YOUNGSTOWN, Ohio – It’s 10 a.m. on a Monday in late July, and the Stone Fruit Coffee shop on the campus of Youngstown State University is busy. One or two customers have their laptops open, while others are focused on their smartphones or conversing.
At one side of the coffee bar near the entrance is a small placard that reads “Reserved for Frank.” Perhaps the sign is in jest, but just partially so.
Every Monday at approximately this time, Frank Petruzzi settles into one of the bistro’s stools, kicks on his tablet, and connects with three business associates located in major global financial centers: Geneva, London and Moscow.
“I call it the meeting of the Big Four,” says Petruzzi, a Youngstown resident who spent 25 years living and conducting business deals in Russia.
The partners are engaged in a high-stakes deal involving a complex project with significant global ramifications. Petruzzi is part of a consortium led by U.S. investor Stephen Lynch to acquire Nord Stream 2 – the inactive natural gas pipeline that stretches from Russia to Germany under the Baltic Sea. An undersea explosion in September 2022 destroyed one of the pipeline’s trunks, but the second line remains intact.
Nord Stream 2 was completed by a subsidiary of Russia energy giant Gazprom before that country’s invasion of Ukraine in 2022. The gas lines, however, were never commissioned, and the subsidiary filed bankruptcy in Switzerland shortly after the invasion.
Petruzzi and his group would like to see this pipeline activated under the management of U.S. investors. “The goal is to get that pipeline under the control of a U.S. group,” he says.
That won’t be easy, Petruzzi acknowledges. Since the pipeline is subject to U.S. sanctions, any attempt to purchase it would require the approval of the U.S. Department of Treasury. Investors submitted an application to Treasury last year seeking government clearance, but the request has yet to be approved. “We need to have approval from the Treasury Department to do anything we’re doing,” he says. “And what we’re doing is buying distressed Russian assets.”
Complicating matters is the ongoing war with Ukraine, now approaching its third year. Any deal would likely be contingent on a prolonged ceasefire or an end to the war itself. Moreover, the idea is receiving pushback from political leaders in Germany, who after the Ukrainian invasion announced a policy to phase out purchasing direct supplies of Russian natural gas. Russia responded by entirely closing off the spigot of natural gas flow to the country.
Germany has since sourced a sizeable amount of energy in the form of liquefied natural gas, or LNG, from the United States. Activating Nord Stream 2 would likely reduce demand for LNG imports, impacting U.S. suppliers.
“Right now, LNG is big business,” Petruzzi says. “We don’t want to cut them out. We need to have them involved.” American control of Nord Stream 2 would at least allow U.S. interests to manage the flow of natural gas to Europe.
Another challenge is convincing Russian leaders of the deal’s benefits, Petruzzi says. “It’s still Russian gas flowing through there,” he says. Or the gas could be purchased by Nord Stream’s U.S. operators at the border and then transported to Europe. “It would be a win for everybody,” he says.
An American in Russia
Petruzzi, a 1974 graduate of Chaney High School and YSU alum, earned his law degree from the University of Akron and for a decade practiced as an attorney in the Mahoning Valley.
“The first five years were pleasant, but over the next five years, I decided I needed to get away from the law.”
His affinity with Russia began in 1988 – then, the core of the Soviet Union – when he was asked to help shepherd a group of retired journalists to Moscow. His predisposition of the country was such that he feared the likelihood of being imprisoned or forever trapped within the “evil empire,” a term coined by former U.S. President Ronald Reagan during the 1980s at the height of the Cold War.
Conditions then were deplorable, Petruzzi recalls, as a deep recession gripped the country. “We could see that there was no meat, no batteries,” he recollects. Clothing was also in short supply.
“The people couldn’t have been more hospitable,” Petruzzi says. “They were tremendous.” Even in this era of scarcity, he says, the Russian people went out of their way to share what food and resources they had with the Americans. “Consequently, I was hoping to return.”
His increasing disenchantment with the legal profession, along with a profound sense of wanderlust, placed Petruzzi on a course of returning to Russia.
After closing his law practice, Petruzzi was accepted into the Peace Corps in 1994 to serve in its business assistance program in what was now the Russian Federation, three years after the Soviet Union dissolved. He worked out of an office in Nizny Nogorod, the sixth largest city in Russia.
At the time, however, Russia was in chaos as it transitioned from a Soviet to market economy, presenting an open season for widespread corruption in business and government, Petruzzi says. As a Peace Corps volunteer, Petruzzi wasn’t on a payroll, and admits there wasn’t much work. “I lost 25 pounds,” he says with a laugh.
International Career
But Petruzzi did make friends and connections there and wanted to return once his two-year tenure in the Peace Corps ended.
Upon arriving back in Youngstown, he immediately searched for a pathway back to Russia, and applied for a position in Moscow advertised by accounting giant Deloitte & Touche. “I got a reply from them that invited me to come to Russia for an interview,” he recalls. “They said we think you’re the man for the job.”
Petruzzi boarded a plane to Moscow at his own expense, where he met with the firm’s human resources officer. “Within five minutes, he took a look at my file and said, ‘I think we made a terrible mistake. You’re not the person we wanted to invite.’”
Devastated and nowhere else to turn, Petruzzi visited the Peace Corps’ central office in Moscow. “I went to the office because I knew everybody there from when I was a volunteer,” he says.
