeroflot was the center of it all,” she said—an allegation that Mr. Glushkov also intended to air in court.

Mr. Glushkov told his side of the story in a witness statement and other documents related to the court case viewed by the Journal.

In his statement, Mr. Glushkov said a friend introduced him to Mr. Berezovsky in 1989, during the perestroika policies of the former Soviet Premier Mikhail Gorbachev, who allowed Russians to set up their first businesses for profit. Mr. Glushkov, who worked at the Soviet Ministry of Foreign Trade, knew the bureaucratic hurdles of setting up a company. Mr. Berezovsky persuaded him to join Logovaz.

The job quickly landed Mr. Glushkov in corporate battles. In 1991 he was appointed deputy managing director of AvtoVAZ, which since Soviet days pumped out an estimated 300,000 cars a year, most of them based on decades-old designs.

He moved from Moscow to the auto behemoth’s headquarters in the Russian provincial city of Tolyatti, where he said he clashed with members of Russia’s security apparatus embedded at the firm. The company, he said, sold cars cheaply to foreign companies controlled by former Soviet officials, who were allowed to resell them and pocket the profits. Years later, Russian prosecutors alleged that it was Mr. Berezovsky who misappropriated funds at the firm.

Mr. Glushkov cracked down on the practice, he said in his court statement, and began to receive threats that he would be made to “disappear” or that his family could be harmed. He sent his wife and children to live in Switzerland, and two years later, after receiving an “extremely severe” threat from an FSB colonel in Tolyatti, he quit the company and left for Moscow the next day.

Colleagues said Mr. Glushkov arrived looking pallid and fatigued, with years of heavy drinking and stress having taken a toll. They would later learn that he was suffering from a debilitating genetic condition, hemochromatosis, that led to an iron overload in the blood, damaged his internal organs and subjected him to severe arthritic pain.

He continued to work for Mr. Berezovsky, and threw himself into management in 1995 of Aeroflot. Mr. Glushkov was appointed deputy director for finance—and, he said, landed in a fight similar to the one at AvtoVAZ, only on a larger scale.

BUMPY RIDE

A Trio of Wealthy Russians Made an Enemy of Putin. Now They’re All Dead.

· 1923: Aeroflot’s predecessor, dubbed the Voluntary Air Fleet, begins the first passenger service between Moscow and Nizhnynovgorod.

· 1932: Officially named Aeroflot, the company supports domestic industry by acquiring Soviet-made aircraft.

· 1940s: Aeroflot becomes a backbone for Soviet forces fighting the invasion by Nazi Germany, ferrying troops into besieged battlefronts.

· 1950s through 1970s: During the Cold War, Aeroflot aggressively expands domestic and international service, opening up routes to five continents.

· 1990: The Guinness Book of World Records names it the largest airline in the world.

· 1991: With the fall of the Soviet Union, the company downsizes drastically as former Soviet states inherit Aeroflot’s aircraft and routes.

· 1992: Boris Berezovsky acquires minority stake during privatization and inserts managers. Nikolai Glushkov serves from 1996 through 1998.

· 2018: Still 51% owned by the government, Aeroflot reports growing revenues after acquiring domestic competitors, operating across 51 countries.

When he joined the company, it was flying toward obsolescence. Its fleet of Soviet-made aircraft were too noisy and dirty for Western capitals. A year earlier, one of Aeroflot’s pilots had allowed his 16-year-old son to sit at the controls of a Hong Kong-bound plane, which crashed in southern Siberia, killing everyone on board.

Mr. Glushkov launched a review of the company’s finances, and found, as with AvtoVAZ, headquarters had little control over revenues. Money from ticket sales drained into hundreds of bank accounts controlled by about 150 regional offices, Mr. Glushkov said in a witness statement. About 3,500 of the company’s 15,000 employees worked undercover for one of the branches of Russian intelligence services, he said.

Mr. Shuppe, his former colleague, said Mr. Glushkov wanted to mold Aeroflot into a national airline like Germany’s Lufthansa or British Airways, with a centralized payments office located outside Russia to reduce its tax burden. In early 1996, he called a meeting of Aeroflot’s representatives from around the world with an eye to channeling revenue into companies in Switzerland.

Reaction from the security services was swift, he said in his witness statement. In his office, he said, he received calls daily over a special telephone installed for talking with security-service chiefs. One of them, Alexander Korzhakov, a former KGB general and President Yeltsin’s bodyguard said he would “screw my head off” and “put me in jail…if I continued to violate the rights of the FSB,” Mr. Glushkov said in his witness statement.

Mr. Korzhakov, reached by telephone in Russia, denied threatening Mr. Glushkov, but called the former Aeroflot director a thief who stole “tens of millions” from the company on behalf of Mr. Berezovsky.

