FROM RUSSIA WITH DREAD
As the ‘90s gave way to the new millennium, Electro-Harmonix continued to flourish. Classic products were reissued and totally new pedals were brought to market as the company’s product line grew. By 2005 the Electro-Harmonix pedal line had grown to over 40 SKUs. Nevertheless, vacuum tubes imported from Russia continued to be the main part of EHX’s product mix, and the company’s portfolio featured fabulous vacuum tube brands: Electro-Harmonix, EH Gold, Genalex, Mullard, Sovtek, Svetlana and Tung-Sol.
In 2005 Mike’s Russian tube factory employed over 800 skilled workers and sold about 170,000 tubes a month. Production had grown some 300% since he bought the ExpoPul factory in Saratov in 1998, making it the largest producer of vacuum tubes in the world.
At that time in Russia, corporate raiders who engaged in nefarious practices were taking over businesses right and left, and white-collar corruption backed by racketeer muscle was rampant. RBE (Russian Business Estate), a company headquartered in Samara, began raiding Saratov-based companies.
As Mike tells it, “The Reflektor complex housed a huge electronics conglomerate that made optical products, clocks, integrated circuits, vacuum tubes and a lot more. Our vacuum tube factory was the largest part of it. RBE bought up the rest of the Reflektor complex including the utility company, RefEnergo, that provided power for the entire compound. They wanted to buy ExpoPul and made me an offer of $400,000. The factory had cost me more than that in 1998 and now had a turnover of $600,000 or so a month, but I had no intention of selling, anyway! RBE approached the director of the factory, Vladimir Chinchikov, and told him, ‘Matthews better sell. If he doesn’t, we’re going to make big trouble for you!’”
“RefEnergo was now a subsidiary of RBE and they sent us a letter saying our factory’s electricity would be disconnected on January 1, 2006.” As Mike describes it. “There are two kinds of energy that RefEnergo provided, primary, which is electricity, and secondary which are gasses like hydrogen, nitrogen, oxygen, etc. They made a mistake, though, because by law they were not allowed to shut off our electric power. Then they backtracked and said they really meant our secondary energy would be turned off because of the need for refurbishment, but they screwed up again because they hadn’t notified other secondary energy users that they’d also be cut off!”
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Not willing to be intimidated or to give in to racketeers, Mike launched a dynamic, multi-faceted public relations campaign which he labeled “Rock ‘n’ Roll versus Racketeering.” As he puts it, “The chief executives of our biggest tube customers agreed to write letters on our behalf—Peavey and Fender here in the USA, Vox UK, Korg Japan. The letters were sent to important Russian officials including the Governor of Saratov, the Minister of Internal Affairs, the Chief Prosecutor and Putin’s appointee who was the head of the Volga region where our factory and RBE’s headquarters are located. The U.S. Embassy also worked closely with us and William Burns, U.S. Ambassador to Russia, sent letters to the Governor of Saratov and other high-level Russian government officials, voicing his concern and support for us.”
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Mike appealed to Russia’s Anti-Monopoly Commission and Arbitration Court and won strong decisions from both, but RefEnergo shut off ExpoPul’s electric on March 29, 2006 boasting to Chinchikov that they’d succeed because they’d paid everyone off! On April 5, Saratov’s Governor Ipatov ordered ExpoPul and RBE to meet at government offices. The next day, as the Governor was getting electricity restored, the gas was shut off. Mike recalls, “Another appeal to the Governor got the gas turned back on, but Russian gangsters began loitering outside the factory while others used jackhammers to stir up dust and disrupt the tube making.”
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On April 7, more than 800 ExpoPul workers wielding banners marched in front of the Saratov government complex to protest the attempted takeover. Interviews and articles in music-oriented and mainstream media, including the New York Times and MSNBC, brought additional focus on the struggle, Mike’s voice—and the voices of the ExpoPul workers—were being heard.
Nevertheless, the struggle did not end there. RBE sold their Reflektor holdings, including RefEnergo, to another nefarious organization, SDM, Samara Business World. SDM also engaged in cutting off the factory’s energy resources and sued ExpoPul for “stealing” hydrogen. In their attempts to create a maelstrom of negative public opinion, and ultimately force Mike to sell, they created stories about an American spy network in Saratov and how the region had been influenced by American interests. They went so far as to publish a forged letter from the U.S. Ambassador to Russia, William Burns. The State Department confirmed it was a forgery and described how Ambassador Burns had actually left his post in Russia before the date the letter was allegedly written and signed!
Ambassador William Burns was confirmed as Director of the Central Intelligence Agency on March 18, 2021.
Ultimately, right would prevail and the theme would shift to Rock ‘n’ Roll Routes Racketeers… but only after a tough fight. Sadly, Saratov’s Chief Prosecutor who supported the workers at ExpoPul was assassinated and paid for the victory with his life. It brought a somber new meaning to the phrase “hostile takeover attempt.”
THE ROAD TO STALINGRAD AND THE COURSE TO KURSK
Mike’s a student of history and well-versed on World War II, including battles fought by the Russians and Nazis. He’s also an avowed admirer of General Georgy Zhukov, the preeminent Russian military leader who oversaw many of the Red Army’s most decisive victories including those at Stalingrad and Kursk.
After ExpoPul thwarted the racketeer’s illicit takeover attempts, Mike sponsored two celebratory trips by Saratov older teenagers, the children of ExpoPul workers, to visit historical cities in the Soviet Union. For the first, a busload traveled from Saratov to Stalingrad, the location of one of the longest and bloodiest engagements in modern warfare. As Mike explains, “About two million people were killed or injured, but the Battle of Stalingrad ultimately turned the tide of World War II {referred to by the Russians as The Great Patriotic War} in favor of the Allies. I wanted to honor the surviving veterans of the Stalingrad battle and celebrate our own victory. The teens wore tee shirts emblazoned with the inscription, ‘Rock & Roll Routs Racketeers.’” They toured historic sites, visited the Veterans’ Hospital and gave presents to all the surviving veterans of the Battle of Stalingrad. Old and young met and mingled as the different generations had a chance to connect.”
The Battle of Kursk took place during the summer of 1943, after the Battle of Stalingrad. As Mike explains, “It was the largest mechanized battle in history. Some 6,000 tanks, thousands of cannons and rocket launchers, 4,000 aircraft and 2,000,000 troops were involved. The Russians, relying on important intelligence information, were well prepared and their victory marked the decisive end of the German offensive capability on the Eastern Front. It was Hitler’s last gasp and the Nazis never recovered.”
Two busloads of students from ExpoPul, plus a Saratov rock & roll band, made the ten-plus hour trip from Saratov where they were hosted by the University of Kursk. The occasion was Victory Day, the Russian holiday commemorating victory over the Nazis.
With a rock band from Kursk joining the festivities, students from Saratov and Kursk partied together in the university’s arena as they celebrated Victory Day and ExpoPul’s victory in Rock & Roll Routes Racketeers.
The next day, they toured the city, visited the local Veterans’ Hospital and brought presents to the surviving soldiers. Mike explains, “As with our visit to Stalingrad, I wanted to honor the survivors of the historic battle that took place in Kursk and also celebrate our factory’s fight to prevail, and provide ongoing employment to its 800 plus workers.”
