Who rules Russia? Is it the nomenklatura, a new class, the siloviki? The term “nomenklatura” with regard to Russia was first used in a book by the Soviet dissident Mikhail Voslensky in 1970; Milovan Djilas similarly referred to a “new class” in his bestselling work, The New Class, which appeared in 1957. The nomenklatura did not claim to have any political, economic, or social precision. No one would claim that all (or most) members of the nomenklatura had political power. This was the domain of the members of the Politburo and general secretary of the party and those close to him. Leaders of the party and other important figures belonged to the nomenklatura, of course. But essentially it was an inchoate group of people with certain privileges, important in a society such as the Soviet Union, but not very significant politically. There were certain status symbols such as housing, car and driver, access to certain services. And at the very top, the possession of a vertushka (a special telephone) was a sign of belonging.
There was no doubt that the composition of the elite and its structure changed over the years. For instance, the average age of political leadership was in the forties in the 1920s, in the fifties after World War II, and in the seventies in Brezhnev’s day. Membership in the political party was a precondition, of course. Leading army commanders and secret police figures were included but were kept out of political decision making, and the same was true with regard to those in command posts in economic and cultural life.
The composition of the decision-making elite underwent basic changes as the Communist Party lost its preeminent position. Under Boris Yeltsin, the very richest people moved to the fore; under Vladimir Putin, KGB and former KGB senior staff attained leading positions in the country’s leadership. This was an unprecedented process. In some regimes in history, the rich and superrich had attained positions of great political strength, and in military dictatorships colonels and generals had moved to the top. But the political police had never been in command, not in fascism and certainly not under any other political regime. Nor has it happened in other ex-Communist countries in Europe and Asia.
The rise to power of the oligarchs—and their frequent misfortunes and fall from grace—is a fascinating topic that has been (and will be) gone over in many studies. How did they amass their fortunes in such short a time? Basically through the takeover of assets belonging to the state at nominal or very reduced prices. No single answer can resolve all the questions surrounding this issue. However, in the present context our concern is with the extent of political power that has been in the hands of those who grew very rich as the result of privatization in Russia.
It all began with the decision to privatize the economy. No one knew exactly how to do this, but several astute individuals realized that state property was being sold or almost given away. Some were officials high up in government, including ministers and their deputies—Vagit Alekperov is now listed as the eighth richest person in Russia; he had been acting minister of fuel and energy. Others had no official position but close contacts with those in charge.
Of the oligarchs who made their fortunes under Yeltsin, only a few kept their status under Putin. Their ambition to play a role of political importance was a fundamental mistake and caused their downfall. It is difficult to understand how people who had grown up in the Soviet system could commit such a basic mistake. Was it unbridled ambition or the belief that with the end of communism anything had become possible? The cases of Boris Berezovsky and Mikhail Khodorkovsky, while best known, were not atypical.
Berezovsky, a talented mathematician (head of a department in the Russian Academy of Sciences), made his money first in secondhand car dealing, later became involved in the Russian media, and later still invested in a major oil company as well as Aeroflot, once the Soviet state airline. Subsequently, he went into the oil and gas business (Sibneft, now Gazprom Neft). These years of golden opportunities were quite violent. There was at least one attempt on his life by business rivals, and on another occasion, one of his deputies was assassinated. There were reports that he too had planned to do away with some business competitors.
At about the same time, his political career took off. Together with a number of other oligarchs, he financed the Yeltsin electoral campaign of 1996 for a second term as president. Owing to his close contacts with Yeltsin’s daughter Tatyana, he entered the small circle of the president’s closest advisers. Soon after Yeltsin’s election, he was appointed deputy head of the Russian Security Council. In this capacity, he was (among other things) in charge of relations with Chechnya, one of the main issues at the time.
