Growing up in London during the real Cold War, I corresponded with my Muscovite second cousins, whose innocuous letters were written with Soviet censors in mind. When I finally met them during my first trip to Moscow in 1991, it was in their parents’ cramped gray concrete-block apartment in a mind-numbing stretch of residential buildings. We sat at their living room table knocking back vodka and eating heavy meat dishes with pickled vegetables. Between stories about the deprivations of Soviet life and my parents’ courtship, my relatives told me they believed my fiercely independent mother had been destined to escape the Soviet Union.
Although the great majority of Soviets may have been hugely materialistic because consumer goods had long been scarce, what you wore or in rare cases drove mattered little in one sense because almost everything was poor in quality and style. The change came almost instantly after the collapse of communism. A year later, the novelty of meeting a foreigner was gone and my relatives had many more questions about how much things cost in America. I also noticed a hint of disappointment. What kind of relative was I, the personification of the West for them, not to be driving a BMW or Mercedes, or even hope to acquire one soon? What did I think a degree in history and literature would do for my future? I was headed nowhere near luxury and they could sense it. Within the decade, my cousins, who worked for new private companies, had built themselves swank suburban houses, were vacationing abroad every summer and had lost almost all interest in me. Not that they had time anyway: the sink-or-swim atmosphere of the 1990s required those who wanted to win in professional life to work incredibly hard, especially if they weren’t among the lucky few positioned to profit from a disintegrating economic system—or criminals. The successful had little concern, let alone respect, for the huge mass who couldn’t graduate from the bankrupt Soviet way of doing things.
The return of capitalism, relentlessly denounced as the chief source of evil under Soviet rule, says more about the Russian people than about their economy, the current tooth-and-claw version of which shares underlying aspects of the Soviet and even tsarist versions. Among early critics of the social order was a minor nobleman named Alexander Radishchev, who made big waves in 1790 by publishing a polemic called A Journey from St. Petersburg to Moscow. Radishchev was among the first members of Russia’s intelligentsia, and many credit his book with marking the start of the country’s intellectual history. Stopping in villages along the road between Russia’s two major cities, its traveler protagonist depicts the misery of Russia’s serfs, who made up 95 percent of the population and were bought and sold as though they were property, with no say in their fates. Describing the estate of a landowner who flourished because he overworked his serfs, Radishchev wrote, “Do we think our citizens are happy because our granaries are full and their stomachs empty? Or because one man blesses the government, rather than thousands? The wealth of that bloodsucker does not belong to him,” he concludes. “It has been acquired by robbery and deserves severe punishment according to law.”11
Although Radishchev didn’t call for revolution—he blamed the nobles, not the tsar—his screed helped initiate a storied revolutionary tradition among critics of a regime whose aristocracy was subservient to its rulers in ways rarely seen in the West. In Europe, feudalism developed over centuries to include a tradition of obligation to peasants. By contrast, the concept of nobility was imported to Russia from a distinctly different world and installed by decree. One of the most important steps, by Empress Catherine the Great, instituted a charter of the nobility, a ranking system for the monarchy’s manipulation.
Not unlike the communists, who promised to right tsarism’s inequities, Putin—who has done more than anyone to reshape present-day Russia to his whim—said he’d establish a “dictatorship of the law” to level the playing field for all Russians. Like the Bolsheviks’ dictatorship of the proletariat, Putin’s system turned out to be all about dictatorship and very little about the law. The manner in which he took power had much to do with that. Plucked from obscurity in 1999 to become Boris Yeltsin’s chosen successor, Putin was a last resort when Yeltsin’s inner circle was panicking about being unseated by a rival political group. (That was when some political competition was still allowed.) More than anyone else, it was a single businessman—one who exemplified the term “oligarch” and even helped coin it—who was responsible for Putin’s appearance on the scene. There would have been no Putin as we know him without Boris Berezovsky, who was once called the godfather of the Kremlin—although “consigliere” would have been more accurate because the power broker’s influence was far from all-powerful.
