0:00

Hi, this is Andrew and

0:02

this is Keynote, the

0:05

daily now.tv chat

0:07

show with some of the world's leading

0:10

thinkers and writers.

0:16

Hello everybody, it's June 6th,

0:18

new book day, Tuesday 2023, and we're

0:20

having a new Russia

0:23

fiction

0:26

and fact book day. Earlier

0:28

today I talked with Paul Goldberg, who

0:31

has a new novel out, the so-called Crime

0:33

and Punishment for the Jews, a book called The

0:36

Dissident, which is very much built on

0:38

a real story in 1976 of

0:42

a visit to Moscow by the

0:44

then Secretary of State,

0:47

a certain Heinz Alfred

0:50

Kissinger, otherwise known as Henry

0:52

Kissinger. I had

0:55

Paul Goldberg on the show, Henry Kissinger,

0:57

who was 100 earlier this month, wasn't

1:00

available, but

1:02

today we're, a little bit later,

1:04

we're reversing things. There's another

1:07

book out about another real

1:09

event in Russian history, it's

1:11

by an author called Josh Haven,

1:14

it's called The Siberia Job,

1:16

it's a book in fictional terms about

1:19

a Texan businessman called John Mills,

1:21

who in 1994 was sick

1:24

of London,

1:25

sick of banking, and homesick for

1:27

Texas, so he abruptly

1:29

quits his job with an investment bank, buys

1:32

a plane ticket to Dallas, but a chance encounter

1:34

with a slick check

1:36

turns his life upside down and takes

1:38

him on a wild and sometimes scary escapade

1:42

to Siberia. As it happens,

1:44

the real edition, the real version

1:47

of Batman is my guest today on

1:49

the show.

1:50

He is the fact

1:53

figure at the heart of the Siberia

1:56

Job fiction, his name, as

1:59

it happens, I don't know... think he's related to

2:01

Henry Kissinger is John Klinehines

2:03

and he is a big time

2:06

financial guy, very much involved with

2:08

Stanford University, the CEO

2:11

of Klinehines Capital Partners.

2:13

And he's joining us today. John, history

2:16

works in ironic ways, doesn't it? It

2:18

certainly does. So tell me a little

2:21

bit more about yourself. You're

2:23

not a, you're a rather, I'm gonna say shady

2:25

guy, but it's hard to figure stuff out about you. I

2:27

went to

2:28

Klinehines Capital Partners and

2:30

I didn't get a lot of information, John. Tell

2:32

me about you and your career. It's quite

2:35

unusual.

2:37

Well, I haven't had a high profile

2:41

in my career. I went into the hedge fund

2:43

business in 1993 as a junior

2:45

partner where I ran the Russia fund

2:48

with

2:49

another fellow from Texas. In 96,

2:52

I went out on my own and started my own fund.

2:56

We had a lot of

2:58

success. We started with a million dollars

3:01

and I think we peaked

3:04

at well

3:06

over 4 billion. We

3:09

had very good returns and then- To

3:12

put that mildly, John, to take

3:15

an investment of what, a million and

3:17

turn it into 4 billion, how'd you do

3:19

that? Well, I mean, that's

3:22

not the way the math works. I mean,

3:24

we had investors that came in along the way.

3:26

I think we raised a net of $700 or $800 million. So, it wasn't all

3:28

gains,

3:30

but

3:33

a lot of it was. The

3:35

hedge fund business changed a lot. I was one of the

3:37

early people

3:39

there. And in 2014, I decided

3:41

to give all the money back

3:44

to my investors. And I still run a hedge fund.

3:46

I still run Kleenex Capital, but it's

3:48

a family office now. Right. So,

3:51

as I found from Reuters, you

3:53

decided to liquidate, although I'm

3:56

guessing it was because you'd

3:58

made so much money. You could- could return

4:00

the investment, is that right? In

4:02

part, we did well, but it was also just,

4:05

it was difficult running the

4:07

business. It was becoming more institutionalized.