Berezovsky’s ambitions brought him into conflict with many other oligarchs as well as politicians (such as Anatoly Chubais, who was in charge of privatization at the time). If his touch in business was more often sure than mistaken, he failed to see the dangers facing him and his group on unfamiliar ground. During Yeltsin’s last two years as president, Berezovsky’s position seemed unassailable. No important appointment to a senior government position was made without his recommendation. He and Roman Abramovich, another up-and-coming oligarch about thirty years old at the time, were the first to recommend Putin as prime minister to succeed Yevgeny Primakov, who (Berezovsky argued) was incapable of coping with the economy. Putin was resting at the time at a villa in Spain belonging to Berezovsky, and some prodding was needed. Putin knew, of course, that all prime ministers in recent years had failed. Moreover, Putin had no economic experience. Could he succeed where all others had failed? In the end, ambition prevailed and Putin accepted the job offered.
The Yeltsin era approached its end. This had been a lawless age during which the oligarchs could achieve, more or less, whatever they wanted—economically as well as politically. They could manipulate the president and had no reason to be afraid of the law. But Berezovsky should have realized that such a state of near anarchy would not last forever, for the prevailing system was incapable of coping with the constant crises facing the country. It was a situation in which the state or another strong force (perhaps the army) would eventually assert itself as a stabilizing factor. By recommending Putin, Berezovsky opted for the secret services. He and the other oligarchs had money and some influence through the media they owned, but they had neither a political party at their disposal nor another force that could translate into real power.
However, Berezovsky and most other oligarchs were not aware of their weakness. Instead of taking a backseat, keeping discreetly in the background, and perhaps withdrawing from active participation in politics altogether, Berezovsky launched a campaign against Putin after it appeared that the two did not see eye to eye on various issues. The Berezovsky media claimed that Putin had not shown true leadership in the affair of the Kursk, the Russian submarine that had sunk with 118 sailors on board. Putin had refused foreign help, which might have saved the vessel, and Berezovsky used this as a pretext to attack Putin for pushing through early antidemocratic political reforms—specifically, that governors were to be appointed in future by the Kremlin rather than elected. These criticisms were true or partly true, but they were bound to make an enemy of an erstwhile ally. Putin retaliated by nationalizing most television channels, which had been in private hands following privatization. This was tantamount to depriving Berezovsky of the only effective political weapon at his disposal. In addition, corruption charges were brought by the legal authorities against Aeroflot, in which Berezovsky was heavily involved.
This was the beginning of the end of the tycoon’s career. Berezovsky was to be interrogated by the authorities but did not appear at the Moscow hearing. Traveling abroad, he refused to return to Russia, which as he argued in a letter to The New York Times was turning into a banana republic. The break between the two men who had once been skiing partners in Switzerland was now complete. The charges against Berezovsky were probably mostly correct. It is unlikely that any great fortune could have been amassed at the time without breaking the law. At the same time, the charges were clearly politically motivated. They could have been brought with equal justice against all those who had become rich during the Yeltsin era and, of course, also against the politicians and state officials who had accepted massive bribes. Whether it was an issue of not paying taxes or raiderstvo (taking over other companies by all means fair and foul), even involvement with the mafia—had any Yeltsin oligarch been entirely free of these practices? Berezovsky had failed to understand that under Putin, the balance of power was changing. It was not exactly a restoration of the rule of law, but it certainly qualified as a new interpretation by a new ruler.
Berezovsky was compelled to sell his stake in the Sibneft oil company—not to the state, but to Roman Abramovich, another oligarch and former ally who, politically far more astute, had joined the Putin bandwagon, collaborating closely with the new masters. Abramovich had also been involved in politics in the Yeltsin era. He had been a member of the Duma and a governor (of the poor Chukchen region in the far north). But under Putin he wisely shifted his activities from politics to soccer, a game in which he had a genuine interest. He supported a leading Moscow club and thus became known as a man far more interested in soccer than in politics. A fighter by nature, he was not reckless and knew that it did not pay to be petty in one’s transactions. When he divorced his first wife, the settlement amounted to $300 million. This was a lot of money, to be sure, but no more than he had paid for one of his yachts. In this way, he kept out of trouble and on good terms with his master.
Some British lawyers benefited greatly from Berezovsky’s exile in London as well as the presence of Abramovich. Both men were involved in many legal battles concerning the ownership of companies and several libel cases. Berezovsky was sentenced in absentia in Moscow as a member of a criminal gang, but he was winning the libel actions in the British capital. He bitterly attacked Putin and financed various anti-Putin activities. But it was a losing battle. It should have been clear to him that he could not prevail in a campaign against the head of a major power. There were allegations of assassination attempts by the Kremlin, but Berezovsky escaped them. Unfortunately, Alexander Litvinenko, a close associate (and a former KGB operative), was not as lucky: He was poisoned in London in 2006.
