Russians

by Gregory Feifer

  That was especially evident under the Soviet Union, when Party bureaucrats were rotated through a variety of agencies and state enterprises with little or no regard for their knowledge and expertise, if they had any. Rather, they were appointed based on their informal relationships with other officials. Similarly, Dmitri Medvedev’s four years as a president who supposedly had vast formal powers belied his real role as one of Putin’s oligarchs, and not the strongest. During his tenure, Forbes magazine was astute enough to name a mere deputy prime minister the country’s real second-most-powerful person: the Rosneft CEO Igor Sechin. He is a member of a small, shady group dominated by natives of Putin’s hometown, St. Petersburg, that controls the real levers of power—and profits from them. Although he no longer formally handles the government’s energy portfolio, Sechin continues to wield huge influence through Rosneft, whose $55 billion acquisition of BP’s Russian joint venture in 2013 made it the world’s largest publicly traded oil company, responsible for around 5 percent of global production. Sechin is also chairman of the state energy holding company, Rosneftegaz, which owns three-quarters of Rosneft and more than 10 percent of Gazprom. If there were any question about his role, his position as secretary under Putin of an energy commission conceived in 2012 effectively undermined the deputy prime minister officially in charge of energy, Medvedev’s close ally Arkady Dvorkivich.

  Among Putin’s other cronies, several newly fabulously wealthy members of a St. Petersburg lakeside dacha cooperative, which the future president joined in the 1990s, are believed to ultimately disburse some of the riches from sales of Russia’s oil and gas. They include shareholders of the deeply obscure but hugely powerful Bank Rossiya, which has been accused of using secret offshore companies to channel state loans intended for the acquisition of a jaw-dropping collection of Gazprom assets. Former bank insiders have said shady privatizations of companies such as Gazprom’s Sogaz insurance firm enabled Bank Rossiya to suck billions of dollars’ worth of value from the parent company.7 Anders Aslund, a Swedish economist who is a keen observer of the hidden aspects of Russia’s economy, says the Putin circle’s “sheer asset-stripping” includes huge capital expenditures—$52 billion in 2011—on pipelines and other projects that cost far more than they would in other countries because much of the money is skimmed off.

  Another firm, a Netherlands-based oil trading company headed by a former refinery manager named Gennady Timchenko, suddenly became the world’s third-largest oil trader thanks to contracts to export oil from Rosneft and Gazpromneft—Gazprom’s oil wing—in amounts equal to a third of Russia’s seaborne production. Now one of the world’s richest men, Timchenko was rumored to be operating on behalf of Putin, whom at least one well-connected observer has accused of amassing a secret forty-billion-dollar fortune.8 Putin, who claims an annual income of one hundred and fifty thousand dollars, has denied the accusations.

  When Timchenko lost his agreement with Rosneft in 2011, reportedly after balking at having to pay a premium, it was taken as a sign that Putin’s authority was crumbling as his cronies fought for spoils. Igor Yurgens, a wealthy businessman and leading Medvedev adviser who served as a mouthpiece for the liberal reforms he supposedly supported, used the occasion to issue his latest prediction of Putin’s demise. The new development reflected a “real crisis of management,” he said.9

  In fact, the competition has been constant. “You shouldn’t assume there isn’t jockeying behind the scenes just because Putin’s in charge,” one midlevel official told me. “That’s the nature of the system.” Despite the rumors about his decline, Forbes put Timchenko’s worth in 2013 at more than fourteen billion dollars, a staggering rise from four hundred million dollars just four years earlier. He was only one of a new group of billionaires whose obscure but clearly very close connection to Putin has enabled them to displace some of the old oligarchs at the top of the ladder. Characterizing Putin’s ruling elite as “Politburo 2.0”—after the Communist Party’s governing body—a Russian think tank identified eight political and economic bosses who run the country under the president’s arbitration, Timchenko and Sechin among them.

  As for Medvedev—another longtime associate from St. Petersburg who as president often mouthed tough Putin-style rhetoric and adopted a version of his patron’s swaggering walk—he never shook his much-ridiculed schoolboyish image. Unlike his surly mentor, President Medvedev grinned from ear to ear when he appeared next to the leaders of foreign countries, suggesting disbelief of his incredible luck. But his manner helped him succeed in his main role of deflecting domestic anger at corruption and mismanagement and misleading the West into believing he was serious about outlandish promises to end what he called Russia’s “legal nihilism” and modernize the country.

  His least believable exhortations came in a sweeping online screed that passed for a political platform in 2009. Titled “Go Russia!” it denounced the country’s “primitive economy based on raw materials and endemic corruption.” The new political system will be “extremely open, flexible and internally complex,” he wrote. Admonishing his “brilliant and heroic” fellow Russians to drop their old “paternalistic attitudes,” he issued a detailed list of actions that would make the country a “leading” one. Its experts “will improve information technology and strongly influence the development of global public data networks, using supercomputers and other necessary equipment.” Moreover, “legislators will make all decisions to ensure comprehensive support for the spirit of innovation in all spheres of public life, creating a marketplace for ideas, inventions, discoveries and new technologies.”

