The United States is locked in a tight race with China and Russia to build destructive cyberweapons capable of seriously damaging other nations’ critical infrastructure, according to a leading expert on hostilities waged via the Internet.

Scott Borg, CEO of the U.S. Cyber Consequences Unit, a nonprofit institute that advises the U.S. government and businesses on cybersecurity, said all three nations have built arsenals of sophisticated computer viruses, worms, Trojan horses and other tools that place them atop the rest of the world in the ability to inflict serious damage on one another, or lesser powers.

Ranked just below the Big Three, he said, are four U.S. allies: Great Britain, Germany, Israel and perhaps Taiwan.

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But in testament to the uncertain risk/reward ratio in cyberwarfare, Iran has used attacks on its nuclear program to bolster its offensive capabilities and is now developing its own "cyberarmy," Borg said.

Borg offered his assessment of the current state of cyberwar capabilities Tuesday in the wake of a report by the American computer security company Mandiant linking hacking attacks and cyber espionage against the U.S. to a sophisticated Chinese group known as “Peoples Liberation Army Unit 61398.

In today’s brave new interconnected world, hackers who can defeat security defenses are capable of disrupting an array of critical services, including delivery of water, electricity and heat, or bringing transportation to a grinding halt. U.S. senators last year received a closed-door briefing at which experts demonstrated how a power company employee could take down the New York City electrical grid by clicking on a single email attachment, the New York Times reported.

U.S. officials rarely discuss offensive capability when discussing cyberwar, though several privately told NBC News recently that the U.S. could "shut down" the electrical grid of a smaller nation -- Iran, for example – if it chose to do so.

Borg echoed that assessment, saying the U.S. cyberwarriors, who work within the National Security Agency, are “very good across the board. … There is a formidable capability.”

“Stuxnet and Flame (malware used to disrupt and gather intelligence on Iran's nuclear program) are demonstrations of that,” he said. “… (The U.S.) could shut down most critical infrastructure in potential adversaries relatively quickly.”

China, Russia have different priorities
Borg said China and Russia have similar capacity to cause mayhem, but have different priorities and skill sets.

“Russia is best at military espionage and operations,” he said. “That's what they have focused on for a long time. China is looking for crucial business information and technology. China's main focus is stealing technology. These things quite separate. You use different tools on critical infrastructure than you use for military espionage and different tools again on stealing technology."

Borg said that each has its strong suit. "The Russians are technically advanced. The Chinese just have more people dedicated to the effort, by a wide margin,” he said. “They are not as innovative or creative as the U.S. and Russia. China has the greatest quantity, if not quality."

Borg said the group featured in Mandiant’s report, the People’s Liberation Army Unit 61398, may be one of the most important groups working in China, but not necessarily the most important.

"There are at least two dozen groups carrying out aggressive operations against the U.S.,” he said. “They get in each other’s way and trip over one another, but they are all operating with the tacit approval of the Chinese government.

"They're not cooperating with each other because they don’t share capabilities," he added. "One group has good programming, but is bad at access or targeting." 

The Chinese hacking efforts are so broad, Borg said, that the highest-ranking Chinese officials “almost certainly do not know what all the groups are doing,” or the consequences. As a result, he added, they have been embarrassed by reports like the one in Tuesday’s New York Times, which first reported on the Mandiant assessment.

China is the most likely of the superpowers to leave a calling card, making their work the easiest to track. "China is very arrogant in its authorship of cyberweapons,” Borg said. “It does little to conceal its identity."

That’s in sharp contrast to the Russians, who he noted are not above writing code in Chinese to throw off investigators.

While the U.S. could respond to ongoing cyberattacks from China and Russia by shutting down the power grid of "any of its adversaries” and causing severe physical damage, Borg said it is encumbered by several factors.

One is its vulnerability to cyberwarfare as the world’s most networked nation, he said.

And from a geopolitical standpoint, Borg said, the U.S. would not want to badly damage the economy of either China or Russia. In fact, he said, the U.S. would almost certainly have to incorporate protections for critical systems like the power grid in any cyberattack.

Also, detecting the source of hostilities is not always easy, Borg said, as cybertracks are not as easy to follow as missile tracks. That means “mutually assured destruction,” the main strategic tenet of the Cold War, is problematic at best when talking about cyberwar, he said.

"It might be difficult to determine proportionate response,” he said. “It might not be simple to attack the attacker.”