These conflicts took their toll. Berezovsky became dispirited, lost a large part of his property, and committed suicide in March 2013. Prior to taking his life, he sent a letter to Putin (by way of his old colleague and current enemy Abramovich) asking for forgiveness for various “bad deeds” he had committed. This ending was symbolic of a historical trend that was taking place: the defeat by the siloviki of the oligarchs who had meddled in politics or, to be precise, in activities directed against Putin and his associates. The siloviki were willing to accept that the oligarchs were making large sums of money, spending lavishly, even taking much of their money out of the country. The siloviki were probably doing the same. But they were not willing to accept the political activities of the oligarchs unless they were undertaken on behalf of the siloviki, following their initiative and under their control.
The story of Mikhail Khodorkovsky need not be related in detail, since it was widely reported all over the globe following his arrest and long stay in a gulag. Born in Moscow and active in the Komsomol, the Communist youth organization, he followed in the footsteps of his parents, who were chemical engineers. He also worked for a while as a carpenter. None of the early tycoons had the benefit of a business or management education, a subject that did not exist in the Soviet Union; the first such schools did not come into being until the mid-1990s. A few studied international law and politics, but only a very few had ever been abroad. Many acquired their experience the hard way. Some of the older ones among them received their apprenticeship in the underground, illegal or semilegal “gray” economy. Most of them started at the very bottom. Mikhail Fridman, for instance, had been washing windows at the beginning of his business career. Roman Abramovich was a street trader, Vladimir Lisin, at one time the richest man in Russia, worked as a mechanic in a mine, Vagit Alekperov was employed on an oil platform in the Caspian Sea—a dangerous job if there was one. While still in his twenties, Khodorkovsky engaged in importing computers, jeans, and cognac, which brought him a small fortune. He established an early cooperative bank (Menatep), which went bankrupt. In between for a short period, he served as deputy minister of fuel and energy, which provided some useful contacts.
Khodorkovsky realized that he would need foreign capital to establish a truly major company. With the help of American investors, he acquired Yukos, at that time the biggest oil company in the country, valued at about $15 billion. The business practices used during those years, whether they involved declaring bankruptcy, attracting new investors, not paying taxes, or acquiring companies, were not only unethical but considered criminal by many. But they worked, and by the time he was arrested in 2003, Khodorkovsky had become the richest man in Russia, mainly as a result of the growth of the oil industry and its enormous profits.
Like Berezovsky, Khodorkovsky had committed the fatal mistake of getting involved far too deeply in politics, criticizing the government, and supporting the opposition. He became a major nuisance to those in power. Instead of acquiring soccer clubs or modern art or young mistresses, he argued openly with Putin on television, claiming that highly placed Kremlin officials had received many millions of dollars in bribes. In a first trial in 2003, he was accused of fraud and tax evasion; in a second trial in 2009, of money laundering and embezzlement. He spent eight years in a prison camp before he was given a pardon in 2013. Unlike Berezovsky, however, he was not broken but continued his critique of government policy while in prison and even managed to establish himself as a leading champion of democratic freedom and human rights. Given his record, this was no mean feat.
Few of the oligarchs of the Yeltsin era survived unharmed. Alexander Konanykhin, less known in the West, was only twenty years old when he established his first cooperative in building, employing six hundred workers. Soon after, he became one of the first brokers at the newly established stock exchange. It is not clear why he fell afoul of the authorities, perhaps because of his collaboration with Berezovsky. He fled to the United States, asking for political asylum because he claimed he faced assassination if he returned to his native country. His fortunes in America were mixed. In a court case he was awarded the highest sum ($33.5 million) ever given to an individual in a libel case, and in New York he was named Businessman of the Year (2004). But he also spent fifteen months in American prisons. His biography is titled Defiance: How to Succeed in Business Despite Being Hounded by the FBI, the KGB, the INS, the Department of Homeland Security, the Department of Justice, Interpol, and Mafia Hit Men.
