STEVE JOBS PRESENTED HIM WITH AN iPhone 4 an hour before it hit the shelves. The founders of Twitter taught him how to send his first tweet. The head of Cisco showed him the latest in video conferencing and promised to invest a billion dollars in developing innovation and entrepreneurship in Russia. When President Medvedev set off on a tour of Silicon Valley in June 2010, technology chiefs rolled out the red carpet. Dressed in jeans and an open-collared shirt, he gave a speech at Stanford University while reading the text from an Apple iPad. ‘I wanted to see with my own eyes the origin of success,’ Medvedev told his audience. ‘I’m inspired with what I saw here in Silicon Valley and at Stanford. In a very good way, I am kind of jealous of all you here.’
Medvedev was only the second serving Kremlin leader to have visited California. When Khrushchev had done so half a century earlier during his trip around the United States, he had taken in the IBM plant in San Jose – though he was not much interested in the computers and far more intrigued by the self-service canteen, an innovation that he vowed to introduce on his return to the Soviet Union.1* Like his predecessor, Medvedev was impressed by what he witnessed. ‘My purpose is not just to see what is going on there. It is not a guided tour,’ he declared at a reception hosted by the film star and California Governor Arnold Schwarzenegger. ‘I would like to have my visit translated into full-fledged relations and into cooperation with those companies.’ As he prepared to leave, Medvedev turned to Schwarzenegger and declared, in a line from Terminator 2: Judgment Day, ‘I’ll be back. Hasta la vista, baby.’ One tech star whom Medvedev did not meet during his visit was Russian-born Sergey Brin, a co-founder of Google, who in an interview a few years earlier had scathingly described the corrupt land of his birth as ‘Nigeria with snow’ and asked why a ‘bunch of criminal cowboys’ should control the world’s energy supply.
Since coming to power, Medvedev had expressed his determination to carry out a wide-ranging reform of the Russian economy, which had become all the more vital due to the economic crisis that followed the collapse of Lehman Brothers in September 2008. The oil price, which hit a record $145 per barrel in July 2008, had slumped to $30 just before Christmas and was only back up to $78 by the time of Medvedev’s visit. For the first decade of the millennium, Russia’s GDP had grown an average of 7% a year, one of the fastest rates in the world. In the first quarter of 2009, it plunged by 9.5%.
The Russian government’s immediate problem was to stave off economic collapse. It did so by dipping into the stabilisation fund that had grown steadily since it was set up in 2004. The fund was a tribute to the sound management of public finances practised by Putin’s governments. They had been less good, however, at restructuring the Russian economy away from its overwhelming dependence on oil and other raw materials and encouraging the production of goods and services that could compete with their Western equivalents.
Developing tech industries seemed to offer a solution. One of the aims of the US–Russia Bilateral Presidential Commission, set up during Obama’s visit to Moscow in July 2009, was to identify areas where the two countries could cooperate and pursue joint projects. Technology transfer was an important part of this and the commission played a key role in everything from intellectual property sharing and exporting to facilitating American investment in Russia and vice versa.
In November 2009, Medvedev announced plans for the Skolkovo Innovation Center, a complex on a greenfield site south-west of Moscow purpose-built for science and technology companies. Historically, Russia – and the Soviet Union before it – had achieved considerable success in science and technology but had struggled to market its inventions. The aim of the new complex was not just to develop technology start-ups, but, as in Silicon Valley, to bring them to people who could finance and market them. It was nicknamed Silicon Steppe.
Medvedev had mentioned his plans for the complex to Hillary Clinton when they met in Moscow the previous month and she ‘suggested that he visit the original in California’. In May 2010, before Medvedev’s trip to America, the state department facilitated a trip to Moscow by twenty-two of the biggest names in US venture capital; weeks later the first memorandums of understanding were signed by Skolkovo and American companies.
