Controversial Oligarch Makes Play for GM's Hummer
Oligarch barred from the U.S. reportedly keen to buy struggling brand.
August 12, 2008— -- U.S. car buyers may have soured on the iconic gas-guzzling brand Hummer, but a controversial Russian oligarch barred by the State Department from entering the U.S. may be keen to buy the struggling mark, according to Russian press accounts.
Moscow-based Russian Machines, owned by multibillionaire Oleg Deripaska, is one of a handful of companies vying to purchase the Hummer brand from General Motors, Russian business publication Vedomosti reported.
In lawsuits in the U.S. and Great Britain, business rivals have accused Deripaska of bribery, extortion and other unsavory business practices. None of the claims have been substantiated, and no successful suit against Deripaska has been reported.
According to the German publication Der Spiegel, law enforcement officials in Germany have suspected the oligarch of having ties to organized crime, though they have not brought any charges against him. The U.S. State Department revoked Deripaska'a entry visa because of questions concerning the alleged ties to organized crime and concern about whether he had been honest in his statements to the FBI, according to the Wall Street Journal.
In an email to ABC News, Sergey Babichenko, a representative of Deripaska-owned Basic Element, the parent company of Russian Machines, said that the allegations against Deripaska are "groundless…insulting and false, and we vehemently reject them."
Babichenko also wrote that "Mr. Deripaska is a respected member of society, a leading Russian businessman, a philanthropist and an outspoken champion on vital global issues of sustainable development and climate change. He has never been convicted of any crime." He did not address reports of Deripaska's interest in buying Hummer.
The allegations add a layer of irony to the possible purchase, as the Hummer has been popular with the would-be outlaw set in the United States. Gangsta rappers like now-deceased Tupac Shakur and "Gangster's Paradise" artist Coolio owned Hummers, as did Christopher Moltosanti, the young ill-fated capo in HBO's The Sopranos.
Coolio reportedly gave up his Hummer several years ago, complaining about the cost to maintain and fuel it.
GM has confirmed they have interested buyers, but a spokesman would neither confirm nor deny that the company had talked with Deripaska. "We haven't announced any of the discussions that have taken place with any outside parties that are interested in the brand," said Hummer spokesman Nick Richards.
This would not be the first time Deripaska made a pass at a member of the U.S. auto industry. In 2007, he announced plans to buy a majority stake in a firm that at the time was a front-runner to purchase the U.S.-based Chrysler Group, a division of DaimlerChrysler AG. The deal did not go through.
GM bought the Hummer name in 2000 from AM General, who manufactured the original military Humvees for the U.S. government as well as the first civilian Hummer model, the H1. Civilian Hummer models have some of the worst mileage on the road, sometimes getting as little as 10 miles to the gallon.
The cars have seen a 60 percent dropoff in sales recently, as the price of gas has skyrocketed.
The original post for this report was updated on 08/13/08 after receiving a response from Mr. Deripaska's representative.