4:10

Investors were kind of

4:12

coming in and out, and I was losing capital

4:14

at precisely the time I needed it most,

4:16

and it just

4:18

wasn't a good business model for me, and I

4:20

enjoy investing, but having a lot

4:22

of investors complicated my

4:25

life. So I did what a lot of

4:27

managers do. I

4:29

formed a family office.

4:30

So how much of this fictional

4:33

John Mills, this businessman,

4:35

this invention in 1994, Josh

4:40

Haven's invention, how much of it is based on

4:42

your real life?

4:43

You know, it's largely based

4:46

on my life. I would say the

4:49

storyline in this book, which is true, the

4:53

plot and the story are true,

4:55

but there were hundreds of characters

4:58

involved in this particular investment

5:00

strategy, and a lot of the

5:02

characters are compilations. I mean,

5:05

a number of the stories that involve

5:07

me, involve my

5:09

former partner and other people as well, but

5:12

it's largely based on my

5:14

life and my experience and what I did in Russia.

5:16

And this is in part your

5:19

project. You came up with the idea of

5:21

the Siberia job, and then you found a

5:23

writer, is that fair, Josh?

5:25

That's correct. Why didn't you write

5:27

it yourself, John? You're a Stanford

5:29

boy, you smart, you could have

5:32

written it. Yeah, you know, I

5:34

can write a pretty mean business

5:37

memo, but

5:39

I wanted to write a story that

5:42

would sell books and would be

5:44

entertaining.

5:45

And I know what my strengths are,

5:47

and I'm not a writer. A lot, most

5:50

people in my position hire ghostwriters.

5:53

So there's nothing unusual

5:55

about the way I- Why make

5:57

it a novel? Bill Browder, I think,

5:59

has-

5:59

blurb your book, he's become very

6:02

well known. He, like you, was a former

6:04

investor in America, in Russia,

6:06

who made a lot of money, politically very controversial,

6:09

maybe more visible than you.

6:11

But he's mostly written nonfiction.

6:14

Why not just write your memoir?

6:17

You know, you know, Bill's a very good

6:19

friend of mine. I knew Bill and I were both

6:21

bankers in London before the Berlin

6:23

Wall fell. We were both early

6:26

in Russia and Bill and I did a lot of

6:28

business together. And

6:30

I have a, I think the

6:32

Red Notice book is a tremendous book.

6:35

It's nonfiction, as you pointed out.

6:37

It reads well. It's got

6:39

a great storyline.

6:41

It's tragic. It's

6:44

insightful. It's great. It's all around a

6:46

great book. I think Bill sold three million copies of the

6:48

book. The problem is, is I

6:50

started this, I've been out of Russia

6:53

more or less since the early 2000s.

6:55

And for me to go

6:57

back and write a nonfiction book would have been really

6:59

difficult. I mean, I've,

7:02

you know, I can't remember all the

7:04

people that were involved. I can't

7:07

fact check. And

7:10

quite frankly, if

7:12

you try to write this story in a factual

7:15

way, it might not capture the reader's

7:17

attention. The details are such

7:20

that it wouldn't necessarily

7:22

be all that interesting. What

7:24

I think Josh Haven did, or Josh

7:27

Galertner, which is Josh's real name, he

7:30

interviewed a lot of the people that were involved

7:32

in this project,

7:33

this investment project

7:37

we did. And he got stories

7:39

out of them and interesting

7:41

stories. And he weaved them all

7:43

together,

7:44

but he still followed our original

7:47

plot line. And in that

7:49

way, he made it a really readable

7:51

and enjoyable book. And in fact,

7:54

if we have time at the end of this, I'd love to tell you

7:56

a story about the RefuseNix

7:58

because because

8:01

in our research, we heard a wonder. Right.

8:04

Are you familiar with Goldberg's book, The Dissident?

8:06

I'm not, but I'm

8:09

familiar with the Refuse Nix and what

8:11

the Russian intelligence community

8:13

did to them on the way out of Russia.

8:16

And I've got a good story if we have time.

8:18

Okay. Well, I've always got time, John,

8:21

especially for good stories.

8:23

You wrote a piece for Fortune

8:27

recently, actually from

8:29

the last day of May this year, and the

8:33

title I Got Rich in Russia and Got Out

8:35

in Time Twice. Here's what I learned

8:37

about democracy and free markets.