The US government saw advantages in the partnership, which aimed to match Russia’s brainpower in science, engineering, mathematics and computers with US investment and entrepreneurial know-how. The state department also helped Rusnano, the Russian state investment fund, identify American tech companies worthy of Russian investment. Yet there was also a darker side to Skolkovo. Research into the centre by the US Army Foreign Military Studies Program published in 2013 alleged its purpose was to serve as a ‘vehicle for world-wide technology transfer to Russia in the areas of information technology, biomedicine, energy, satellite and space technology, and nuclear technology’. In December 2011, it claimed, Skolkovo had approved its first weapons-related project: the development of a hypersonic cruise missile engine. Surveillance equipment and vehicles capable of delivering airborne Russian troops were also developed there. ‘Skolkovo is arguably an overt alternative to clandestine industrial espionage – with the additional distinction that it can achieve such a transfer on a much larger scale and more efficiently,’ it said.2
This should not have come as a surprise: despite the apparent similarities between them, Skolkovo was very different from Silicon Valley. Rather than evolving from the bottom up, it was the creation of the Russian government, which committed $5 billion over three years to provide housing for thirty thousand people, as well as schools, shops and parks. Many of its research projects incorporated ‘dual-use’ civilian and military applications. It was also claimed that the FSB ran some of its information warfare operations from there.
These allegations would later be brought together in a report published in July 2016 at the height of the US election campaign by the Government Accountability Institute, whose head, Peter Schweizer, is a long-standing critic of Hillary Clinton. The report also revealed another curious twist: Russian government officials and American corporations that took part in the technology transfer linked to Skolkovo between them funnelled tens of millions of dollars to the Clinton Foundation. ‘Even if it could be proven that these tens of millions of dollars in Clinton Foundation donations by Skolkovo’s key partners played no role in the Clinton state department’s missing or ignoring obvious red flags about the Russian enterprise, the perception would still be problematic,’ Schweizer wrote.3
SUCH CRITICISM LAY IN THE FUTURE as Medvedev met the movers and shakers of Silicon Valley. With his boyish looks and informal manner, the Russian president appeared at ease here in a way that Putin or Yeltsin before him would never have been. Medvedev reinforced the impression of being a new style of Russian leader when he travelled on to a summit with Obama – the pair’s seventh meeting – in Washington.
US administration officials spoke of a new phase in the ‘reset’. After spending the previous few months focused largely on security issues, both sides wanted to move on to economic issues, of which cooperation on technology was a part. ‘Twenty years after the end of the Cold War, the US–Russian relationship has to be about more than just security and arms control,’ declared Obama. ‘It has to be about our shared prosperity and what we can build together.’ Medvedev was pushing for progress on Russia’s long-running demand to be admitted to the World Trade Organization, which it saw as the key to attracting foreign investment. ‘We are tired of sitting in the waiting room, trying to enter this organisation,’ he told a press conference. Obama wanted him first to agree to lift a ban Russia had imposed on imports of American chickens that was hitting his country’s poultry industry, hardly an onerous condition compared to past negotiations between the countries.
The personal chemistry between the two men was on display when Obama took his guest out for a meal at Ray’s Hell Burger in Arlington, Virginia in one of those staged events without which no summit is complete. Striving for informality, Obama urged Medvedev to take off his jacket after they emerged from the car in the 37°C (100°F) heat. ‘Is it safe?’ Medvedev could be heard asking before popping his jacket onto the back seat of the limousine. ‘It’s safe,’ assured Obama. ‘No one’s going to steal it.’
And so, as the cameras whirred, they strode into the burger bar in white shirts and ties, like a couple of office workers out on their lunch break, posing for photographs with a group of surprised American soldiers before making their way to the counter where Obama did the honours: a cheeseburger with sautéed onions, jalapeño peppers and mushrooms for Medvedev, and one with sautéed onions, lettuce and tomato for himself. They shared a large fries. ‘We’re gonna turn him on to a real American burger,’ Obama said.
As Medvedev made a token effort to go for his wallet, Obama insisted on paying the $24.50 himself. ‘This one’s on me. Big spender. I want to show off,’ he joked. At a joint press conference later, Medvedev thanked Obama for lunch, joking: ‘It’s not quite healthy but it’s very tasty and you can feel the spirit of America.’
DESPITE OBAMA’S DETERMINATION TO RESET RELATIONS with Russia, a reminder of the Cold War threatened to overshadow the summit. On the eve of Medvedev’s visit, the FBI had uncovered a Russian spy ring of ten sleeper agents it claimed had been planted in the country years earlier. Among them was Anna Chapman, a glamorous young woman working in real estate in Manhattan. The agents, who lived seemingly normal lives in New York, New Jersey and Boston, had been sent to ‘search and develop ties in policymaking circles in US and send intels to C [for centre, meaning Moscow]’, according to a document purporting to be their mission statement, later released by the FBI.
