Berezovskiy relates that in February 1999, while Primakov was trying to open legal proceeding against the oligarch, Putin appeared uninvited at a birthday party at Berezovskiy’s house and assured him that “he [didn’t] care what Primakov thinks.”120 Putin’s public display of loyalty occurred at the same time that he was actively involved in trying to suppress the Mabetex investigations by Procurator General Skuratov. Skuratov was continuing to work with the Swiss prosecutor Carla Del Ponte on the goings-on within Pavel Borodin’s Presidential Property Management Department, where Putin had previously worked. On February 1, Skuratov maintains, he was called into the office of the head of the Presidential Administration, who was at that time General Nikolay Bordyuzha, and encouraged to drop the Mabetex investigation. When he demurred, he claims, he was shown a sex tape containing a person “resembling” him cavorting naked with two prostitutes in a small bedroom. Skuratov subsequently admitted he was “in shock. . . . The chief of staff said ‘the President no longer wants to work with you. You have to resign.’ ”121 But when Skuratov refused to go, the Kremlin showed the video to legislators in the upper house, the Federation Council, who had previously shown their support for Skuratov; once again they sided with him, expressing doubts that he was actually the person in the video.122
Skuratov intensified the pressure on Yel’tsin. He called Yel’tsin’s daughters in for questioning about Mabetex and announced that he was opening proceedings on FIMACO, the offshore company organized by the Central Bank and sponsored by the Kremlin, for channeling billions of state funds abroad. In documents obtained by Newsweek, including an internal audit of the Central Bank, just in advance of Primakov’s visit to Washington to ask for more IMF funding, it was alleged that $500 million of an $800 million installment of its first loan to Moscow in late 1993 had gone “straight to FIMACO for safekeeping,” even though it was stated that the funds were later returned and disbursed as intended by the IMF.123 There is no suggestion that Putin was involved with FIMACO, but his interest in curtailing the investigations of him by the St. Petersburg procurators and by Skuratov over his own possible involvement in Mabetex certainly coincided with the Family’s own desire to avoid prosecution. Thus there is strong evidence that Putin’s personal interests could have cemented his decision to throw his loyalties firmly behind Yel’tsin and the Family. At a minimum, the rapidity with which he moved his own people into top positions and ousted opponents in the FSB, while emerging as a strong player in favor of the oligarchs and the Kremlin against Primakov, Luzhkov, and Yakovlev, suggests he was a consummate inside player able to act decisively to protect his interests and ensure his political survival.
On March 16, 1999, when Skuratov did not budge, the incriminating sex tape was aired on RTR state television nationwide and immediately became a sensation.124 But Skuratov still didn’t give in, and on March 23 Carla Del Ponte herself flew to Moscow with new documents on the Mabetex affair. Minister of Interior Sergey Stepashin also sided with Yel’tsin and tried to squash the investigation. Del Ponte says that Stepashin asked her to hand over all the documents, but she declined.125 At this point the pressure on Skuratov intensified. In the face of widespread debate about the authenticity of the video, Putin himself led the inquest into its origins and announced unequivocally, “Today the identity of the man resembling Skuratov in the infamous video has been verified as the Procurator General.”126 The Kremlin’s demands for Skuratov to resign increased. Skuratov states that Putin became the go-between between him and Yel’tsin’s daughter Tat’yana D’yachenko: “Putin came several times to me and, opening up, said to me that the ‘Family’ was satisfied with my conduct. He said that they wanted to name me ambassador to Finland, to send me, so to speak, into honorable exile. ‘I won’t go,’ I said firmly. . . . In this situation contacts with Putin were important for me because they were also contacts with Tat’yana. . . . She herself did not enter into contact [with me] but for that purpose chose Putin.”127 Skuratov reports that Putin tried to be philosophical about the bold attempt at kompromat by the authorities, telling Skuratov, “Alas, Yuriy Il’ich, they say that there is a similar film [plyonka] about me.”128
There is little doubt that the secret services and their special talents for surveillance were involved in entrapping Skuratov. Retired KGB general Leonov is circumspect: “Virtually all state and business ‘elites’ in Russia live a lax and immoral life. Mutual peeping into bedrooms, the creation of situations to create compromising material is commonplace. Involvement of the secret services is commonplace. . . . [In the Skuratov case], evidence suggests that behind this venture were the special services. Maybe Putin’s career started here.”129
Putin’s efforts to mediate continued; evidently he was at the meeting in March with Yel’tsin and Primakov in which Skuratov finally agreed to resign.130 Soon after, on March 29, Putin was named secretary of the Kremlin’s Security Council, while maintaining his FSB post, thus ensuring that all the information reaching Yel’tsin about foreign and domestic threats would go through him.131
In the midst of the storm over the Skuratov affair, Putin was given a more pronounced role in handling the deteriorating situation in the North Caucasus, beginning with the federal response to a morning blast in the market in Vladikavkaz on March 19 that killed fifty-three people. This was the first bombing in Russia since the end of the First Chechen War in 1996.132 Putin and Stepashin, then the interior minister, rushed to the scene, and Putin headed the federal response.133 The blast derailed planned talks between the Chechen leadership and Prime Minister Primakov on regional cooperation in combating crime and kidnapping.134 Despite the fact that Primakov was reported to be strongly opposed to any increased expenditures for a new war in the Caucasus,135 Stepashin later reported that planning for a limited operation in Chechnya began in March 1999, to take the territory up to, but not beyond, the Terek River on the plains north of the capital Grozny, and that these actions were to be taken “even if there had been no explosions in Moscow.”136 Stepashin confirmed that Putin had been involved in this planning and that he himself, unlike Putin, had not been in favor of the ultimate plan to expand operations south of the Terek.