Berezovsky’s balding crown and clipped, machine-gun speech was part of a brand most Russians associate with the perceived evils of the Yeltsin regime. In the 1990s, the fifty-three-year-old former mathematics professor owned a private car dealership, Russia’s first, with an exclusive license to sell Mercedes. After buying rich oil fields for a song in a questionable closed auction, he parlayed them into the Sibneft oil empire—which was to have merged with Khodorkovsky’s Yukos—working his way into Yeltsin’s entourage along the way. He also bought control of Russia’s flagship Aeroflot airline and put together a media industry.
In 1996, Berezovsky led a group of the country’s biggest tycoons in backing Yeltsin’s long-shot reelection campaign. Soon after, he bragged to the Financial Times that he and six other financiers—who he said controlled half the Russian economy—got the president reelected. It was those seven men the Russian media dubbed the “oligarchs.” “Now we have the right to occupy government posts and enjoy the fruits of our victory,” Berezovsky said.12
Several insiders have told the Berezovsky-Putin story, but none as well as Sergei Dorenko, a former news anchor at Channel 1, Russia’s top station when Berezovsky controlled it in the 1990s. I spoke to the handsome journalist, whose deadpan baritone is unmistakable to Russians, in Rublyovka, the suburb housing Moscow’s wealthiest. Dorenko asked that we meet at his club for SUV owners, nestled next to a helicopter dealership.
Berezovsky had hired him in 1999 to anchor a series of Sunday evening news analysis programs that would assault the opposition, which was battling for control of the Kremlin ahead of a presidential election the following year. It was then, when Yeltsin’s deeply unpopular presidency was coming to an end with no plausible successor, that Berezovsky assumed a central role in concocting the unlikely choice of the scarcely known Vladimir Putin. Having recently climbed coattails to become the head of the Federal Security Service, the FSB—formerly part of the KGB—Putin was appointed prime minister that August in a move that shocked the establishment. No one predicted he would last long—except for Berezovsky. Dorenko remembered the businessman-cum-covert-strategist as the only member of “the Family,” as the Kremlin kitchen cabinet was dubbed, who believed in victory in the election that loomed the following June. “You take care of the masses,” Dorenko said Berezovsky told him. “And I’ll take care of the elite.”
A popular former prime minister named Yevgeny Primakov and Moscow’s then-powerful Mayor Yuri Luzhkov headed the opposition to the Kremlin. As the election approached, Dorenko used his program to pour libelous vitriol on them. He told me Berezovsky was also vital to the Kremlin’s forthcoming victory because “he forced other people to believe in it. Everyone else in Yeltsin’s circle was thinking of where to flee to save themselves—but Berezovsky went around yelling, ‘We’ll defeat them all, defeat them all!’ and kept it up even after falling ill with pneumonia. While he was lying on a hospital bed with an intravenous needle in him, I kept saying, ‘Stop yelling, Borya, lie still.’ ”
When he was well enough, Berezovsky flew across the country in his private jet persuading influential governors to defect from the Luzhkov-Primakov alliance. “Explaining things like a chess master,” he almost single-handedly cobbled together a pro-Kremlin political party called Unity. On New Year’s Eve, Yeltsin dramatically resigned, appointing Putin acting president. The new heir had already captured pu
blic support by launching a popular second war in Chechnya that—after the decade of humiliating deferral to the West—fed a growing nationalism and eagerness for confrontation. With Putin’s approval ratings skyrocketing, his ascension virtually assured him victory in the election three months later.
But the alliance between Berezovsky and his new cronies in government soon began crumbling. In June, the prickly tycoon, now a member of parliament, wrote an open letter criticizing new legislation aimed at boosting Putin’s powers largely by reining in the country’s regional governors. Then he said he’d be obliged to vote against the bill, which represented a “threat to Russia’s territorial integrity and democracy.” Berezovsky’s open break with the president brought threats of prosecution for fraud in connection with his holdings in Aeroflot, among other large companies. Before the end of the year, he’d fled to London, where he remained in exile, fiercely criticizing the Kremlin and bankrolling opposition groups until his suicide in 2013.