8:40

It's not a very Klein Heinzean

8:43

title. You're not the kind of guy to shout from

8:45

rooftops about yourself. Tell me

8:47

how

8:48

you got rich in Russia. What is the story?

8:51

So first of all, I did write that

8:54

essay and Fortune edited

8:56

it a bit, but they only insisted that

8:59

they could pick the title. So that's not my title.

9:01

No, I didn't think it would be. I don't think that's

9:03

the kind of title you would personally choose, but

9:06

that's what happens when

9:08

you dine with the devil. So

9:11

how did you get rich? So you were a youngish

9:14

man who saw a business

9:16

opportunity. I mean, how much of

9:18

the Siberia job is true? Did you just

9:20

bump into a charming Czech businessman?

9:23

No, well, I was introduced to him. I

9:25

did not meet Peter in a bar. That's

9:30

a fictional part of the book. But I was introduced

9:32

to him by a colleague from

9:34

Merrill Lynch and was told that he had been very

9:37

successful in the Czech voucher

9:39

auctions and he knew what he was doing and he was setting

9:41

up in Russia and I should work with him.

9:45

We all got to Russia in 94. I

9:48

actually went in 92 with my wife

9:50

and spent a couple of weeks there. And

9:53

what I saw in 92 was really disheartening.

9:56

The economy was really

9:58

at a standstill.

9:59

The command economy was no longer functioning.

10:02

The currency didn't work.

10:04

They were paying workers with

10:07

money that was worthless. They were making products

10:09

that weren't any good.

10:12

People were walking around Moscow

10:14

with their heads down. There were

10:16

no goods in the shops. There were no cars

10:18

on the streets. And

10:20

when I returned again in early 1994, it was a different

10:24

place. Everybody

10:26

was busy. You

10:28

could get anything you wanted if you had the money.

10:31

What had functionally

10:33

been the black market two or three years earlier

10:36

was emerging as a free market system.

10:39

There was a sense of excitement

10:42

in the air. And it was

10:44

all aimed at this privatization that

10:48

was going to take place. The Russians were going to privatize

10:50

all of their businesses, all of their state-owned

10:53

businesses

10:53

over the course of one year, 1994. And these

10:55

businesses

10:57

were

11:00

privatized at literally 1% to 2%

11:03

of the value of where the stocks would be trading

11:06

if they were on a Western exchange, Western

11:08

European exchange, or in the US. So

11:11

we were able to buy stocks so

11:13

incredibly cheaply. We bought a company

11:15

called Luke Oil at a $300 million

11:18

valuation.

11:21

That stock,

11:23

just before Russia invaded Ukraine, that

11:25

stock was trading at a $60 billion

11:27

valuation. So why wasn't Moscow in 1994 crawling

11:30

with young

11:33

investment bankers like yourself?

11:35

It was. They were coming in. I got

11:38

there early. I got there three or four months

11:40

early. I was ahead of the game. But by

11:42

late 1994, Merrill

11:45

Lynch was setting up an office. Morgan Stanley was setting

11:47

up an office. City Bank had moved

11:50

in.

11:51

It really was

11:53

a very exciting place. There were new restaurants opening every

11:55

week, new hotels. It was really, in a lot of ways,

11:59

Russia in 94 and 95 felt

12:02

like the center of the universe to me.

12:04

John, lots of interpretations

12:06

of what happened in this period. I

12:09

did a show recently last year actually with

12:11

Catherine Belt and I'm sure you're all too

12:13

familiar with her book Putin's People.

12:16

Yeah, I know it well. I

12:18

mean, I'm sure you know Catherine.

12:21

To what extent would it be fair to say that

12:23

this was essentially what

12:25

some people might even suggest was the economic

12:28

rape of the country by not just

12:32

Russian oligarchs like

12:34

Abramovich, but also

12:36

foreign investors like yourself? Well,

12:39

it was a little bit different in 1994. I

12:42

mean, you know, none of these companies had any working

12:44

capital. They couldn't

12:46

turn their factories on. They,

12:48

you know, the, you know, Boris Yeltsin was in office.