For example, policymakers may think an attack has been carried out by the Chinese, when it was actually the work of the Russians or a rising power in the cyber world, like Iran. That is why intelligence -- getting insight into these operations -- is more important in a crisis than cyberforensics, which can take longer and not be as certain.

"There is no MAD in the Cold War sense," he said, "You can’t be 'assured' of attribution. The attack can be anonymous. It can be spoofed," or disguised as coming from another source. 

Iran developing 'serious capability'
The U.S. first began to develop its own offensive capabilities 20 years ago when several strategic thinkers, particularly at the Naval Post-Graduate School, began to see the possibilities. It was not so much a strategic priority, but more "people familiar with electronics and hackers exercising their imagination." (Borg says one of those thinkers, Winn Schwartau, used fiction to discuss the threat and the possibilities, in a 1991 book, "Terminal Compromise.")

While the U.S. has the means to respond and to defend itself, Borg notes that some countries have no recourse. He cited the Russian invasion of the Republic of Georgia in August 2008, when the Georgian government and media infrastructure was quickly compromised.

What was particularly interesting, Borg said, was that the Russian military and intelligence services weren’t directly involved.

"The first wave was carried by organized crime," he noted. "The second wave was carried out by a (hacker) group organized though social media.” He said Russian hackers could download the attack software from a variety of popular sites, including dating and gun-collecting websites.

In both cases, Borg concluded, the organizers apparently were tipped off early about the timing of Russian military operations, he said.

The attack on Georgia also illustrated another aspect of cyberwarfare, Borg said, noting that Georgia, Estonia and Lithuania afterward formed a cyberalliance, leaving them in a better position to deal with future assaults.

That also appears to be the case with Iran, which recently announced that it decided to establish cyber army and claimed to have 4,000 to 5,000 military personnel involved in defensive and offensive operations. That isn’t all bluster, Borg said, noting that when the U.S. leveled new sanctions on Iranian banks last year, U.S. banks suddenly came under attack.

"Iran is developing a serious capability," said Borg. “It's exaggerating the present capabilities, but it’s working toward the future."

That’s especially troubling because the risk of smaller nations waging cyberwar against one other may be higher than with the online superpowers, he said.

He cited reports indicating that Iran may have been behind what he called one of the more serious cyberattacks to date -- an assault last August on the Saudi Aramco computer network that disabled more than 30,000 computers used to control the flow of Saudi oil. The Saudi Interior Ministry blamed "foreign countries" for the attack.

Borg said he believes the attack was an "Iranian fundamentalist attack ... at some point loosely the under auspices of Iran, and blessed by Iran. The fundamentalist group made a claim of responsibility. ... “Based on technical analysis, the claim has credibility."

For that reason, Borg says he is less worried about the possibility of China or Russia launching a catastrophic attack against the U.S. than he is about the emerging cyberpowers.

“What I’m really concerned about isn’t Russia or China, but attacks from Iran or terrorist groups working with state actors,” he said.

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This summer, as the Syrian economy began to unravel and the military pressed hard against an armed rebellion, a Syrian government plane ferried what flight records describe as more than 200 tons of “bank notes” from Moscow.

The records of overflight requests were obtained by ProPublica. The flights occurred during a period of escalating violence in a conflict that has left tens of thousands of people dead since fighting broke out in March 2011.

The regime of Bashar al-Assad is increasingly in need of cash to stay afloat and continue financing the military’s efforts to crush the uprising. U.S. and European sanctions, including a ban on minting Syrian currency, have damaged the country’s economy. As a result, Syria lost access to an Austrian bank that had printed its bank notes.

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“Having currency that you can put into circulation is certainly something that is important in terms of running an economy and more so in an economy that is become more cash-based as things deteriorate,” said Daniel Glaser, assistant secretary of the Treasury for Terrorist Financing and Financial Crimes.  “It is certainly something the Syrian government wants to do, to pay soldiers or pay anybody anything."

According to the flight records, eight round-trip flights between Damascus International Airport and Moscow’s Vnukovo Airport each carried 30 tons of bank notes back to Syria. There are records relating to the flights in Arabic and English as well as copies of over-flight requests sent to Iran, which are in Farsi.

Syrian and Russian officials did not respond to ProPublica's questions about the authenticity and accuracy of the flight records. It is not possible to know whether the logs accurately described the cargo or what else might have been on board the flights. Nor do the logs specify the type of currency.

But ProPublica confirmed nearly all of the flights took place through international plane-tracking services, photos by aviation enthusiasts and air traffic control recordings.