Some of the lurid details of Berezovsky’s fall emerged in a London courtroom two years before his death, when he sued Roman Abramovich, his former protégé, for $6.8 billion, saying that Abramovich had bilked him of his share of Sibneft, ORT television (now Channel 1) and other businesses by bullying him into selling his stakes before handing the companies to the government. The case was fascinating for its details not only of how some of the oligarchs acquired their Soviet spoils, but also how Putin later snatched some of them back. Abramovich, whose fortune under Putin soared to an estimated seventeen billion dollars, claimed he owed Berezovsky nothing after having paid him billions for his political influence. He explained that the two had met on a private yacht in 1994 to agree that Berezovsky would use his Kremlin connections to persuade the government to privatize oil fields Abramovich would buy in a closed auction. In return for Berezovsky’s political protection—in Russian, krysha, literally “roof”—Abramovich said he financed the older man’s luxurious lifestyle by chartering planes, booking five-star Riviera hotels and buying resort houses costing many hundreds of millions of dollars.
Losing the case deeply humiliated Berezovsky, who was ordered to pay Abramovich more than fifty million dollars for his legal fees. His fortune now believed to be seriously depleted—he sold an Andy Warhol painting and was rumored to have borrowed five thousand dollars to pay for a plane ticket—he withdrew from public life. In April 2013, he hanged himself in a locked bathroom of a mansion outside London. In an interview with the Russian edition of Forbes magazine days earlier, he’d said he wanted nothing more than to return to Russia. “Khodorkovsky saved himself,” he reflected. “That doesn’t mean I have lost myself. But I’ve lived through a lot more of my own reevaluations and disappointments than Khodorkovsky. I lost the meaning.”13 Unloved as he was back home, his death nevertheless came as a shock, marking the end of an era as well as another gratifying victory for the president whom Berezovsky, more than anyone else, had helped create. As if to confirm that interpretation, Putin’s spokesman said Berezovsky had recently written the Russian leader to beg forgiveness for his “many mistakes.”
According to Dorenko, what had really finished the magnate in Russia were his political aspirations: winning the presidency for Putin had been only part of his ambition. Eager to become more than a backroom Kremlin power broker, the oligarch had approached the president with the idea of creating two new political parties, modeled on the American system, one of which would be headed by Berezovsky himself. “So he went to Putin,” Dorenko explained, “but he failed to understand that he was sitting opposite someone who was already president.
“ ‘Borya,’ I told him, ‘to you he’s no longer Volodya [a diminutive of the name Vladimir]. Look above his head and you’ll see the seal of an imperial eagle. From the moment he took the president’s seat, you became just one of his subjects. Not a citizen but a subject.’ ”
That observation says much more about the nature of Russian rule than about Putin himself. When the Marquis de Custine visited Russia in 1839, the French aristocrat was struck by the servility of even the highborn. Custine, who would write Empire of the Czar: A Journey through Eternal Russia shortly after returning to France, noted the Russian court’s instant switch from its ordinarily relaxed behavior to groveling whenever the emperor appeared. Without suggesting that obsequiousness was or is universal in Russia, I think bowing to the highest authority, even by the rich, was typical. That’s largely because the image of the sovereign-autocrat’s power, regardless of his real strength, is crucial for keeping the system from collapsing from infighting. Berezovsky became the exception that proved the rule—the rich will almost always stay rich only if they show fealty.