The ten had been under surveillance for some time, but the FBI decided to pounce after receiving information that some of them were planning to leave America. Five days before Medvedev was due to arrive on his visit, Obama convened a meeting of the National Security Council. No one wanted the latest stage in the reset to be overshadowed by an old-style spy scandal and so the FBI was ordered to hold off. ‘The president wanted to handle this in a way that was professional and did not feel like it was the Cold War,’ said McFaul.4 Two days after Medvedev had gone, Chapman met a man in a New York coffee shop she thought was a fellow Russian agent. He was really an undercover FBI man. Arrested along with the others on 27 June, she pleaded guilty to a charge of conspiracy to act as an agent of a foreign government.
The sleepers did not appear to have acquired any secrets and were not even charged with espionage. Their thin pickings were not surprising given that they were living apparently normal lives, with no access to important people or sensitive information. The American press treated the incident as little more than a joke, mocking their use of false names and invisible ink and suggested they could have learnt more by surfing the internet.
They were sent home less than two weeks after their arrest in exchange for four men who had been caught by Russia and accused of passing information to MI6 and the FBI. Chapman went on to acquire a curious celebrity, posing in lingerie as the cover girl for the Russian edition of the magazine Maxim, making a surprise appearance at the launch of a Soyuz rocket heading for the International Space Station and hosting her own television show. (She later reappeared at Skolkovo, claiming to be starting a new career in venture capitalism.)
The Russian foreign ministry initially dismissed the American accusations as baseless and tried to downplay the incident. Putin revelled in it, however, claiming to have got together with Chapman and the others after their return and sung ‘patriotic’ songs with them – including one from The Shield and the Sword, the 1968 Soviet-era spy film that had prompted his own KGB career. He also railed against their betrayal, apparently by a double agent. ‘It was the result of treason,’ Putin said, predicting a grim future for those who blew their cover. ‘It always ends badly for traitors: as a rule, their end comes from drink or drugs, lying in the gutter. And for what?’5
THE INCIDENT PASSED WITHOUT MANY REPERCUSSIONS. Obama had become comfortable dealing with Medvedev and was proud of the extent to which he had succeeded in his ‘reset’ of relations with the Kremlin. The strength of the two men’s relationship – and also its limits – were to be highlighted by a political tsunami that was about to engulf the world. When Mohamed Bouazizi, a Tunisian street vendor, set himself on fire on 17 December 2010, it triggered a chain of events that toppled the leaders of some countries and plunged others into brutal civil war in a violent echo of the Colour Revolutions. The Tunisian President Zine El Abidine Ben Ali, who had ruled his country for a quarter of a century, was the first to go, stepping down within a month after a series of street protests. Then, on 11 February, his Egyptian counterpart, Hosni Mubarak, a long-time US ally, resigned after Washington made it clear it would not back him if he used force to quell growing popular unrest.
A crisis was also brewing in Libya, where an uprising against Muammar Gaddafi’s rule began a few days later in the eastern city of Benghazi. Gaddafi, however, was not prepared simply to back down, and Libya was soon on the path to a bloody civil war that would split it down geographic and tribal lines. As Gaddafi’s forces bore down on Benghazi, pressure grew from France and Britain for the imposition of a no-fly zone on the country. Their call was soon joined by the Arab League. America was initially reluctant to be involved, but Hillary Clinton became persuaded of the need to act and she convinced Obama. He wanted something more than just a no-fly zone, though: under the plan he approved, US missiles would first take out Libya’s air defence systems and then NATO warplanes would attack Gaddafi’s forces. Obama nevertheless insisted that US intervention should be limited in time and not involve ground troops. He did not want a repeat of Iraq.
Such action still required a UN mandate, which raised the potential problem of a Russian veto. Since NATO’s bombing of Yugoslavia in 1999, the Kremlin had opposed such interventions, especially when they were directed against regimes such as Libya’s with which it had extensive commercial ties. But in answer to a question at that February’s session of the World Economic Forum in Davos, Medvedev appeared to hint at a new line by expressing sympathy for the demands of the Arab Spring protesters. Biden took advantage of a visit to Moscow a few weeks later to lobby the Russian president to support action against Gaddafi. Medvedev’s stance put him at odds with both the foreign ministry and security apparatus, which were wary of what they saw as an attempt by America to impose its writ on yet another part of the world.