Vladimir Potanin is an oligarch who survived unharmed. He served at one time under Yeltsin as deputy prime minister and also held other senior government positions. He is the head of a leading holding company, Interros, and his property is estimated at $12 billion to $13 billion. He kept out of politics after the Yeltsin period but served as head of countless nonpolitical government positions as well as contributing to museums inside and outside Russia and serving on their boards.
Vladimir Gusinsky, on the other hand, faced trouble early on in his career. His parents had lived in Moscow in a kommunalka, a single room that shares all facilities with several other families. He studied petroleum technology but was employed later as a theater manager outside Moscow. He made his considerable fortune as the owner of a bank and then started to buy up newspapers and television stations as well as companies engaged in movie production. His outlets criticized the government because of the war in Chechnya and other issues. He was arrested for the first time in 2000 but fled Russia, was subsequently stripped of his Russian citizenship, and acquired Spanish and Israeli nationalities. The Russian authorities tried to have him arrested and extradited through Interpol, but the European Court of Human Rights found that the Russian government’s charges against him were illegal—in breach of the conventions for the protection of human rights. Gusinsky eventually left Israel and continued his business career in the United States.
Among the very few Yeltsin-era oligarchs to survive with life and property intact was Mikhail Fridman. His father had been a leading figure (and inventor) in the field of military technology. Born in Lvov, the younger Fridman studied steel production and metallurgy and began his business career while in his mid-twenties. Together with Swiss partners, he founded a company that later became the Alfa Group, with interests in banking and other fields. His property, estimated at $20 billion in 2008, fell temporarily to $6 billion the year after as the result of the world crisis, then increased again to $16 billion in 2013, which made him the second-richest Russian citizen.
Fridman was a notable contributor to Jewish cultural causes (the Genesis Philanthropy Group) as were, to a lesser degree, Gusinsky (who supported an Israeli basketball team for a number of years), German Khan, and Pyotr Aven.
Among the oligarchs of the Yeltsin era, more than a few were of Jewish descent, but there were also Muslims, including Alisher Usmanov, the very richest. But except those mentioned, the oligarchs were not active in Jewish life; on the contrary, they distanced themselves from the Jewish community or even, like Berezovsky, were reported to have converted to the Orthodox Church. Many were only partly Jewish with either father or mother being Russian Orthodox. In their propaganda, anti-Semites tried to make heavy use of these facts but, to their surprise, with relatively little effect. They had long maintained that Jews were ruling Russia, and repeating the old allegations was therefore bound to have only a limited effect, especially at a time when most of the oligarchs were losing much of their influence and money and some had disappeared from view altogether.
The list (Forbes 2013) of the richest oligarchs of the Putin era reads quite differently from the Yeltsin list
Alisher Usmanov | 18 billion dollars |
Mikhail Fridman | 16 |
Leonid Mikhelson | 15 |
Viktor Vekselberg | 15 |
Vagit Alekperov | 14 |
Andrei Melnichenko | 14 |
Vladimir Potanin | 14 |
Vladimir Lisin | 14 |
Gennady Timchenko | 14 |
Mikhail Prokhorov | 13 |
Alexei Mordashov | 12 |
German Khan | 10 |
Roman Abramovich | 10 |
Dmitry Rybolovlev | 9 |
Iskander Makhmudov | 8 |
Oleg Deripaska | 8 |
The names in this list have been more or less the same for a decade, but the ranking tends to change from year to year and the figures given are rough estimates. At one time Lisin was heading the list; at another stage, Deripaska. As the result of the political crisis of 2014/5 the oligarchs are reported to have lost, so far at least, one quarter of their property.
It is difficult to establish where these billions are located. Of the above list, half, possibly more, are residents of other countries. For instance Usmanov, Abramovich, German Khan, and others reside in the UK, and Melnichenko lives in New York, Antibes, and Ascot. Much of the money has been taken out of Russia especially to northern (Turkish) Cyprus (which has no extradition treaty) and subsequently to London. The personal income tax rate in Russia has been very low since Stalin’s days (13 percent), but conditions in the UK are considered even more favorable. While the attitude of the Russian authorities toward big business has been favorable, there seems to be a lack of trust—the fear that the funds in Russia could be seized, the owners arrested or killed.