  Medvedev’s failure to enact a single significant initiative for achieving even one of his goals did little to quell four years of speculation about whether he was serious—a spectacular achievement. Political expert Stanislav Belkovsky, a former Kremlin insider who initiated the rumors about Putin’s personal forty-billion-dollar fortune, told me that any perceived differences between Medvedev and the Kremlin’s hard-liners were part of a deliberately constructed myth aimed at obscuring their real nature. “All those influence groups are actually business groups, and Dmitri Medvedev and Igor Sechin are part of it. They don’t differ from each other either in their philosophy, their ideology or their life purposes.”

  After he stepped down to become prime minister, Medvedev was subjected to a series of public attacks and insults, including some delivered in a state television documentary that virtually accused him of treason for delaying Russia’s attack against Georgia in 2008. While Putin rolled back one after another of his symbolic initiatives, Medvedev gamely accepted his new role as public whipping boy—yet more bread and circuses, some believed, or a strategy to pave the way for his sacking, or both.

  More than that of a pawn, however, Medvedev’s function has also been to act as a boss of the young, supposedly liberal officials who had close ties to some of the most powerful businessmen not plugged into Gazprom or otherwise directly tied to the Kremlin. The wife of Medvedev’s onetime chief economic adviser chaired the boards of two companies controlled by the billionaire oligarch Suleiman Kerimov—who is also close to the influential First Deputy Prime Minister Igor Shuvalov.10 A lawyer with a say in economic regulatory policies, Shuvalov earned tens of millions of dollars, partly through investments in Gazprom made by one of Kerimov’s companies a year before the lifting of restrictions on foreign ownership of the stock sent the share price skyrocketing by 700 percent in three years.11 Although Alexei Navalny and other opposition bloggers briefly put the Kremlin on its back foot by publicizing the news after it was exposed in the spring of 2012, Shuvalov was promoted to be Medvedev’s number two in government soon after. His wife was also the subject of media revelations—about her stakes in offshore companies in the British Virgin Islands after Putin had ordered officials to divest themselves of such foreign holdings. The interests of those supposed liberals surely lie less in reform than enabling the private business of their associates to boom, aided by massive loans from sta
te-controlled banks.

  Putin’s rise wasn’t simply the result of a fortuitous or disastrous alignment of contingencies, crucial as they were for helping enable it. The government has never successfully refuted signs of complicated political engineering, including circumstantial but convincing evidence of a pivotal plot to bomb residential buildings that killed more than three hundred people in 1999. Although the authorities blamed Chechen rebels, many Russians suspect the security services staged the explosions as part of a secret plan to bring Putin to power the following year.

  Most of the residents of an apartment block in southeast Moscow were asleep when the first blast on the ground floor tore through the front of their building one night that September. It killed ninety-four people and injured almost two hundred fifty. Five days earlier, another bomb had killed sixty-four people in the southern city of Buinaksk. In the coming weeks, two more explosions would kill more than a hundred thirty in Moscow and Volgodonsk, another southern city.

  The shock waves set off fear throughout a country gripped by a savage political struggle to succeed ailing President Yeltsin. Although no Chechen took credit for the bombings, Putin, still prime minister, used them as a pretext for launching a second war in Chechnya. Seething with expertly displayed anger, he vowed to kill Chechen militants wherever they were hiding. “If they’re in the airport, we’ll kill them there,” he said in a video clip that sealed his tough-guy image. “And excuse me, but if we find them in the toilet, we’ll exterminate them in their outhouses.”

  That was the public’s first taste of his now infamous prison-inflected slang, which won huge approval in a society humiliated by losing its first war in the tiny region on its southern border. As an incisive political analyst named Vladimir Pribylovsky told me, the bombings “changed the situation” by enabling Putin to present himself as a decisive man of action. “Two things brought about his victory: the bombings and the phrase about wiping out terrorists in the outhouse.”

  Serious questions surfaced from the start, including why bulldozers cleared most of the debris mere days after the bombings, far too soon to allow anything like proper investigations. Then a mysterious episode directed attention toward the FSB. It began late on a September night, when residents of an apartment block in the city of Ryazan, in central Russia, noticed a suspicious-looking car parked near a basement door. They informed the police, who discovered large bags of white powder connected to a detonator in the basement, its timer set to go off early the following morning.

  The police said tests showed the powder was hexogen, a World War II–era explosive that had been used in the Moscow explosions. Although the local authorities announced they’d narrowly averted another blast, just as they were about to make arrests two days later, FSB chief Nikolai Patrushev appeared on national television to report that the sacks actually contained only sugar. Patrushev said they’d been used as part of a safety drill, and the FSB quickly cleared the basement of all remaining evidence.

  When the authorities refused to investigate the bombings further, a band of liberal legislators formed their own independent committee. Twelve months later, in April 2003, its vice chairman, a prominent Kremlin critic named Sergei Yushenkov, was gunned down outside his Moscow apartment. Before his death, he told me the committee’s findings pointed toward the security services. “These special forces, which have giant opportunities and secrets, can manipulate public opinion and direct the course of events using all kinds of illegal methods at their discretion,” he said.