On 17 March, the Security Council authorised its member nations to take ‘all necessary measures’ to protect civilians in Libya, which was interpreted as allowing for a wide range of actions including strikes on air defence systems and missile attacks from ships. Ten countries backed the measure; Russia and China abstained. Two days later, military operations began, with a French plane firing the first shots. Medvedev, it was claimed, had contemplated going further and voting in favour of the motion before being persuaded otherwise by his officials. Putin, however, was appalled even by the abstention. In a speech the following week at a missile factory, he likened the assault on Libya to a medieval crusade and compared it with Bush’s invasion of Iraq. ‘This is becoming a persistent tendency in US policy,’ Putin said. ‘During the Clinton era they bombed Belgrade. Bush sent forces into Afghanistan, then under an invented, false pretext they sent forces into Iraq . . . Now it is Libya’s turn . . . Where is the logic and the conscience?’
Medvedev was livid: foreign policy was meant to be his domain as president. A few hours later he summoned journalists to an outdoor press conference at his dacha where, dressed in a leather bomber jacket, he defended the Security Council’s action. ‘These are balanced decisions that were very carefully thought through,’ he said. ‘It would be wrong for us to start flapping about now and say that we didn’t know what we were doing.’6 Medvedev went further that May during the G8 meeting in the French resort of Deauville, where he said the world no longer saw Gaddafi as Libyan leader and suggested a discussion about which country should take him in.7 Medvedev’s stance was significant not just for what it meant for Libya but also for its implications for the relationship between him and Putin. Would the ‘tandem’ continue to roll on or would Medvedev be pushed aside to allow Putin to return to his old job at the next election?
Libya was not the only issue on which Medvedev had been asserting himself. In December 2010, Putin used his annual press conference to comment on the second trial of Mikhail Khodorkovsky, the oligarch who had fallen foul of him years before, by declaring ‘a thief belongs in jail’, and Medvedev appeared to slap him down, saying no official should comment on a trial before the verdict. His intervention did not do the former Yukos chief much good, however: the judgement, read a few days later, effectively added another seven years to his jail sentence.
Medvedev appeared to get his way the following March, though, when he issued a decree requiring cabinet ministers, many of whom were Putin allies, to give up their seats at state companies. Those affected included Igor Sechin, the deputy prime minister – one of Putin’s closest associates and a rival of Medvedev – who dutifully gave up his position as chairman of the board of Rosneft, the oil company. That May, Medvedev even appeared to take a dig at Putin, declaring: ‘A person who thinks he can stay in power indefinitely is a danger to society. Russian history shows that monopolising power leads to stagnation or civil war.’
For his part, Putin launched an organisation called the All-Russia People’s Front, which was intended to be a coalition between the ruling United Russia Party and other people and groups willing to rally round him. As Dmitry Peskov, Putin’s spokesman, put it: ‘It is a supra-party that is not based on the party. Rather, it is focused on Putin, the creator of this idea.’ Medvedev, by contrast, had no role in it.8 Putin was also honing his image with a series of Action Man stunts: the world had already been treated to the sight of him riding a horse bare-chested in southern Siberia in summer 2009. More recently, he had been photographed driving a snowmobile in Krasnaya Polyana, Sochi, fitting a tracking collar to a polar bear in the Arctic and firing darts at an endangered grey whale in the Sea of Japan. (The coming August would see the most bizarre stunt yet: Putin, clad in a rubber suit, emerging from the Black Sea clutching two ancient Greek urns that he had ‘discovered’ in the shallows; even the Kremlin had to admit that it was rigged.)
Yet if there really was a power struggle between Putin and Medvedev, it had been a very brief and unequal one: in a report in the Sunday Times on 22 May, Mark Franchetti, the paper’s veteran Moscow correspondent, claimed that Putin had decided he was going to run again for the presidency – which meant Medvedev had to step out of his way. ‘There’s rivalry with Putin but they’re both too smart to get drawn into a nasty personal conflict,’ a source told Franchetti.9 ‘The difference is simple: Putin can ask Medvedev to step aside. No matter how reluctantly, he’ll oblige. But Medvedev can’t stop Putin coming back. And Putin wants to be president again.’
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* In his book, Khrushchev’s son, Sergei, describes his father enthusiastically pushing his tray along the counter, followed by Andrei Gromyko, the foreign minister, and other members of the delegation. All coped well apart from Viacheslav Yelutin, the minister for further education, who dropped his tray through an unexpected opening in the counter, spilling cabbage on his trousers – much to the amusement of Khrushchev, who joked that he would have to train since his arms were not used to work.