Mention has been made of the lesson learned by the oligarchs with regard to getting mixed up in politics. Perhaps that lesson has been learned too well. When Kommersant, a newspaper belonging to a group headed by Usmanov published an article critical of the Putin regime and threw doubts about the honesty of election results, Usmanov immediately dismissed those who had permitted such criticism of the government. At the same time, he stressed the independent character of the newspaper. Usmanov’s heroes since childhood have been the Three Musketeers, and he has been a patron of fencing as a competitive sport in Russia. But he understood only too well that even Athos, Porthos, and Aramis, had they lived in twenty-first-century Russia, would have known where to draw the line—and who could blame him? Usmanov no doubt also remembered his years in prison in his native Uzbekistan in the 1980s.
When the authorities wanted to establish another political party to prove the democratic character of the regime, they apparently had to invest considerable energy persuading one of the oligarchs, Prokhorov, to support such an endeavor. Who could blame him since such a project could easily get out of control with sham opposition turning into real opposition. Prokhorov left the party he had founded after a few months.
The older oligarchs were born in the 1950s, the younger ones in the following decade; most were in their late twenties or early thirties at the time of privatization. A few, such as Vladimir Potanin and Mikhail Fridman, came from families that had just made it into the lower ranks of the nomenklatura, but most of the others came from poor or relatively poor families. Some had already made a name for themselves in the academic world; most had studied scientific or technological subjects. About a third of the oligarchs made their fortunes in banking or holding companies, more than a third in metals and oil and gas. Not surprisingly, among the very richest were those active in the oil and gas industries. A few of the oligarchs acquired their money relatively peacefully and managed to keep out of the limelight, but most had to fight in protracted struggles replete with extortion, threats, and even murder. In the aluminum war alone about a hundred people were reported to have been killed. Roman Abramovich and Deripaska, whose close relationship with Putin has been noted, emerged victorious in this war. On this occasion, like others, the line between genuine business and the activities of the criminal underworld was difficult to draw. It is doubtful that the full story of these violent years will ever be written. If so, they could make the period of the American robber barons appear like petty quarrels in a kindergarten.
Did they enjoy their newly acquired wealth? Very few cases of retirement are known; the attraction and excitement of the world of business seem to have been overwhelming. Many established a second residence in London (which often became their first residence), some in America and Switzerland, but they continued to deal with their businesses from afar. Some acquired second and third passports—for instance, Timchenko, Putin’s main financial adviser at one time became a Finnish citizen. This did not always help; Deripaska, for instance, was refused entry to the United States because of something that had happened in his past—well before the U.S. government imposed sanctions in 2014. Vitaly Malkin, another oligarch, was not permitted to enter Canada even though he traveled with an Israeli passport; there were accusations of money laundering as well as international arms trafficking. He had also tried to persuade American senators that Magnitsky, the Moscow lawyer who died in suspicious circumstances while in prison, was really a criminal.
They became major buyers of art, both modern and classical, whereas elsewhere, as in the United States, only the second generation of nouveau riche had shown such interests. The wife of one of the oligarchs owns a well-known art gallery in Moscow. Those who benefited most from this interest in art were contemporary British painters—such as Francis Bacon and Lucian Freud. Christie’s in November 2013 sold a Bacon triptych showing his friend Lucian Freud for $142.4 million, a record price for a picture sold at auction. A few years earlier Abramovich had to pay Sotheby’s $88 million for another triptych by the same painter. Usmanov, not interested in half measures, bought the whole collection of Mstislav Rostropovich the night before it went to auction. Over the years, Viktor Vekselberg has acquired the largest Fabergé egg collection. The eggs have become very desirable, and he opened a special museum to display his collection (the collection of Alexander Ivanov in the Fabergé Museum in Baden-Baden is also very impressive).