  Mikhail Trepashkin, a lawyer representing two sisters whose mother died in one of the Moscow explosions, began his own probe. I had a long talk with Trepashkin shortly after his release from four years in prison—punishment, he said, for investigating the crime too closely. Gregarious and disheveled, the seasoned former KGB counterterrorism investigator displayed what seemed to be a photographic memory for names, dates and times as he described a complicated network of individuals and groups connecting politicians, police, security forces and criminals.

  Trepashkin had been fired from the FSB in 1995 after helping catch high-ranking military officers in Moscow selling weapons to Chechen rebels, their ostensible enemies. (A rocket grenade fired at the US embassy during the bitter protests against NATO’s bombing of Yugoslavia in 1999 was later traced to the cache.) Three years later, he took part in a now legendary news conference alleging that rogue FSB death squads had put him and Boris Berezovsky—who was still a Kremlin power broker and Putin patron—on a hit list. Among the security service officers also participating in the briefing was Alexander Litvinenko, who would be fatally poisoned in 2006 by a radioactive substance in London, where he was living in exile. Litvinenko’s supporters say he was killed because he, like Trepashkin, had accused the FSB of criminal activities, including responsibility for the apartment bombings. Roman Shleinov, then the head of investigative reporting at Novaya Gazeta, later told me he believed Litvinenko’s killing was ideologically motivated. “He would often call us from London with tips that never led anywhere,” he told me. “He had no worthwhile information. He just represented the tragedy of an ordinary person caught between opposing groups.”

  Trepashkin said it was ironic that Putin is believed to have helped organize the news conference in 1998, when he was still an unknown presidential administration official. His goal was to assist in sidelining rivals who stood in the way of his promotion to FSB chief in July of that year. Litvinenko had recently appeared in an extraordinary videotape in which he claimed his FSB bosses ordered him to beat Trepashkin, who had sued the agency over his dismissal. “I was to plant weapons on him or even kill him because he knew something they were frightened he’d publicize,” he said. In the video, Litvinenko claimed his bosses were acting on their own, and that he was risking his life by speaking out against them. “If these people aren’t stopped now,” he warned, “this lawlessness will swallow the entire country.” Trepashkin said that after Litvinenko fled to London, he was approached with an offer to clear his own record by agreeing to spy on Litvinenko there.

  Trepashkin also echoed widespread opinion that the official confusion over the Ryazan incident was evidence that the FSB indeed organized the operation—not as a counterterrorism exercise but to blow up the building. Many also believe that Putin, who headed the FSB until August 1999, surely knew about the plot.

  Trepashkin claimed to have found ample evidence contradicting the official version of events but was prevented from presenting it in court after police stopped his car shortly before his case was to begin. “They searched it twice and found nothing,” he explained. “But as they were closing the door, they threw in a bag containing a pistol. I said it wasn’t mine, but there was nothing I could do.” Arrested on a charge of illegal possession of firearms, he says he was promised it would be dropped if he stopped investigating the apartment bombings. He was eventually sentenced to four years in prison. Tortured and held in filthy, cold Siberian cells—conditions he said seriously affected his health—Trepashkin called the judges who convicted him “bandits” for upholding clearly fabricated charges. They did so “only because, as I was told, the order came from up high.” It showed Putin’s regime “was based on a team that showed loyalty only to him, above the law.” Although six Muslims from southern Russia, none of them Chechens, were eventually sentenced in connection with the 1999 bombings, the case remains unsolved a decade and a half later.

  The details that later emerged about the apartment bombings were unknown when Putin first took power. Nevertheless, the nature of his leadership was already crystal clear to those who cared to examine the record. His first weeks and months in office were a great personal disappointment to me because his every action seemed to reverse the gains of the 1990s and encourage society’s basest inclinations toward nationalism and lawbreaking. It was also frustrating that few foreigners saw his presidency that way until many years later.

  My mother’s first conscious sense of the official deception that has playe
d a key role in Russian history came when she was thirteen years old. Arriving at school one morning, she noticed a group of boys using more than their usual amount of determination to pelt each other with crumpled pieces of paper. Unfolding one, she was taken aback to see Stalin’s portrait. It was 1956, shortly after Khrushchev delivered a momentous unpublicized “secret speech” at the Twentieth Party Congress in which he denounced Stalin as a brutal murderer and blamed his cult of personality for crippling the Soviet Union with fear. The tyrant’s portraits were soon taken down around the country, propaganda was softened and those who were bold enough went so far as to begin criticizing some aspects of their lives under communism.

  The thaw coincided with Tatyana’s growing rebelliousness. Responding to Serafima’s doting and caution by doing or trying to do whatever she was told not to, she also skipped class and sometimes paralyzed her mother with fear by disappearing from their little room for days without warning. Tatyana’s independence fed her contempt for Soviet strictures and deprivation. “She protested by the way she lived her life,” her cousin Gera Kiva recalled. When he swallowed his nervousness and decided to attend one of the international exhibitions that began appearing in late 1950s, he spotted her having her hair styled in a replica of a French hairdresser’s salon. She pretended not to see him, he said, because “she’d taken herself to the West.”