12:51

He had a very strong political appointment or

12:54

political opponent named

12:56

Zuganov,

12:59

I believe his name was in. Yeah,

13:01

and a style just for the Soviet Union. And

13:05

I think the brilliant thing

13:07

that the Russians did and was I think it was the

13:09

architect of it all was a guy named

13:13

Anatoly Chubayas. He

13:15

was the architecture of this architecture of this

13:17

privatization scheme. He just realized

13:19

that if you privatized all

13:21

of these companies, it would be very

13:23

difficult for Russia to go back to a communist

13:26

system.

13:27

And I think that was

13:29

why they did it. They didn't really have

13:31

the choice. You know, China

13:33

took a long time to privatize itself. They

13:36

built their companies up and restructured them and got very

13:38

good prices for them

13:40

when they sold. I don't think Russia had that

13:42

luxury. They just

13:44

the economy wasn't in a functional

13:47

state.

13:48

But how fair was it that what

13:50

Chubayas and others planned? I

13:53

mean, did it essentially mean that

13:55

ultimately all the

13:57

and the Russian economy is mostly

14:00

really built on its

14:03

assets, its gold, its oil.

14:06

How much of this was essentially the reallocation,

14:11

redistribution of Russian wealth from

14:13

the state to private banks?

14:16

Well, it's a little bit complicated. In

14:19

the privatizations,

14:21

they did privatize all of it. The

14:24

government maintained a controlling stake

14:26

in Gazprom and a very

14:29

large stake in all the rest of the oil companies. So

14:32

really, they were just creating a market

14:34

for the shares that the companies could go out

14:37

and raise money.

14:38

The

14:40

real transfer of wealth from the government

14:43

to the oligarchs took place four

14:45

or five years later

14:48

after Yeltsin

14:50

resigned and Putin took over. And that was what they

14:52

call the loans for shares scheme.

14:55

And that was the real

14:58

transfer mechanism of

15:00

putting all the assets

15:02

into the oligarchs' hands. And that happened

15:04

much later than this book. So we

15:07

were just there for the beginning

15:10

of the stock market, a lot of foreign investors.

15:13

The Russians

15:14

pretty much came in after us and

15:16

pushed most of us out. How

15:21

much association did you

15:23

have with Yeltsin and his regime,

15:26

the people around him?

15:29

I had

15:32

no connection with them at all. They

15:36

had a whole host of problems they were dealing with.

15:40

My play here was just to,

15:44

my great hope was that the process

15:47

would work for a few years. When you buy an asset

15:50

that's trading at a 99% discount

15:52

and all of a sudden they publish

15:55

an annual report and there's some research on

15:57

the

15:57

company and it gets listed.

15:59

you know, it can trade at

16:02

a, you know, an 80% discount. And when

16:04

something goes from a 99% discount to

16:06

an 80% discount, you know, you've

16:08

made 19 or 20 times your

16:10

money already.

16:11

So I was just

16:14

hoping the process could

16:16

move forward a bit. And it did, it moved

16:18

forward. John, should

16:21

we and do you look back at this period

16:23

between say around 94 and the late 90s, with

16:26

a degree of nostalgia in the same way some historians

16:29

look back

16:30

at the period between the first and second

16:33

Russian revolutions, the

16:36

revolution of March and of November

16:40

as a period where Russia was relatively

16:42

free and open?

16:44

You know, I wouldn't call it nostalgia, Andrew.

16:48

It's almost a sense of disappointment

16:52

because things were going so well.

16:54

And, you know,

16:57

the process of moving to a free market system

17:01

really was progressing well. The Russians were playing

17:04

the game. They understood the stock market.

17:06

They liked the stock market. They

17:08

liked the liquidity it gave them.

17:10

What really happened is in 1998,

17:13

Russia went through a financial crisis. And it's

17:16

a financial crisis that started in Asia and moved

17:19

to Russia.

17:20

And the IMF went in and they bailed out

17:22

Russia. They gave them a package.

17:26

And early on in that process in October

17:29

of 98, Bob

17:32

Rubin, who was Treasury Secretary under

17:35

Clinton, he

17:38

saw, he got reports that that IMF bailout

17:40

money was ending up in Switzerland. And it was ending

17:42

up in the

17:43

bank accounts of Russian government officials.