Russian art became both desirable and highly priced—Christie’s had to pay Vekselberg $2.5 million in damages for Kustodiev’s Odalisque after it appeared that it was of doubtful origin. The greatest private collection of Russian art is in the hands of Pyotr Aven, whose “second residence” is in a village outside London—he paid about $5 million for Konchalovsky’s family portrait (1917). Konchalovsky was a fine painter, but he painted a lot, and until recently his pictures did not fetch high prices; thirty years earlier Aven could probably have bought the same picture for $20,000 or less. But thirty years earlier Aven was not yet an oligarch. The Melnichenkos are the proud owners of two of Monet’s water lily pictures. This list could be made considerably longer.
Oligarchs have engaged in ostentatious spending, a matter that became the subject of many jokes, but also of scandals and bitter criticism. It certainly helped to make them unpopular as a group. True, all were eager to engage in philanthropic causes, but what they spent on them was a fraction of the enormous sums lavished on luxuries.
The authorities did not at first intervene, but a number of circumstances eventually compelled them to take action against some excesses. For one thing, most oligarchs’ luxury spending on foreign residences, art, and yachts did not benefit the Russian economy. For another, the economic crisis of 2008 compelled many of them to retrench: Some saw themselves facing huge debts, with the result that employees of the companies owned by the oligarchs suffered even more. This led to social unrest and violence, which did worry the authorities. For this reason, the oligarchs were advised in no uncertain terms to maintain a low profile. After 2008, most took great pains not to be seen or heard except when spending money on good causes.
Government officials had also become rich—some of them immensely rich—but they had done so discreetly, such that no one knew exactly how great their fortunes were and where their money or investments had been deposited. According to Stanislav Belkovsky, a leading Russian investigative journalist, Putin, with $70 billion, could be one of the richest people on earth. (But such assertions can, of course, not be verified, at least not as long as Putin is in government.) Other journalists estimate that the wristwatches Putin has been wearing on some television appearances, Patek Philippe and others, are worth about $160 million. As the economic situation deteriorated in 2014, it became quite fashionable to attack the oligarchs and the system (“usury”) that had made it possible for them to amass their riches. But the politicians leading this campaign had also benefited from the system, had grown rich, had no wish to change it and to give away their possessions. Spokesmen for the church also participated in the campaign, but the patriarch appeared on television wearing a wristwatch about as expensive as Putin’s. These glaring contradictions between official propaganda and the actual state of affairs (the great and growing distance between the life of the rich and the rest) is a major weakness of the regime. It is bound to persist and to cause political tensions.
More billionaires reside now in Moscow than in any other city in the world. All over the globe, income inequality measured by the Gini coefficient (named after an Italian economist) and some other yardsticks has been substantially growing during the last three decades. In this respect the United States ranges at the very bottom of the developed countries. But if it is also true that the 110 richest Russians own about 35 percent of the country’s GNP (as established by the Credit Suisse research department), and if, on the other hand, 93 percent of Russian citizens own less than $10,000, then the creation of a strong middle class has not been achieved as the result of privatization. The number of Chinese billionaires is somewhat greater than Russian, but not by very much. Moreover, the Chinese GNP is four times as large (eight trillion dollars) as the Russian, which at present is about equal to that of France and smaller than the Brazilian GNP.
Such a development is undesirable from both a political and an economic point of view. Is it possible to change and reverse this state of affairs? No doubt there are various ways to do so—for instance, by an income tax reform. But this might hurt the business interests of the political leadership and lead to an increase in the flight of capital from Russia. At any rate, the issue has not been high on the list of priorities of the Russian leaders, whose main concern has been to prevent wealth from becoming a major political weapon. In this, they have largely succeeded. But if inequality goes beyond a certain limit, it is bound to cause major social tensions, and the political leadership will be compelled to act. In the struggle between the siloviki and the oligarchs, the former prevailed totally and with no great effort. The oligarchs did not constitute a united front; more often than not they were competing with one another. Alliances between them were short-lived, and they usually lacked political instinct and understanding. They had political ambitions but no power base, such as a political party or close ties with the army and the security organs.
The siloviki, on the other hand, had an old school tie in common—their work in the KGB, at home or abroad. As Nikolai Patrushev said in a speech in September 2002, he had followed Putin as head of the FSB (the successor organization of the KGB), and the secret service had become the new nobility. They did their work not for money, but from a sense of duty—that is to say, patriotism and idealism.