As luck would have it, the local operation was searching for an attorney to work on a property development project for their new office. “So, they hired me,” he says. “I worked on the project for six months and got my own apartment.”
His work on the Peace Corps project set in motion a series of events and business deals that would dominate the next 25 years of his life. “I was unemployed a lot,” Petruzzi says. “But when I worked, I worked hard and got paid a lot.”
Often, his work centered on helping small businesses that were in trouble or programs that might have run afoul of the Russian government. Networking proved the most valuable marketing asset in obtaining new projects, Petruzzi says, as one project referral led to another, especially in real estate or property development.
“It was all word of mouth,” he recalls. “There was no listing guide, no internet back then. It was all about speaking with people who might know of some property to rent, lease, or buy.”
Then, in 1998, Petruzzi took a job working for a consulting company based in Washington, D.C., and opened an office in Samara, about nine hours southeast of Moscow along the Volga River.
The idea was to work with American companies that wanted to establish business roots in Russia, and everything appeared to be moving in the right direction.
“I started the job in June,” he recollects. “In August, the banking system in Russia collapsed.”
Finding His Footing
For months, Petruzzi had to manage an office and Russian employees with no money. More importantly, his staff agreed to work without pay until the operation could once again generate revenue. “They worked for free,” he says, still amazed by their dedication.
Petruzzi bartered for equipment and diffused a particularly tense situation with the landlord’s henchmen who sported “biceps the size of Texas” by convincing the property owner to award his office a forbearance agreement. Gradually, the banks began to reopen, and Washington resumed payments to the office.
Petruzzi described Samara as similar to New Orleans in terms of its nightlife and bustle, just the opposite of the typical Russian city, which are often caricatured by Western nations as dull and dreary. “It was a party town,” he says. “I made a lot of friends there and it was a really great time to be alive.”
Moreover, business improved in the wake of the banking crisis. Among the U.S. companies Petruzzi worked with were Delphi Automotive Systems, which had recently spun off from General Motors Corp. Other companies such as Corning located operations in Russia. Once the economy began to stabilize after the crisis of 1998, more Americans were lured to Russia in search of business opportunities.
One was Steve Brown, a partner at Solntse Mexico, who helped establish the first tortilla chip factory in Russia. “We grew it for 10 years and ended selling it to Mission Foods,” he says.
Brown, today a resident of the Finger Lakes region in New York, says he and Petruzzi worked on several projects together. “Frank was involved in a lot of real estate development stuff, so he helped me a bit with a factory that we built out in the 2000s,” he recalls.
At the time there were a core group of foreigners that had worked in Russia for a decade or more, Brown says. Petruzzi became a close friend, since both had been Peace Corps volunteers. “Our experience there was incredibly positive,” Brown says. “We were able to grow and bring interesting products there. People were getting a bit more money in their pocket every year. Doing business there was fascinating.”
By this time, Petruzzi had relocated to Moscow, where he would spend the next 21 years working from project to project, including a United Nations effort that ultimately was scratched. Russia’s tax system was simplified to a 13% flat rate, he says, which helped ease the burden of working Russians who still benefitted from universal health care. Corruption too eased after Vladimir Putin became president during the early 2000s, he says, and the economy expanded.
It opened the door for Petruzzi to work with private Russian companies – even a Russian oligarch. “I understood the property market, and I had a knack for getting things done right,” he says. At night, Petruzzi taught classes at a Russian law school.
His return visits to Youngstown after 2010 became more frequent as he began to care for his ailing parents. “I came back 22 times in two years,” he says,
noting by this time internet service enabled him to work from anywhere in the world.
He left Russia for good in 2021, as the Covid-19 pandemic swept the globe. Further complicating his return to Russia is the war with Ukraine, he says. “I had every intention of returning as soon as Covid was over, and then the war started,” he says.
Still, readjusting to life in the U.S. proved somewhat difficult after living in Russia for 25 years. “I felt like Rip van Winkle,” he says. He nevertheless reacclimated with the help of friends in the area.
Today, his friends in Russia report that the situation in Russia ranges from “less optimistic” to an economy that is buoyed by Russians all over the world who are reinvesting their cash into the home country for fear of bank accounts being seized by western governments. In turn, western sanctions affecting the flow of imported goods and those produced by foreign companies that have since pulled out have forced Russia to manufacture products domestically.
Russia has historically had a hot and cold relationship with the West, says Brian Bonhomme, a professor at YSU who specializes in Russian history. “That’s carried on to the present day,” he says.
In the wake of the war with Ukraine, more Western business interests have pulled out of Russia, Bonhomme says. But Russia has made strides toward developing a long-term trade relationship with China, as demand for oil and gas resources could be a boon for new business. “It seems that Russia has made a choice, or has been pushed in to making a choice, to ally itself more with China,” he says.
Petruzzi says there are several other deals with Russia his group is working on, but declines to elaborate. “Nothing can be done without approval from the U.S. Treasury. It’s a bit of a tightrope walk.”
The repatriated American nevertheless says he misses the excellent transit system, the Russian people, theaters, music and the Moscow Circus. “On the plus side, Youngstown restaurants can compare with anyplace I’ve been in the world,” he says. “And I don’t miss a meal.”
Pictured at top: Frank Petruzzi of Youngstown lived in Russia as a businessman for 25 years. He’s now working with a group interested in acquiring the Nord Stream pipeline.