17:45

And he just,

17:46

he literally the next day turned

17:48

the money off to Russia

17:49

and all their banks collapsed. They

17:52

had a major crisis. The cash machines

17:54

didn't work and the country basically

17:56

defaulted. So, you know, It

18:00

was a, it was a, everything in

18:02

my mind was going pretty well, um,

18:06

up until that. And then, you know, Russia just didn't have the institutions.

18:08

They didn't have a central bank

18:11

system where, where the head of the central bank

18:13

could tell the, the borscht

18:15

and people, Hey, you can't, you can't

18:17

just take the money out. You know, you know,

18:19

that wouldn't happen in most places, but

18:22

it was a new central bank and new leadership.

18:24

And

18:25

that, that happened. What

18:27

is the, this, we don't want to give

18:29

away all the plot, um,

18:31

John, because

18:33

we want people to buy the book. Um,

18:35

but what, what are the,

18:38

the tension, the narrative tension, what happens

18:41

in the book to excite people to encourage them to

18:43

turn the page? So,

18:45

so remember, um, Russia was, was

18:48

auctioning off the, all of these great

18:50

companies and, and auctions were,

18:53

were a number of the best auctions. There

18:55

was very limited information on them.

18:57

Um, because the more, the more people

19:00

that knew about the auction, the, the higher

19:02

the valuation would be, the more vouchers submitted,

19:05

the higher the price you would pay. So

19:08

so what, what Gazprom did,

19:10

Gazprom was negotiating with Shabayas and said,

19:12

look, we don't want to be in the auctions. And

19:14

Shabayas said, look, and I'll let you design your auction

19:17

the way you want. So, so it doesn't, you

19:19

know, all the investors don't

19:21

go in there and there's

19:23

nothing left for you guys. And

19:25

so Gazprom

19:26

structured the auction where, where it took place

19:29

in these remote regions where they had business

19:31

operations

19:32

and they made it very, very difficult for people

19:35

to get to these places.

19:37

Um, and they held these auctions without

19:40

really publicizing when they would

19:42

be and where they would be. Now

19:44

we, we had a, we had a very good contact

19:46

on the board at Gazprom who was feeding

19:48

us information. We were able to send teams

19:51

of people

19:52

to these auctions

19:54

and, and, and submit our vouchers.

19:56

And we, we did, we did really well. We got, we,

19:58

we, in fact, we ended up buying. so much stock

20:00

in the voucher that

20:02

when the company found out, they

20:04

were really upset. And the management

20:06

was upset because they hadn't put as many vouchers

20:09

in as we had.

20:10

And so they called the same guy on

20:12

the board that we knew

20:14

who was a former KGB official.

20:17

And they said, go find out what happened. And

20:20

so all of a sudden, our friend was in a position where

20:22

he's trying to get our stock back. So

20:24

it was a very tough set

20:26

of negotiations. We

20:29

finally arrived at a deal with

20:32

Gazprom after a lot

20:34

of the implied threats.

20:36

And

20:39

we settled up with them. We turned

20:41

over a very large percentage

20:43

of our stock, 75%, 80% of

20:46

our stock. And in return, they gave

20:48

us GDRs, which would

20:50

be freely tradable in the London market. So

20:54

we did well. We got a security that we

20:56

were allowed to trade legally. It was registered

20:58

on books.

20:59

We made a lot of money where

21:02

those shares went. Nobody

21:04

knows. It's still a mystery who got

21:07

our shares. But

21:08

it was a lot of money.

21:11

I mean, whoever took the 75%

21:14

of our stock did

21:17

well. Any guesses, John, who ended

21:19

up with your stock? I think it

21:21

was the Gazprom management, is my guess.

21:24

And these huge companies

21:27

were intimately bound up with

21:29

the state, weren't they? And indeed, the secret

21:32

services? That's right. That's

21:34

right. So were you in Browder's

21:36

camp when it comes to this or Catherine

21:39

Belton's camp when it comes to interpreting

21:42

what Belton at least calls KGB

21:44

capitalism? Yeah,

21:47

I mean, that happened. I mean,

21:51

that Putin's People book, I've never read it straight

21:53

through. I almost use it like a reference book.

