U.S. exporter Ralph Gregorian was kicked out of the Soviet Union on spy charges he says are outrageous. So he did what any red-blooded entrepreneur would do: he decided to take the Russians on.
Lugging his suitcase, Raphael Gregorian walked through Sheremetievo Airport, some 15 miles from the red-brick walls and gilded domes of the Kremlin. He had just stepped off the plane and already a stern Soviet guard was barking questions, staring at Gregorian's passport picture, then back into his tired eyes.
Gregorian approached customs with some apprehension. His American passport showed that he had been born in Stalingrad. But he had never been a citizen of the Soviet Union. Still, he knew Russians hated nothing more than a comrade who had abandoned the motherland. This 1970 visit was, in fact, his first since the age of three. After brief questioning, during which he established that he was in the country on business, he was waved on.
Riding to the hotel, Gregorian felt as anxious as any Westerner venturing behind the Iron Curtain for the first time. Everyone looked suspicious. No doubt his solemn taxi driver was an agent of the KGB. No doubt a pair of eyes followed his every move. Gregorian had hoped his return to his native land would be different, and now he was disappointed. He wasn't prepared for the grim expressions on people's faces; for the pungent small of form-aldehyde in the air, masking the filth; for the apathy that made bribery part of many transactions.
It was a feeling he would never quite get over. Fourteen years later, in 1984, he entered his Moscow hotel room and a chambermaid came running in, yelling something about soap. She motioned him to follow her into the bathroom. Continuing to scream, she turned the shower on full blast. Then she cupped her hands over her mouth and said, just loud enough for him to hear, "Don't say anything in your room. It is bugged."
The chambermaid was on to something, but there was no way she could know the extent of it. Within months, Gregorian was caught in the vortex of a superpower conflict. It embroiled him in espionage charges. It destroyed his reputation. It shattered his company. And it may cause an international incident in the months ahead. For whenever the first Aeroflot Soviet Airlines' plane lands here, resuming service to the United States, Gregorian's lawyer plans to be there. He'll have a U.S. marshall at his side. And the marshall will have a padlock for the cabin door. The marshall expects to then auction the plane to satisfy the judgment in a lawsuit Gregorian won against the Soviets.
Trading with the Russians hadn't been Gregorian's idea in the first place. In 1968, he was president of Melabs S.A., in Brussels, which was soon to become a subsidiary of SCM Corp., the New York City conglomerate. One day a Soviet official sauntered into his office. Gregorii Kalmykov was a stout foreign trade officer who wanted to drum up more business between the Soviet Union and U.S. companies. He addressed Gregorian in French. He was astounded when an answer came back in fluent, unaccented Russian. "He nearly fell on the floor," recalls Gregorian, who is 56 and was raised in a Russian-Armenian community in Iran. The two hit it off, perhaps because -- as his Russian friends would later joke -- the portly Gregorian, with his thick mustache and white temples, resembled Joseph Stalin.
Over sandwiches one day soon after they met, Kalmykov took a piece of paper from his breast pocket and slid it over to Gregorian's side of the table. "Our people in Moscow are interested in this," Kalmykov said. "Can you supply it?" The scribbles on the slip of paper from the Soviet Ministry of Foreign Trade asked for six identical scientific research instruments that are used to determine the size of molecules. Gregorian was shocked; because of the specialized nature of the instruments, he had never before sold more than two to a single laboratory. Now the Russians were willing to pay $50,000 for the half dozen. They sealed the deal with nothing more than a handshake.
A few days after the shipment arrived in Moscow, Gregorian and Kalmykov met at Gregorian's office for drinks. He wanted to discuss money, he told the Russian, since he was not sure exactly how the world's largest country would pay him. In rubles? With a check drawn on a Soviet bank? Kalmykov calmly hoisted his thin black briefcase onto a nearby desk. Opening it, he tilted the briefcase at an angle. Inside, $50,000 was piled in crisp $100, $50, and $20 bills. "I said, 'Let's forget about those drinks," Gregorian recalls, "and I quickly ran to the door and locked it. We spent the afternoon counting it."
In 1970, Gregorian, now with SCM, went to the Soviet Union to help his new customers adjust the instruments. During that first four-day visit, he toured the elite hospitals, with comfortable beds and modern facilities reserved for Politburo members and other apparatchik. It wasn't all work, though; accompanied by a driver, Gregorian spent time sightseeing. At night, he dined on caviar and black bread at Moscow's better restaurants. He enjoyed the Bolshoi Ballet at the ornate Palace of Soviets. At Moscow's Opera House, he was dazzled by Boris Godunov, a Mussorgsky opera based on the life of a czar who murdered the successor to the throne in order to secure it for himself.
When he returned to Brussels, Gregorian was as high as Sputnik, because of a business opportunity he had spotted. The market for medical and laboratory equipment was ripe for an American company. The Europeans, who dominated the field, were merely middlemen selling mediocre American equipment to the Russians at a 30% markup. It was no wonder American companies stayed away. Most were put off by the bureaucratic headaches. The Soviets had 40 different purchasing agencies, and finding the right one was never easy. But SCM could crack the puzzle, Gregorian argued, because its food division already had many Russian customers. Besides, he had lived with the Russians, had a master's degree in Soviet studies, and "they wouldn't be able to B.S. me," he boasted. But SCM, best known for its type-writers, answered him emphatically: nyet.
Gregorian, though, seized the opportunity and began planning his own business, confident in his knowledge of exporting and of the Russians. The way to make money in export, he knew, was to "go places where other people aren't going to go" -- in this case, the Soviet Union. He could deliver quality medical equipment for less than the Europeans and still make a margin of 20%. And once the Russians grew comfortable with him, the orders would flow as smoothly as vodka at a dacha in the Moscow countryside. "In a centralized economy, a few knowledgeable people can do a lot," explains Gregorian. "The Russians like to deal with the same person again and again. And they knew I was a guy who could understand them."