Each time the manifest listed “Bank Notes” as its cargo, the plane traveled a circuitous route. Instead of flying directly over Turkish airspace, as civilian planes have, the Ilyushin-76 cargo plane, operated by the Syrian Air Force, avoided Turkey and flew over Iraq, Iran and Azerbaijan.

The flight path between Syria and Russia described in the manifests.

Tensions have been rising  between Syria and Turkey since the spring. Last month, Turkey forced down a Syrian passenger plane traveling from Moscow. Turkey suspected the flight of carrying military cargo but officials have not said what, if anything, was confiscated.

If the flight manifests are accurate, a total of 240 tons of bank notes moved from Moscow to Damascus over a 10-week period beginning July 9 and ending on Sept. 15.

U.S. officials interviewed said evidence of monetary assistance, like military cooperation, point to a pattern of Russian support for Assad that extends from concrete aid to protecting Syria from U.N. sanctions.

In September 2011, six months into the violence, the European Union imposed sanctions that prohibited its members from minting or supplying new Syrian coinage or banknotes. In a statement, the EU said the sanctions aimed “to obstruct those who are leading the crackdown in Syria and to restrict the funding being used to perpetrate violence against the Syrian people.” At the time, Syria’s currency was being minted by Oesterreichische Banknoten- und Sicherheitsdruck GmbH, a subsidiary of Austria’s Central Bank.

President Obama has issued five Executive Orders that prevent members of the Assad regime from entering the United States and accessing the U.S. financial system.

 “Increasingly, it is more difficult to finance the war machine and the cost of the war is becoming more expensive for the Assad regime,” said one U.S. official who spoke on the condition of anonymity. “Targeted sanctions on those leading the violence are working and start to bite into their pocket books.”

Russia appears to be helping Syria blunt the impact of the sanctions.

In June, Reuters reported  that Russia had begun printing new Syrian pounds and that an initial shipment of bank notes had already arrived.  The report was denied by the Syrian Central Bank, which claimed the only new money in circulation were bills that had replaced damaged or worn bank notes. Such a swap, the bank contended, would have no effect on the economy.

On Aug. 3, the official Syrian news agency SANA, reporting from a news conference in Moscow with Syrian and Russian economic officials, quoted Syrian officials acknowledging that Russia is printing money. Qadr Jamil, Syria’s deputy prime minister for Economic Affairs, was quoted by SANA as calling the deal with Russia a “triumph,” over sanctions.

Syrian Finance Minister Mohammad al-Jleilati said that Russia was providing both replacement notes and additional currency to, as SANA put it, “reflect the country’s changing GDP.” 

Al-Jleilati said the money would have no effect on inflation. Printing new notes beyond simply replacing old ones could undermine Syria’s already battered currency.

At the time of the meeting, at least 30 tons of currency had already been delivered, according to the flight records, and another 210 tons would be delivered in subsequent flights.

In its regional economic outlook released earlier this month, the International Monetary Fund noted that Syria’s currency has lost 44 percent of its value since March 2011, trading for about 70 Syrian pounds to the dollar compared with about 47 pounds when the conflict began.

Ibrahim Saif, a political economist based in Jordan and a resident scholar at the Carnegie Middle East Center said 30 tons of bank notes twice a week is a significant amount for a country like Syria.

“I truly believe it’s not only that they’re exchanging old money for new notes. They are printing money because they need new notes,” Saif said.

“Most of the government revenue that comes from taxes, in terms of other services, it’s almost now dried up,” noted Saif. Yet, “They continue to pay salaries. They have not shown any signs of weakness in fulfilling their domestic obligations. The only way they can do this is to get some sort of cash in the market.”

Before the unrest broke out, Syria had about $17 billion in foreign currency reserves. Saif said he and other economists in the region estimate they now have about $6 billion to 8 billion in reserves, dwindling about $500 million a month for salaries and supplies to keep the government running.

In Moscow, the Syrian finance minister had said that his country required additional foreign currency reserves, which Russia may provide in the form of loans.

“It’s possible the Syrians are acquiring foreign currency reserves, either Euros or US dollars, which they would need to conduct any serious commerce,” said Juan Zarate, who served as assistant secretary of the Treasury for Terrorist Financing and Financial Crimes during the Bush administration.

Zarate noted that other countries, when faced with economic sanctions, have leaned on allies for foreign currency reserves. China supplied North Korea with such funds in the past and Venezuela agreed to sell reserves to Iran.

Syria’s currency is still traded on open markets, but there is limited on-the-ground information about the economy, including inflation.