21:56

It's almost like an encyclopedia

21:58

of the bad guys.

21:59

It's very helpful to me, but I haven't

22:02

read it. But I know her point is that after

22:04

Yeltsin left

22:06

and

22:11

Putin took over that you

22:13

slowly had a system where

22:15

the intelligence community or the

22:17

KGB

22:18

insinuated themselves into all these

22:21

businesses. So these people essentially woke

22:23

up to the fact that they could muscle in on the

22:25

money.

22:26

That's right, that's right. But a lot of them were already

22:28

there. I mean, if you look at Luke Coyle,

22:30

the largest sherbet Luke Coyle,

22:32

who had the innocuous

22:35

title of head of investor relations

22:37

was a guy named Leonid

22:39

Fadoun. And

22:43

he was a senior, senior KGB

22:45

guy who

22:46

was the number two guy at Luke

22:49

Coyle. And now he's a country

22:52

gentleman living in England. So

22:54

he was there at the beginning. But

22:57

yes, the intelligence

23:00

community woke up and got

23:03

involved in all of this. I

23:06

love the title of the book, John, The Siberia

23:08

Job. Of course, it reminds me of the Italian

23:10

Job. The end of the Italian Job leaves us,

23:12

the movie, of course, with a

23:14

bus teetering on the edge of a Swiss

23:17

mountain. But The Siberia Job,

23:19

I'm guessing ends

23:21

with clear winners and losers. You

23:25

know, it's all I can say is it's

23:27

got a happy ending. Happy

23:29

for who? I'm, you know, I-

23:31

That sounds like a massage, John. What,

23:33

happy for who?

23:35

You know, I think it

23:37

was happy for everybody. The Gazprom people got

23:39

their stock, got a big chunk of their stock

23:41

back. Peter Kellner

23:44

made a bunch of money and was able to go

23:46

back into the Czech Republic and provide

23:48

working capital. He went on to build

23:50

a huge industrial empire in

23:53

the Czech Republic and Russia. And

23:55

when he died, tragically, a couple of years

23:57

ago in this helicopter ski accident.

24:00

you

24:00

know, he was worth well over $10

24:02

billion. And it was his

24:05

death that triggered your

24:07

commitment to doing this book, is that fair? That's

24:10

right, that's right. I saw that, I saw

24:12

the news of his death and

24:15

I just, and I thought to myself, I've been wanting

24:17

to write this story for 30 years and

24:19

you know, if I don't do it now, there's

24:22

not gonna be anybody left to talk

24:24

to about how to do this story.

24:26

So yes, that was the catalyst. Since

24:29

then you've, you know, where you became

24:31

very rich twice, as you say, and

24:34

then you returned all

24:37

the Kleinhainz money back to the investors,

24:39

you've also continued the firm, but

24:41

you're also closely associated with Stanford

24:43

University.

24:45

I think you're something

24:47

called an overseer at

24:51

the Hoover Institute. So I'm

24:53

guessing your politics

24:55

are relatively conservative if you're involved

24:57

with the Hoover Institute. How did this

25:00

experience inform your

25:02

view

25:05

of democracy and free

25:07

markets? The

25:10

fortune title, you might not like the, I got rich

25:12

in Russia and got out in time twice,

25:15

but I'm guessing that what you learned about democracy

25:17

and free markets is more palatable for

25:19

you. What did it teach you and why did it make you

25:22

one of the major donors at Hoover and

25:25

a rather powerful American conservative?

25:29

Well, I mean, one of the things,

25:34

one of the initiatives at Hoover

25:36

is to support and sustain

25:39

the important institutions of this country.

25:42

The US, I mean, the US is great because

25:45

we have a strong executive

25:47

and a Supreme Court

25:49

and a legal

25:50

judicial review based legal system

25:53

and a strong central bank and

25:57

two houses of Congress. You

26:01

know, when you have

26:03

those great institutions, you can get

26:05

in trouble

26:06

as a country. An economy can get in trouble. I mean,

26:09

we've had the depression, we've had the great financial crisis.

