Thrills and spills at Moscow's hotel of presidents

The accommodation is first-class, but watch out, there may be guns about. Stewart Hennessey reports

T he morning of 12 April 1995: the seventh floor of the Radisson- Slavyanskaya in downtown Moscow, one of the world's plushest hotels. Paul Tatum, an American businessman, has slipped off his loafers, put on his bulletproof vest and got out a power-drill. He's forcing his way back into the office he was barricaded out of by his Russian partners five days earlier. Paul Tatum is co-owner of the Radisson-Slavyanskaya hotel.

The noise and vibrations last an hour. Nobody wants to take on Tatum's armed bodyguards. Across the hall Yevgeny Davydov, a hotel tenant, sifts through papers, barely glancing at the theatrics. "Did you read about the businessman shot yesterday on the street?" he smiles. "To me, this is pretty normal."

Some might say it would be normal if Paul Tatum were shot in the street. Fortunately, he rarely ventures outside. The 39-year-old native of Oklahoma City fears for his life. He spends most of his time under siege, but in the most luxurious bunker imaginable; suite 850 of the hotel.

He took the suite by force after his partners barred him from the building on 4 June last year. On the 15th, he barged back with 25 armed guards. "I tried the legal path first," says Tatum. "And I discovered that the law here is the law of the gun."

The fight between Tatum and his former partners for control of the hotel is the most closely watched business feud in Russia. The first American- owned hotel in Moscow - and now the only one - was once a litmus test for Western/Russian joint business ventures. Now it is a soap opera, rumbling on and on, then exploding into unexpected climaxes.

The acrimony crept in a few months before the hotel opened in July 1991. A $43m credit package proposed by Tatum and the other American partner, the respected family-owned American hotel chain Radisson, fell apart. Suspicion and bitterness ensued as all funds were haphazardly drawn from all available cash flows.

While the two US partners locked horns, the Russian side quietly changed faces and attitude, and threatened to dissolve the joint venture, resell the property and override the newly signed 20-year lease.

On Valentine's Day this year, one of Tatum's guards was stabbed in the chest. Stationed outside Tatum's suite, he was supposed to use Tatum's bathroom when nature called, but at 6am he thought it would be safe to use a nearby ladies'. As he was leaving, a man with a scalpel inflicted a wound to his upper right chest. It penetrated almost three-quarters of an inch and required 32 stitches.

"The attacker said: 'Take a message to Paul: it's high time he went home'," says Tatum. He speaks with defiance. "I'm here till they carry me out."

On May 30 1990, at a summit with Mikhail Gorbachev, George Bush, then US president, mentioned the Radisson-Slavyanskaya as a symbol of a bright new era in East/West co-operation. The hotel opened a year later and the dismal failure of the partners to get along since is also seen as symbolic - symbolic of a nation where hope has gone to rot.

The monstrous building retains enormous significance in Moscow. Everyone knows the Radisson. President Clinton stays here when he is in town, and the US Vice-President, Al Gore, and Secretary of State, Warren Christopher, are regular guests. Which may explain why the US embassy and the White House refuse to comment on the increasingly grubby fight for control.

Court actions, law suits, counter-suits, slurs and statements that would be regarded as unequivocal libel in the West have spawned a thousand stories in the local press. All matters revolve around financial impropriety and no side has yet won.

The only thing partners agree on is that the complex makes money - the Radisson claims the highest occupancy rate of any hotel in Russia. Tatum believes that many guests are attracted to the hotel because it houses the American Business Centre - his main stake in the venture. The centre provides modern telecommunications and computer technology to foreign businessmen in a city where equipment is shoddy.

The hotel also has a cinema, bank, swimming pool, the foreign press club, media bureaux (including the BBC, Reuters and CBS) and a plethora of bars, restaurants and shops. With its marble floors, string quartet in the main bar, international flags and a mixture of well-heeled patrons, it should be an elegant global village.

But little things are out of place. The bottles of Bud in the main bar have "Duty Free" stamped on them. The super-expensive designer shops are invariably empty.

Tatum's main adversary is the Moscow city government. The Russian stake in the venture has always been owned by a wing of local government, though the names and faces change. The six-man board of directors, half-Russian, half-American, has seen only four Westerners pass through it in five years, while more than 20 Russians have come and gone. Radisson wants to sever ties with Tatum and favours the city's plan to sell the hotel for $60m. Radisson would continue managing the premises afterwards.

The hotel chain has kept a low profile. One insider says: "Radisson is paranoid about protecting its brand name. We ought to take a more aggressive attitude to Tatum."

In June this year Tatum scored an important point - a local court decision granting the Russians the right to evict him from his office was overturned by a higher court. July came and went and the local court had not sent anyone to the higher court to pick up the paperwork that will compel them to grant Tatum access.

He is not worried. That argument, centring on $300,000 back rent, is a sideshow, barely noticeable amid the multi-million-dollar claims being thrown around with abandon. Tatum left his office after his phone and electricity were disconnected but he can conduct business almost as usual from the suite above his office.

More significantly, the higher court also agreed to Tatum's request to have the whole argument settled in an arbitration court in Sweden. That battle could be the final one in the five-year war.

At any rate, the extrovert Tatum is relishing the fight. He sits in room 850 surrounded by sharp-suited bodyguards, Star Trek videos and CDs, holding meetings non-stop: "It's anarchy here. It's the last frontier, and I can make a difference," he says. He's determined to teach the Russians a lesson.

Downstairs in the bar, there is a consensus among ex-pats: many Western businessmen have ploughed money into fledgling joint ventures only to be squeezed out later by politicians and businessmen. The ex- pats know Tatum is a bruiser and that if anyone can take on the city government, it's him. A lot of disgruntled investors hope he'll give them hell.