Officials at the IMF “have not been able to get direct information about Syria for at least a year,” Masood Ahmed, director of the group’s Middle East and Central Asia department, told reporters at a conference in Tokyo last month.

Glaser, at Treasury, declined to put a figure on Syria’s current reserves, but said the Syrian economy is suffering in part from a lack of tourism and a ban on oil sales, both of which provided Damascus with foreign currency. “There is significant inflation in the country. It can be caused by adding new currency or not having foreign reserves to prop up the existing currency.”

Quinn Norton contributed to this story.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.

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If Bashar Assad is dislodged from power in Syria, as seems increasingly likely, Russia stands to be the biggest loser in both international prestige and lost arms sales, U.S. analysts tell NBC News.

 “They are scrambling to hold on to the few allies they have,” Charles  Kupchan, a senior fellow with the Council on Foreign Relations and the author of “No Man’s World,” a book about a world order unanchored by superpowers, said of the Russians. “They’re in an extremely awkward position  --  supporting a regime that is considered beyond the pale by most of the world  -- and as a consequence are selling arms and vetoing  resolutions that are needed steps to stop the killing.”

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On Thursday, Russia and China vetoed a U.N. Security Council resolution threatening  sanctions against the Assad regime. U.S. Ambassador to the U.N. Susan Rice called the actions, “dangerous and deplorable,” and argued  on the “Andrea Mitchell Report” on MSNBC that it runs against their “long-term interests.”

Indeed,  those who have meet with members of the Syrian rebel army say no nation, not even Iran, Assad’s closest ally in the region, is as reviled as Russia, which has supplied the regime with many of the armaments used to attack the rebels and shell villages.

Kupchan says that Russia doesn’t seem to care because it’s dealing with what it considers larger issues of geopolitics.  “What’s driving  Russia’s position is Moscow’s deep discomfort at what happened in Libya and (its determination) that it not again sanction civilian protection as pretext for regime change,” he said.

Former Russian President Dmitry Medvedev, who according to diplomatic officials felt personally betrayed by U.S. President Barack Obama after agreeing to U.N. resolutions permitting the use of force to protect Libyan civilians, only to see it used to overthrow their long-time ally, Moammar Gadhafi.

“Their second motivation, more explicit , is  to salvage influence. To put it mildly, their influence has waned in the Middle East and Central Asia ," added Kupchan. “So, they’re scrambling to hold on to the few allies they have.”

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William Hartung, an arms analyst for the Center for International Policy, says there may be another, more commercial reason for Russia’s support: Syria is one of Moscow’s biggest arms customers in the Middle East, and while purchases by other regional buyers  have declined , Damascus’ appetite for first Soviet and then Russian weaponry has never wavered.

“Syria is among a handful of big buyers left for Russia,” said Hartung, who notes that former customers like Saddam Hussein and Gadhafi have left the world stage. The U.S. and Europe also are making inroads with Russia’s biggest client, India, while China is manufacturing more of its own armaments. “How do you replace China, India, Iraq, Libya and now Syria?” Hartung asks.

In fact, Syrian arms purchases  from Russia have dramatically increased over the past several years, according to documentation  from the Stockholm International Peace Research Institute  (SIPRI) and interviews with arms experts.

“Most of Russian exports to Syria over the 2001-2011 period were in the past three years,” said Hartung. “The data shows $187 million (in sales) in 2009;  $294 million in 2010; and $246 million in 2011.”  Over the past decade, Russia transferred weapons worth $857 million to Syria, about 70 percent of the total weapons Syria received in that period.  Other suppliers were Belarus ($196 million), Iran ($109 million), and North Korea ($40 million).

Major weapons sent by Russia to Assad’s government, according to SIPRI, included 2,000 anti-tank missiles, including 200 Igla-SA-18 "Grouse" models, which have been fired from vehicles, helicopters and  ships against rebel fighters; 868  surface-to-air missiles; 24 MiG fighter planes with 300 air-to-air missiles; 36 trainer/combat aircraft; as well as helicopters and artillery. Those numbers do not count the small arms the Syrian military and security forces receive from Russia.

Politically, it’s a symbiotic relationship, Hartung said of the Syrian purchases. “Some of this is about cementing  relationships,  hoping the Russians will bail them out in a pinch.”

There have been conflicting reports on Russia’s willingness to continue sales.  In early July, the deputy director of a body that supervises the country's arms trade was quoted as saying, Russia  would suspend arms sales to Syria.