26:12

But you fall back on those institutions

26:15

and they eventually kick in and

26:17

you return to your path of growth

26:20

and prosperity. I think

26:22

what I learned in Russia is that they just

26:24

didn't have the institutions ready to

26:26

go

26:27

when they started

26:29

moving from a command economy to a free

26:31

market economy. They didn't have the courts.

26:34

They didn't have the

26:35

business courts where, you

26:37

know, they have plenty of law courts

26:40

in Russia. But when they make a decision, there's

26:42

no way to review it or appeal

26:45

it. And so there's

26:47

a corruption in the court. There's

26:50

a corruption in the way government operates.

26:53

And when,

26:55

you know, and you see this in places like India,

26:57

when 20 or 25 percent of the people are

27:03

corrupt, it incentivizes the

27:05

next 5 percent of the people to be corrupt,

27:07

too. Because if the only way you can get ahead

27:10

is to break the law or

27:12

do something,

27:13

you know, nefarious

27:16

to feed your family, you're

27:18

going to do it. And we're quite

27:20

fortunate in the U.S. that most

27:23

people obey the law. And it's a

27:25

very, very small percentage of people who cheat

27:27

in this country. And so the incentive

27:30

is to do things

27:31

the right way. Russia didn't have

27:33

that. They didn't have the institutions in

27:35

place

27:36

for people to do the

27:39

right thing. I mean, guys like Anatoly Chubias,

27:41

he's a boy scout. He's a great guy. But he

27:43

just got run over by all the bad

27:45

dudes in Russia.

27:47

You know, when you're the only guy doing things the right way,

27:50

they're going to take advantage of you. But does that why

27:52

does that make you a conservative?

27:55

I mean, nobody would argue against

27:58

institutions. No one's in favor. corruption?

28:02

Why am I conservative? I mean, you know, I believe

28:04

in the free market system. I think, I think, you

28:08

know, I don't, I think you limited

28:10

government free market system, individual

28:13

liberties, you know,

28:15

celebrate what we have in common, not celebrate,

28:17

you know, what, why we're different.

28:21

Those are all things that are part of the

28:23

conservative mantra. I mean, I'm, I

28:26

consider myself a very progressive conservative.

28:28

I'm, I spend a lot of time and money

28:30

on schools for, for lower income

28:33

people and building schools for lower income people.

28:35

I mean, you know, education is

28:37

the way I

28:39

got out of, you know, the middle class

28:41

home that I

28:43

grew up in. I mean, if I hadn't gone to Stanford,

28:45

I would have never had the success I had. And,

28:48

and that's all part of education. So,

28:51

you know,

28:53

I'm conservative because, you know,

28:55

the government isn't the answer.

28:57

You don't, you don't want your

29:00

people to be reliant on government. You want

29:02

them to be

29:03

reliant on a vibrant free market system.

29:05

John, I'm sure you're familiar with Fiona Hill

29:08

and her work. She was on the show a couple

29:10

of years ago, worrying about

29:12

what she called the increasingly Russian

29:14

way of life in America, the de-industrialization

29:17

of much of America. I'm

29:20

not sure if she's a conservative or not.

29:22

She worked for Donald Trump for a while

29:24

and fell out with him. Are you

29:26

like Hill and others concerned

29:28

with America increasingly

29:31

becoming like Russia and this incredibly

29:35

dramatic disparities between

29:38

the very wealthy and the rest of the country

29:40

and the de-industrialization,

29:42

the disappearance of jobs, what Angus Deaton

29:45

has also been on the show won a Nobel Prize

29:47

called the

29:48

deaths of despair in America.

29:52

Yeah. I mean, that's a, there's

29:54

a lot in that question on to unpack.

29:56

I mean, you know, fortunately, we're in a phase right

29:58

now where

29:59

are reshoring or re-onshoring

30:02

a lot of industrial businesses. I think I saw a statistic,

30:05

there's $150 billion

30:08

a year of

30:09

capital expenditure in manufacturing

30:13

and

30:14

engineering projects going on this

30:16

year in the US. A lot

30:18

of it's in semiconductors,

30:20

a lot of it's very high-end stuff, but it's also in

30:23

electric vehicle manufacturing.