While the Russians blamed the Vladikavkaz bombings on the Chechens, this was the first of many incidents in the summer of 1999 in which investigative Russian journalists and opposition leaders blamed the Russian government for their possible culpability. Stepashin would later declare that his own opposition to an expanded operation—and his failure to prevent the rise of an alliance between Primakov and Luzhkov that produced a unified party—were the main reasons why he lost the prime ministership to Putin in May 1999.137 From March 1999 forward, Putin would be associated with the hawks’ camp in promoting a strong military response to events in the North Caucasus, while also blocking any increase in the role of the Ministry of Internal Affairs, something that might have been expected given the evident rivalry between the two men.
It was at this time, in March 1999, that rumors began to circulate about the introduction of emergency rule, possibly a last-ditch effort to stop the multiple threats to Yel’tsin’s presidency arising from the growing popularity of Primakov; the institution of impeachment proceedings against Yel’tsin by the Communists, who held 35 percent of the seats in the Duma; and the appearance of Luzhkov’s Otechestvo (Fatherland) Party. The Duma’s Impeachment Commission had announced in February that it had finished its work and was prepared to start hearings on the floor of the Duma on five charges beginning on April 15.138 Yel’tsin was in and out of the hospital during this period, and his team worked overtime to prevent the hearings from coming to a vote, which they feared they would lose. On April 12 the hearings were rescheduled for May 13, the date that would drive both the sacking of Primakov on May 12 and the preparation of contingency arrangements in case he refused to go quietly. Aleksandr Khinshteyn, a journalist known for his strong dislike of Berezovskiy, charges that Pavel Maslov, the commander of the MVD’s Internal Troops, resigned at this t
ime because he “refused to develop a plan for declaring a state of emergency in the country and wrote an extremely sharp report [Maslov otkazalsya razrabatyvat’ plan vvedeniya v stranye chrezvychaynogo polozheniya i napisal kraynye rezkiy raport].”139 On March 27, as Primakov’s enemies started to close around him, Maslov gave an interview to Krasnaya zvezda praising Primakov’s “courageous stand” on “the long-suffering Serbian lands.”140 Maslov was replaced on April 5 by Colonel General Vyacheslav Ovchinnikov, who had been the commandant of MVD forces in Grozny.
Along with Maslov, General Bordyuzha lost his position at this time. Yel’tsin sought to diminish the power of Bordyuzha, who was another supporter of Primakov. Bordyuzha taped one such conversation with Yel’tsin, and it later appeared in Primakov’s own book. In the transcript of the conversation, Yel’tsin asks Bordyuzha to step down as head of the Presidential Administration but stay on as secretary of the Security Council, which Bordyuzha declines, saying the campaign to “undermine Primakov” was “imposed on you by D’yachenko, Yumashev, Abramovich, Berezovskiy and Voloshin. . . . The country is not ruled by the president but in the name of the president by a small group of unscrupulous people. It is ruled in their interests and not those of the state.” Yel’tsin responds, “I had not expected that they had accumulated such strength.” When Bordyuzha insists that he will stay on only if D’yachenko and her circle leave the Kremlin, Yel’tsin signs the decree dismissing him that very evening.141 It was under such circumstances that Voloshin became head of the Presidential Administration and Putin found his way in as Bordyuzha’s replacement as head of the Security Council on March 29.