“While the situation in Syria is unstable, there will be no new deliveries of arms there," Vyacheslav Dzirkaln told journalists at the Farnborough Airshow in Britain, Russia's Interfax news agency reported. But no one else in the Russian government would confirm the deputy minister’s comments, leaving open the possibility that Russia will continue to resupply Assad’s military and security forces.

'Strengthening Putin's hand'
Kupchan said continuing the arms sales might benefit Russian President Vladimir Putin.

 “I do think that in the big scheme of things, the sale of arms is a drop in the bucket financially,” he said. “It matters more in domestic politics, within the decision-making process. Arms merchants and generals are weighing in. It’s not a decisive role but it helps Putin to have them in his camp.

“It’s all about strengthening Putin's hand by standing up to the West.”

But Hartung said that no matter what the end game in Syria, Russia will come out a loser. Either the client state will be in the hands of the anti-Russian rebels or remain in chaos for months, or even years.

 Still, Kupchan said, Russia may still play a positive role in ushering in the post-Assad era.

“It’s conceivable the Russians play a role in the end game,” he said. “They cannot be exceedingly pleased the way this is gone.  I can see the Russians facilitating Assad’s departure.  I just don’t see him winding up in a dacha or gated community outside Moscow.  Probably, more like somewhere in the Arab world or Africa.”

Wherever he goes, Russia’s influence in Syria is likely to go with him.

Robert Windrem is a senior investigative producer for NBC News.

 

 

Who is Mikhail Prokhorov? That’s easy. He is the most interesting man in the world!

Mikhail Dmitrievich Prokhorov, 46, is a singular figure in Russia and now the larger world. At 6 foot, 9 inches tall and thin, he is the Global Russian - very different from the short, dour New Soviet Man of decades past.

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A billionaire somewhere between 18 and 25 times over, he is a partying playboy who swears he has never tasted vodka. He is called Russia's most eligible bachelor and has been seen in the company of some of the world's most beautiful women. He is quick-witted, charming, droll and affable, someone who enjoys the spotlight, craves it in fact. In a literary sense, he is more Jay Gatsby than Dr. Zhivago.

Although he is a Russian patriot, he also is a man of the world. He travels in a $45 million Gulfstream V corporate jet and can't seem to keep track of his $45 million yacht. His watch is reportedly worth $138,000.

He owns a large house in one of Moscow's new gated communities. He’s been in a French court trying to retrieve a $30 million deposit he placed on what is purported to be the world's most expensive home -- the $700 million Villa Leopolda, built for a Belgian king on the Riviera. First he liked it, then he didn’t.

He owns an NBA team – the New Jersey Nets -- and part of a billion-dollar arena being built in Brooklyn. His business partner in both is the rapper and entrepreneur Jay-Z. He’s received medals from the presidents of Russia and France and met U.S. Presidents George W. Bush and Barack Obama, the latter of whom suggested he’d like to play with Prokhorov in any pickup basketball game.

And now he’s running for president of Russia. Prokhorov was not born interesting. He arrived a simple comrade in the Soviet Union on May 3, 1965. His father was a member of the Soviet sports committee and his mother a scientist.

While privileged, his upbringing was nothing special for the day.  His parents sent him to English Special School No. 21 in Moscow, where he received a gold medal and was recommended by the local Komsomol (Young Communist League) for college admission.

But first, he did what other Soviet youths were required to do. From 1983 to 1985 -- at the height of tensions between the U.S. and Soviet Union -- he served in the Soviet military. He also joined the Communist Party, though it doesn't appear he was ever much of a Communist. While in college, he sold stone-washed jeans -- his first capitalist venture-- under the brand name, "Yourself Jeans."

But all that presents only an inkling of who he is.  Let's start with the money.

Prokhorov went into banking after graduating from the Moscow Financial Institute with a degree in international economics. From 1989 to 1992, he was head of the International Bank for Economic Cooperation’s Management Board.

Then, in 1993, during the largely unregulated and highly controversial privatization of former state-controlled industries, Prokhorov and a partner, Vladimir Potanin, saw an opportunity. They engineered the purchase of Norilsk Nickel mines in Siberia through the then-small Uneximbank. He was 28 at the time, Potanin slightly older.

It was a bargain, but hardly an instant bonanza. Workers hadn’t been paid for six months and the arctic terrain was polluted beyond most Westerners’ comprehension, according to published reports. Early on, Prokhorov was Mr. Inside at Norilsk, working on pollution control and financing, among other things, and negotiating with Soviet-spawned labor unions on compensation.