After becoming president in the all-or-nothing battle against the Kremlin’s opposition, Putin may well have felt he had to destroy all potential opponents—including Berezovsky and many others who helped install him in office—because he lacked his own power base. He built authority not by enacting a dictatorship of the law, which seemed to be an excuse for using law enforcement agencies to destroy his rivals, but by relying on the support of a traditional oligarchy empowered by the Kremlin’s coercive authority. He did it methodically. After curtailing governors’ powers, then threatening some of the country’s leading businesses with tax fraud investigations, he went on to oversee the state takeover of the pro-Luzhkov media—among Russia’s best—all the while gauging public and political reaction before taking the next step. Neither stood in his way. Clearing his path for himself, he created a far more corrupt and inequitable system than anything seen under Yeltsin.
Like most regimes not based on genuine popular support in an era of open access to information, Putin’s is inherently unstable and requires vigilant maintenance of the leader’s strong image, however antiquated that may now appear to foreigners. He regularly tells private businessmen what they should be doing with their money and assets. One of his tirades, at the height of Russia’s oil boom in 2008, helped push the entire economy off a precipice. It came during a visit to the Volga River city of Nizhny Novgorod, where he demanded to know why the CEO of a company named Mechel was absent from a meeting with metals executives. “Illness is illness,” he said after learning the billionaire was at home sick. “But I think he should get well as soon as possible. Otherwise we’ll have to send him a doctor and clean up all the problems.”
After he accused the company of price fixing and tax fraud, it lost six billion dollars overnight, depressing the entire Russian stock market by 5 percent, the start of a downward spiral soon made far worse by the global financial crisis. Those consequences were evidently far less important to Putin than demonstrating that he remained in charge.
Myths about the extent of the chaos and criminality that characterized Yeltsin’s 1990s form an important part of Putin’s image. The Kremlin’s story is that he saved Russia, or at least restored it to working order, by ending wanton crime, taming the oligarchs and putting the country’s riches back to work for the people. That he allowed them to continue to work, but for his own benefit and that of his cronies, is closer to the truth.
Former First Deputy Prime Minister Boris Nemtsov, who was among Yeltsin’s “young reformers” and once his chosen successor, knows many of the oligarchs well. Shortly after Putin became president in 2000, Nemtsov organized a meeting between him and the country’s most powerful Yeltsin-era businessmen. The purpose was to arrange a truce: if the oligarchs promised to stay out of politics, the president would call off the tax police and prosecutors who had begun investigating top companies.
Nemtsov, a tall, swarthy bachelor with a sharp tongue, appears on glossy magazine covers, sometimes bare-chested, but more often in blue blazer with an open-collar white shirt. During one of my interviews with him in his spacious, high-ceilinged apartment in one of Moscow’s seven neo-Gothic Stalin-era skyscrapers, he challenged Putin’s argument that the Yeltsin years in the 1990s were rampant with mass theft. At the same time, he acknowledged that most Russians associat
ed that grim period with democracy.
“We know what happened then. Unemployment. Other huge problems in the economy. Many people impoverished, children wandering homeless. So people still connect freedom with economic hardship.”
Indeed, the hardship was so overwhelming that privatization and other reforms were often aimed not at an equitable distribution of former Soviet property but at jump-starting an economy ruined by decades of consummate inefficiency and woeful mismanagement. With factories idle, oil wells drying up and a huge part of the national workforce unemployed—as if the country were in a fatal depression—the first priority of the young reformers under President Yeltsin was to get assets and enterprises as quickly as possible into the hands of people who might get them working, never mind how.
One of those reformers was Maxim Boycko, a chief architect of privatization. In 1992, he shared a cramped Moscow office with a thirty-two-year-old Harvard law school student who helped him act as a liaison between the government and advisers working under Harvard professor Jeffrey Sachs. Boycko, still a very youthful-looking executive of a top advertising agency when I interviewed him years later, told me the old Soviet managers didn’t want to give up control of their state-owned enterprises because they sucked out money for themselves while running their companies into the ground. Among the privatizers’ main goals was to somehow rip the companies from their control. “You shouldn’t assume ours was an orderly country with a national consensus,” Boycko said in flawless English. “Now that socialism is behind us, we can sit down quietly and start building capitalism and democracy with due order under due process. That was absolutely not true then.”
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