On May 12, the day before impeachment proceedings were due to begin in the Duma, Primakov was finally fired, and Sergey Stepashin became prime minister. With Primakov out, the political alignments in the Duma shifted; the hearings lasted only two days and resulted in Yel’tsin’s being acquitted on all five charges on May 15—although the fifth charge, unleashing the First Chechen War as a political ploy to increase his electoral chances, fell only seventeen votes short of the necessary three hundred. Yel’tsin had once again narrowly avoided impeachment, but there was no doubt that the opposition forces were immeasurably stronger as they went into the summer and fall electoral season. The draft of a presidential order (Decree 1999) released by Duma deputy Yuriy Shchekochikhin and published in July in Novaya gazeta along with his commentary revealed that had the impeachment vote passed, the Kremlin planned to introduce emergency rule, to be administered by Stepashin and General Lebed (who Berezovskiy and the oligarchs believed was sympathetic to their interests, even though he presented a gruff pro-nationalist image).142 Articles by two well-placed Western correspondents in Moscow in early June repeated these concerns: Jan Blomgren of Svenska Dagbladet reported on June 6, 1999, that a group of powerful Kremlin figures was planning bombings in Moscow that could be blamed on the Chechens.143 And Giulietto Chiesa, the highly respected Moscow correspondent of the Italian newspaper La Stampa, who was later to become a member of the European Parliament, wrote a piece in Literaturnaya gazeta in mid-June in which he analyzed the logic behind the generalized increase in tensions. He provided the following analysis of the Vladikavkaz bombings:
That criminal act was conceived and carried out not simply by a group of criminals. As a rule the question here concerns broad-scale and multiple actions, the goal of which is to sow panic and fear among citizens. . . . Actions of this type have a very powerful political and organizational base. Often, terrorist acts that stem from a “strategy of building up tension,” are the work of the secret service, both foreign but also national. . . . With a high degree of certitude, one can say that the explosions of bombs killing innocent people are always planned by people with political minds. They are not fanatics; rather they are killers pursuing political goals. One should look around [in Russia] and try to understand who is interested in destabilizing the situation in a country.144
Writing later about the purpose of these bombings and possible Kremlin culpability, Chiesa was more specific, stating that his earlier piece had been a “veiled warning” and that he had “received information concerning the preparation of a series of terrorist acts in Russia which had the goal of canceling the future elections.”145
Having been fired by Yel’tsin, Primakov was now free to pursue his political ambitions, and he decided to lead the Vsya Rossiya (All Russia) electoral faction in the Duma elections and in his own run for president. Joining him was Yuriy Luzhkov, the powerful mayor of Moscow, who had formed the political party Otechestvo (Fatherland) in December 1998 to launch his own presidential campaign. He had particular support not only among Muscovites but also among nationalists and populists who admired his stand on reincorporating Crimea. Once Primakov was no longer prime minister, his favorable rating in the country rose from 20 to 30 percent, and thus his alliance with Luzhkov, which occurred when they merged their two factions into Fatherland–All Russia (Otechestvo–Vsya Rossiya, OVR), became the single most viable threat to Yel’tsin electorally. Allied with them as one of the leaders of OVR was Vladimir Yakovlev, Sobchak’s replacement as governor of St. Petersburg. Yakovlev, whom Putin had openly called a “Judas” both during the 1996 electoral campaign and in First Person, was of particular concern to Putin because of his detailed knowledge of Putin’s activities as deputy mayor and Yakovlev’s apparent encouragement of legal proceedings against Sobchak and his deputies, including Putin.
On May 19, within days of the failed Duma vote to impeach Yel’tsin and on Stepashin’s first day in office as prime minister, Yel’tsin met with Putin not on their normal meeting day but on a day packed with working meetings to sign a decree that Putin himself had drafted and, according to his own account, already put through the Security Council. According to news reports, the decree On Additional Measures to Fight Terrorism in Russia’s North Caucasus gave the FSB increased funding and authority to assume a greater role in the “coordination of all forces and resources that are at the disposal of federal government agencies.”146 In the press report of the meeting, one journalist used an ironic touch to describe how Putin briefed Yel’tsin on two recent FSB achievements, “the Leningrad Military District military court’s conviction of six especially dangerous criminals, and the elimination of a channel through which food products were being smuggled (the affair involved corrupt customs officials). Undoubtedly, this well-timed report of successes achieved by Vladimir Putin’s agency was meant to affect the President’s mood when he signed the decree redistributing powers and resources in the North Caucasus in the FSB’s favor.”147 Putin himself concedes that he understood that the country’s stability and his own political future went through the Caucasus.148
No one among the oligarchs or in the Family, including Putin, could doubt that an OVR victory would spell, at a minimum, the end of their political careers. Stanislav Belkovskiy, the founding director of the National Strategy Institute and a political conservative, stated in an important interview in 2007 with Die Welt that it was the oligarchs Berezovskiy, Gusinskiy, Abramovich, and Khodorkovskiy who were running Russia after Yel’tsin’s 1996 election, and it was they who “made him president in order to fulfill the task of guaranteeing the results of privatization by ensuring the transformation of the privatized companies into ‘living money’ [lebendes Geld] that was legal and could be circulated openly in Russia and abroad.”149
But Putin had his own interests to promote and should not be seen as a simple puppet of oligarchic forces. In June 1999 a criminal case (No. 144128) with a fifty-two-page report was sent to the Federal Procuracy branch in St. Petersburg recommending an indictment of Putin and Kudrin on charges of abuse of office under Articles 285 and 286 of the Criminal Code. The investigation had been conducted by a twenty-man team drawn largely from outside St. Petersburg.150 It is hard to imagine that Putin was not warned of this investigation by any of his colleagues still in Petersburg, such as Dmitriy Kozak, who was deputy governor; Viktor Ivanov, who until 1999 was
the head of the St. Petersburg city government Administrative Staff, first under Mayor Sobchak and then under Governor Yakovlev; or Aleksey Anichin, who was in the northwest division of the Procurator General’s Office. Anichin had been a classmate of Putin in the law faculty of LGU151 and initially worked in the Military Procurator’s Office. He found his way to become the deputy and then chief of the Investigative Committee of the MVD’s Northwestern Region, where he was able to supervise, and reportedly then squelch, investigations into Putin’s corruption in the late 1990s and early 2000s.152, XV
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