Prokhorov doesn’t apologize for buying up dilapidated Soviet era properties for a song. He followed the rules, he will tell you. Some oligarchs succeeded more than others. He succeeded the most. He is credited with turning the inefficient Soviet nickel mines into one of the world's largest and most profitable natural resource corporations. And over the past decade he expanded his holdings to include palladium, gold and bauxite, from which aluminum is made.

(Not everything at Norilsk is yet up to Western standards. In spite of large-scale spending on pollution control technology -- about $100 million, according to the New York Times --  the company is still one of the world's worst polluters, emitting nearly 2 million tons of sulfur dioxide annually, more than the entire nation of France.) 

Detained, then honored
Prokhorov became more than just an intriguing industrialist in January 2007, when he was detained for allegedly arranging prostitutes for guests at his annual two-week long Russian Christmas party at the French Alps resort of Courchevel. He was released without charges after spending four days in jail, and none of the women was charged. He later received an apology from French authorities, apparently arranged by Russian Prime Minister Vladimir Putin. By 2011, he had been awarded the French Legion of Honor for arranging cultural exchanges.

Reports on the affair by French and Russian publications offered jaw-dropping glimpses of Prokhorov’s gilded lifestyle. Paris Match reported that when the women were detained and their luggage searched, lucrative gifts were discovered, valued at between 20,000 and 300,000 euros (approximately $25,800 to $387,000 at the exchange rate at the time). Komsomolskaya Pravda reported that Prokhorov engaged a "face patrol" at his favorite Courchevel haunt, "Les Caves," to filter out all but the most beautiful people.

He shrugged off his four days in French jail, noting that he had been a Soviet conscript.

Then there was the time he soiled one of the Soviet Union's -- and Russia's -- most historic icons: the Aurora, the Russian cruiser that fired the cannon blast that launched the Russian Revolution in 1918. Prokhorov rented the vessel permanently moored in St Petersburg in June 2009 for an evening of merrymaking to celebrate the first anniversary of his new magazine, the Russian Pioneer. The party became so rowdy that several millionaires jumped or fell into the Neva River and had to be fished out by authorities. Museum artifacts also were reportedly damaged.

Prokhorov’s reaction to the resulting controversy? He offered to buy the ship and restore it.

He is not beyond anger, though. When his sister was harassed and insulted by local youths at a Prokhorov Foundation event in 2009, he threatened business rivals who he said had paid them.

 “Since I was a child, I had a rule -- to punish crudity and disrespect towards women,” he wrote on his blog, according to a translation by the ReadRussia blog. “I see one simple and effective way to handle it: If the two gentlemen who financed this PR campaign do not apologize to my sister in the next two weeks, I will do what every man should: I will personally beat the @!$%# out of them."

Asked later if he was serious, he responded, "Do you have any doubts? Those responsible made their apologies to Irina."

All of this made him famous, at least in Moscow.  He was satirized on Russian television for his lavish lifestyle and his reputation as "Russia’s most eligible bachelor."

It also caused him problems with the prudish Kremlin. He was pressured to sell his 25 percent stake in Norilsk to another oligarch, Oleg Derispaska, the owner of RusAl, the world’s biggest aluminum manufacturer. Propitiously, the deal was completed just before the 2008 economic downturn, resulting in a bonanza for Prokhorov. He received nearly $5 billion in cash as well as stock in Polyus Gold and stock and debt in RusAl, now the main sources of his net worth. 

At that point, there was no stopping him. At a time when no one had cold hard cash, he was flush. He shrewdly diversified. 

By 2009, he had controlling interests in metals companies (Polyus Gold, UC RusAl), banks (Renaissance Capital, MFK Bank), media outlets (RBC, Snob and Russian Pioneer magazines, FIT television channel, F5 web portal/newspaper), insurance (Soglassye), real estate (OPIN Investment and Development Group), electricity production (Quadra) and LED technology (Optogan).

He also established a personal investment vehicle, ONEXIM, to control his various assets.

Entering the international arena
Then, in 2009, Prokhorov stepped onto the international stage.

The New Jersey Nets were a mess, stripped of talent and suffering through a 12-70 season under owner Bruce Ratner, who had suffered enormous losses as he tried to move the team from northern New Jersey to a $6.4 billion real estate development in Brooklyn called Atlantic Yards. But five years after the 22-acre project had been announced, lawsuit after lawsuit had caused delay after delay. To make things worse, Ratner faced a Dec. 31 deadline to sell $500 million in tax-exempt bonds to build the Nets’ arena, to be called Barclays Center. Without them the project was going to die not with a bang but a whimper. And 2009 was not an auspicious time to get financing for anything, let alone a beleaguered basketball arena.