30:26

A lot of European companies are moving

30:28

their operations to the southern part of

30:30

the US because they can sign

30:32

10-year energy agreements. You

30:36

can't do that in Europe.

30:39

The cost of energy

30:41

when Putin went into the Ukraine went up 400-500%,

30:46

and it pretty much made almost all industrial

30:48

businesses in Europe unprofitable.

30:51

People are moving to the US right now at the fastest

30:54

rate. What's my greatest concern

30:56

is do we have the human capital here

30:58

to support that? We

31:01

need an immigration bill so that people

31:04

who come to this country and get PhDs

31:06

can

31:07

stay, don't have to go home, they

31:09

can get a green card. We need

31:11

the process of bringing

31:16

in strong workers from overseas.

31:18

We need great education to

31:20

fill the human capital gap.

31:24

Well, let's end, John,

31:26

with that story. But before that, I assume

31:29

you've got plans

31:31

to turn this new book, Josh

31:33

Haven's book, based on your life, The Siberia

31:35

Job into a Movie. Who's going to play John

31:38

Klinehides? You haven't got Michael Caine

31:40

now. He's a bit old.

31:45

I hope it gets made into

31:47

a movie. Who would you like to

31:51

play a

31:52

younger version of yourself? I

31:55

don't really care. I'm not going

31:57

to get into the artistic. I've talked to Bill Browder

31:59

about this.

31:59

Bill retained his artistic

32:02

rights for

32:04

the Red Notice and I think that makes it a lot

32:07

harder to get a movie made. My views

32:10

sell it to somebody who agrees to make the movie

32:13

and let them do whatever they want with it. Would

32:15

you play yourself John if they asked you?

32:18

No, no. Maybe

32:20

the guy collecting, cleaning

32:22

out the ashtrays in the Russian hotel. Yeah,

32:26

they wish you out without a warning for anyone who sees

32:28

the guy cleaning out the ashtrays in the

32:30

lobby. He's the guy with the money. He's the guy with the power.

32:33

Finally, John, wonderful conversation,

32:36

fascinating, fascinating

32:38

project and I think everyone should

32:40

appreciate the fact that you've come public

32:42

on all this in your own recisant way,

32:45

even if we can blame some of the editors

32:47

for fortune for that rather showy

32:50

title. Finally, the story

32:52

you wanted to tell that we can

32:55

end with. Oh, about the

32:56

Refusenix. So

32:59

as your listeners know, the Refusenix were a group

33:01

of Jews who wanted to leave, successful

33:04

Jews who wanted to leave

33:05

Russia and they weren't given permission

33:08

because

33:09

the security apparatus wanted

33:12

to make sure that they

33:15

left with nothing. They wanted

33:17

to take all the wealth that they had accumulated

33:20

and so they would follow

33:22

them around and

33:23

keep track of their movements and basically

33:27

make it so that when they left, all their money stayed

33:31

in the

33:32

country. And about

33:35

one of the wealthiest gentlemen left

33:39

and the KGB guy who was responsible bumped

33:41

into this guy five or six years later

33:43

when he came back to Moscow and the

33:46

guy was obviously very, very wealthy. And

33:48

he said, how did you manage to get all your money

33:51

out of Russia?

33:52

And he said, I

33:53

had a party

33:55

one night at my large apartment

33:58

and I invited

33:59

five people over from the American embassy.

34:03

And I halfway to the party, I took them into

34:05

a room, and it was stacked

34:07

full of hundred dollar bills. And

34:10

we took all of those hundred dollar bills,

34:13

and we counted them.

34:14

And then I burned them,

34:15

put them all in the fireplace.

34:17

And apparently, there's a rule in the

34:19

US Treasury

34:21

system that if you

34:23

can verify that the

34:25

money has been destroyed, the US Treasury

34:28

will reissue it to you. And he got

34:30

affidavits from all these members of the...

34:32

Nice. So, and

34:35

I can't verify that story, but I

34:38

believe it to be true.