Mr. Glushkov pushed ahead with the plan to get control over revenues, and wrote letters to the heads of Russia’s two main spy services suggesting they pay salaries at Aeroflot, given how much they use the company. He said the company’s balance sheet improved immediately.

In 1997, Russian prosecutors opened a criminal investigation into financial irregularities at the airline. Mr. Berezovsky fled the country after the election of Mr. Putin as president in 2000 and prosecutors said he, too, was a suspect in the Aeroflot criminal case. Mr. Glushkov remained in Russia but, sensing he might be arrested soon, gave an interview to Russia’s Kommersant newspaper, defending his work.

“What prosecutors are saying is simply nonsense,” he said, noting that investigators said he was suspected of misappropriating nearly $700 million—more than half of the company’s revenues while he worked there.

He was arrested the following month on charges of money laundering and illegal business activity, and was confined in Moscow’s Lefortovo Prison, a facility reserved for high-profile political prisoners and criminals.

In Switzerland, officials froze assets of companies he managed, and eventually sent $52 million back to Russia.

Mr. Glushkov said conditions were dire in prison. His health worsened, and he collapsed at one court appearance. In 2004, a judge sentenced him to time served, and after his release he made his way to London, where he joined his erstwhile partners who had moved there in exile.

They welcomed him back and put him in a mansion in the upscale London suburb of Berkshire with an 11-acre pond and servants. But Mr. Glushkov had difficulty adapting to his new surroundings, his friends said.

Michael Cotlick, a lawyer for Mr. Berezovsky, said Mr. Glushkov hungered for another company to manage. Mr. Berezovsky had none to offer. He was also suspicious of some of Mr. Berezovsky’s entourage and visitors in London. One of them was Andrei Lugovoi, who in 2006 slipped some radioactive polonium into the tea of Mr. Litvinenko in a Mayfair restaurant, London police say.

In an interview with the Journal after the poisoning, Mr. Glushkov said he had never trusted Mr. Lugovoi and had tried to warn others about him. He blamed Mr. Lugovoi for helping get him imprisoned in Russia. Mr. Lugovoi has denied any involvement.

Aeroflot, back under Russian government control, hired the U.K. law firm Pinsent Masons and sued Messrs. Glushkov and Berezovsky in a London court, seeking $120 million. At first, Mr. Berezovsky paid the legal bills but soon he, too, began to run out of money. His longtime partner, Mr. Patarkatsishvili, died suddenly of a heart attack in 2008. Mr. Berezovsky lost a lawsuit against another Russian oligarch, leaving him with hefty legal bills. In 2013, Mr. Berezovsky was found hanged in his bathroom in his home outside London.

Mr. Glushkov’s own fortunes sank along with those of his partners, Mr. Cotlick said, and to save money he moved out of his estate, eventually landing in a rented row house, where he planned his legal strategy against Aeroflot.

He began to appear upbeat, despite a resurgence of the hemochromatosis that left him hospitalized and damaged his legs, said Elizavita Berezovskaya, daughter of his deceased business partner. He felt he was winning in court. Mr. Glushkov and another defendant in the case had amassed financial records they said proved there was no malfeasance at Aeroflot under his watch. The judge overseeing the case, Dame Vivien Rose, refused a motion by Aeroflot lawyers to have the trial delayed.

Among the witnesses Mr. Glushkov looked forward to cross-examining: Mr. Korzhakov, the former KGB general, and other security service personnel who worked at Aeroflot.

His neighbor, Pat Browne, helped look after his house when Mr. Glushkov was hospitalized. The last time she saw him was a few days before his death.

I heard him yell ‘Pat!’ and I looked up and there he was smiling and waving a cane at me,” she said. “He was so proud that he wasn’t using crutches anymore.”

Police say they found no sign of a break-in at his home the night he died. Ms. Browne said she heard no sound of a struggle.

He was expected in court the next morning, and a transcript of proceedings shows the judge and attorneys were puzzled at his absence. An attorney for Aeroflot told the judge that “I was expecting to see Mr. Glushkov but I do not see him.”

The judge sent a bailiff into the hallway to shout “Aeroflot” and “Mr. Glushkov” to see if anyone responded. There was silence.

In death, Mr. Glushkov enjoyed some measure of vindication. After the airline dropped the case in April without explanation, Judge Rose ordered Aeroflot to pay more than £3 million ($3.9 million) to compensate Mr. Glushkov’s estate and other defendants for their court costs. She said that after eight years of litigation the airline had apparently folded its hand because “Aeroflot and its advisers realized that their case was doomed to fail in its entirety.” Mr. Glushkov, she said, “had struggled to defend himself against what he saw as a politically motivated campaign of persecution by Aeroflot and the Russian state.”

Write to Alan Cullison at alan.cullison@wsj.com

Appeared in the October 11, 2018, print edition as 'Trio of Putin Foes Meet Death in U.K..'