Enter Prokhorov, who had played basketball and previously owned Euroleague power CSKA Moscow. He had been interested in buying the Knicks, but the Dolan family wasn’t selling. (Later after buying the Nets, he erected an 18-story billboard featuring him and business partner Jay-Z outside James Dolan’s offices at Madison Square Garden.)  An investment banker suggested an alternative, mentioning Ratner and his troubles.

A deal was stuck over dinner in Moscow, and it was every bit as shrewd as any of Prokhorov’s Russian maneuvers. According to ONEXIM and Nets officials, he laid down a little more than $200 million in cash and got 80 percent of the team; 45 percent of the billion dollar arena, and an option to purchase up to 20 percent of the overall Atlantic Yards project at a bargain basement price. In exchange, he agreed to assume 80 percent of the team’s astronomical debt load -- more than $221 million -- and pay up to $60 million to cover losses while the team was stuck in New Jersey. He also paid a $4 million buyout fee so the team could move out of its isolated and decrepit digs near the Meadowlands and into Newark’s gleaming new Prudential Center. Moreover, when bond rating agencies wouldn’t give the arena bonds an investment grade rating, Prokhorov agreed to sink another $76 million into the project. (He wasn’t doing it for charitable reasons. If his partners can’t pay it back at 11 percent interest per annum, he gets 80 percent of the arena.) 

Within weeks, a key eminent domain case was finally dismissed, the bonds sold and his investment was well on its way to his goal: a billion dollar valuation within five years.

When asked by a reporter at a May 2010 press conference in New York if his purchase was part of a larger effort by Russian oligarchs to buy up Western sports teams, he smiled and drolly intoned, “Please tell America, I come in peace.”

After he videotaped a message in his sister’s kitchen promising a championship in as little as one year and no longer than five, his reception from long-suffering fans long-suffering bordered on obeisance. At his first game as the team owner in October 2010, a steady stream of them approached the owner’s suite and thanked him profusely for buying the team. (Inside, bottles of Lafitte Rothschild 1982, valued at about $5,000 a pop, were scattered about for his guests.) 

One night a couple of fans found themselves on a train from New York to Newark with their favorite team’s owner and his entourage. The reason? When it looked like traffic would prevent his caravan of limos from making the game, he had jumped on New Jersey Transit. His spokesman distributed a video of the trip showing one of the world’s richest men standing in the aisle of a New Jersey commuter train, joking in Russian with his friends. 

He agreed to a “60 Minutes” profile that showed him in a trendy Moscow nightclub with scantily clad women half his age, posing with an AK-7, jet-skiing in the Maldives, working on his kick-boxing skills and claiming he really didn’t know where his yacht was -- it was docked in the south of France and available for lease for $325,000 a week. It was masterful image-making. Later, there was an only slightly tamer profile in the New York Times Sunday Magazine, headlined “An Oligarch of Our Own” The cover featured him legs spread slightly apart, looking ahead and holding out two basketballs as if astride the NBA world. 

Suddenly, the guy who dealt with gritty environmental problems at a mine north of the Arctic Circle was not just an NBA owner, but a bona fide international celebrity. Everyone wanted to meet him.

Maintaining mystique
Despite his fondness for the limelight, Prokhorov remained private in ways. He might spend nearly $18,000 on lunch at a Midtown restaurant, but it was the restaurant owner who bragged about it to the New York Post, not Prokhorov. He might spend $30 million on a vacation with friends in the south of France, as French media reported, but he wouldn't confirm it or boast about it. Of course, he didn't deny it either. He understands mystique.

Before entering politics, he refused to identify his favorite author, his favorite fictional character, even his favorite color. He said he didn't want the media or public to be aware of his "cultural biases." He did identify a favorite quote, from a French author: "Good advice is something a man gives when he is too old to set a bad example.

He still hasn’t revealed his favorite color but he did disclose that he is an atheist and that his favorite book is Aleksandr Solzhenitsyn’s “One Day in the Life of Ivan Denisovich,” the magisterial work on life in Stalinist labor camps.

Prokhorov’s entry into Russian politics was similarly contradictory. A week after denying he had any interest in politics, he agreed this spring to head a small right-wing political party called “Right Cause.” it was seen as part of the Kremlin’s “managed democracy,” that is a party created to give the country’s leaders “friendly opposition” from the right.

He even met with Russian President Dmitry Medvedev at the latter’s residence, where Medvedev praised him as “quite revolutionary” and arranged a photo op in which the two were seated across a table -- better than a side by side standing shot, since Prokhorov is a foot and a half taller than Medvedev.

Everything seemed to be going swimmingly as summer progressed.  Prokhorov poured money into the party, giving it publicity. He resigned as the head of his investment vehicle, ONEXIM, to devote all his time to politics. 

But in fall, something changed. Vladislav Surkov, who as head of presidential administration is in charge of the Kremlin’s “managed democracy,” began calling on the phone, Prokhorov later said, demanding changes in party personnel, in the party’s list of candidates.

Pushed by the Kremlin, the party finally ousted Prokhorov as leader in September.

Prokhorov responded by holding a news conference where he blistered Sukrov as the Kremlin’s “puppet master,” although he pointedly did not criticize either the president or prime minister. Then he dropped out of sight.

In apparent retaliation, Medvedev removed him from the Russian modernization commission and, ominously, Prokhorov’s application to have Polyus Gold listed on the London Stock Exchange was inexplicably delayed.

But as resentment mounted after Putin’s announcement of his candidacy for president on Sept. 24, Prokhorov got back in, declaring himself an independent candidate for the office.

Some critics see a Machiavellian hand behind Prokhorov’s political rebound, suggesting he is a “stooge” set up by the Kremlin to draw votes away from other opposition parties. He and those around him deny it.   

In the unlikely event he is elected president in March --  polls show him with numbers in the low single digits -- there are some hints of what a Prokhorov presidency  would look like:

By all accounts, he is calm in even the worst crisis and demands from his aides that they have Plans A, B, C, etc., at the ready.

He is not a hands-on manager, preferring to trust a cadre of loyalists in their 30s and 40s to run his companies. But if he doesn’t like what he sees, he is quick to let someone go. The day he took over the Nets, he summarily dismissed the coach.  

He is not a technocrat, having only lately begun using a cell phone. Although he claims he does not use a personal computer (too much information) and writes out his thoughts on yellow legal pads, his staff maintains both a personal website and a personal blog, regularly posting how he feels on life and business. He has recently branched out into Facebook and Twitter, but only because of politics. He told reporters in 2010, “I know of this iPad. I hope we never meet.”

On the other hand, no NBA team makes more use of the iPad, even drawing up plays on it. And he’s not afraid to invest in new technologies. His latest venture is a $150 million investment in an electric car called the “Yo,” which will go on sale later this year.

Politically, he is described as right of center, but liberal, somewhat like another basketball playing pol, Bill Bradley. He was friendly with Yelena Bonner, the late human rights campaigner and widow of Andrei Sakharov. He financed a memorial to Stalinist repression deep inside Russia.

He has said he won’t criticize Putin, but has also said the system will collapse in five years unless it’s dramatically reformed. He calls himself a serious candidate and has vowed to give up partying if elected. He told one interviewer he may even marry if Russia feels it needs a first lady. Most recently, he has been seen in the company of Ksenia Sobchak, described as the Russian version of Paris Hilton, having posed for Maxim magazine. 

Yet his quest for the presidency seems quixotic at best, cynical at worst. He still believes in the power of money. Shut out of state television, he tried to buy TV Rain, an independent satellite and online television operation. When that failed, he tried to acquire Kommersant, the Russian equivalent of the Wall Street Journal. No sale there either.

So he is resorting to using the social media. He has a YouTube channel where you can watch “This Week in Prokhorov” or his latest commercial, where dressed casually in a letter jacket and white shirt, he tells voters, “I want to work for you.”

He also makes clear that he wants to reform the system, not overthrow it. After all, few if any, have benefited more.

“Revolution in Russia always resulted in loss of life and reduced living standards,” he wrote recently on his blog.

He also indicated in other recent entries that he believes he is the right man to lead his country through what he sees as a pivotal period.

 “I believe that the next president must find in himself the will and courage,” he wrote. “And the people must clearly explain their vision and their actions. If he is honest, he will understand.”

“… As president of the various structures -- in business, and not just business -- I have often resorted to the unpopular measures. Yes, it's difficult. Yes, sometimes you come across a lack of understanding and acceptance even in the immediate vicinity. Yes, sometimes you're risking much …on a grand scale, sometimes everything. But when you can clearly see the situation, you see that there is no alternative but  to do this.”

Robert Windrem is a senior investigative producer for NBC News and a Nets season ticket holder.