The proportion of erstwhile KGB agents in Putin’s inner circle has been estimated at about one-third, in the upper ranks probably higher. These are estimates, of course, because membership in “the organs” was until recently not considered a theme for public discussion. However, they had met socially as well as at work and had been indoctrinated that they were the very elite, the sword and shield of the system. The Chekists were the only honest, reliable, patriotic force, the only one that could be trusted implicitly.
They too suffered from certain handicaps. The KGB (formerly the Cheka and NKVD) had not always fared well in the past—in the purges of the 1930s they had been decimated. Two heads of the organs had even been shot. But it was solemnly declared (and often believed) that the bad old days were over and would never recur, that to serve in the organs was a great honor, a vital and patriotic duty—without the Chekists the fatherland would be in mortal danger, for it faced bitter enemies at home and abroad, scheming day and night how to hurt Russia and if possible to destroy it.
This kind of indoctrination was often effective. As a result of so many years of Stalinist rule, a mind-set of persecution had become deeply rooted in the country. Perhaps not all of it was believed, but enough to attract people to the organs both at the very top and further down in the hierarchy. The heads of the organs were mostly bureaucrats of average intelligence without much experience to deal with the world outside the Soviet Union. Yuri Andropov may have been the only exception, but he was ill when appointed and had no time to prove himself. The average operative often lacked a solid education; he was trained in a KGB academy or special courses to become reasonably competent in the language of the country to which he would be assigned. But this was often not sufficient to acquire the manners, customs, and social graces needed to move freely and inconspicuously in conditions so different from those he knew at home. Any successes experienced by the KGB were usually the result of good fortune. The reputation of the KGB was not too good in the 1970s and 1980s, and they were unable to prevent the downfall of the Soviet Union, which had allegedly been the work of its enemies abroad. For years, the KGB and its successors had invested major efforts improving and embellishing their image through novels, movies, and in other ways. The most successful by far was the Stirlitz TV series Semnadtsat mgnovenii vesny (Seventeen Moments of Spring, by Julian Semyonov, which described the life and actions of a Soviet agent who had infiltrated the Nazi security services at the very top and was therefore in a position to report even the most secret designs of the Nazis to his masters in Moscow.
This series was well produced and acted and became tremendously popular. It is regularly shown on Russian TV to this day. It became a favorite game of young boys all over the Soviet Union, who played Stirlitz. Stirlitz also made an appearance in other novels by the same writer. Semyonov, an alcoholic, died young of a stroke. He was a cynic who managed from time to time to smuggle in some doubts and even criticism of the regime in his novels. He knew that nothing even remotely like the Stirlitz saga had ever happened: It was pure fiction, exciting to watch but wholly unreal. There were other such attempts to embellish the record like the movie “A shot in the fog” but they were not nearly as successful.
Stirlitz had been the hero of anti fascism, in a “progressive, internationalist age.” In the post-Soviet period another kind of hero emerged—not invented but real. The case of Nikolai Sergeyevich Leonov seems not to have been atypical. He had been high up in the KGB hierarchy, deputy head of the First Chief Directorate. He had the rank of a Lieutenant General and was head of the analytic department of the KGB. According to his biographer, over twelve years, he was never mistaken in his prognoses and analytic reports, truly a remarkable achievement. His anti-American activities were, as the biographer puts it, motivated by deep conviction and blessed by God. To give but two examples of how his predictions showed his deep understanding of world affairs: he classified South Yemen as the “most Marxist country” in the Middle East (since Leonov was not a Marxist, it is not clear whether this was a good thing or not) and announced that in Poland the prospects of communism were not very good. Such insights seem to have impressed his superiors as well as those who worked for him, among them Putin.
In 1991, he resigned from the organs in protest against the traitorous activities of its leaders. He became a member of the Duma, belonging to a Far Right party. In the following years, he was very active on behalf of these circles, mainly as a television personality. He also taught history at Moscow University. He became a practicing member of the Orthodox Church, sharing Archimandrite Tikhon as father confessor with Putin. In an interview, Tikhon called Leonov a man of exceptional honesty: “Meeting him several years ago was a real revelation for me.”
Leonov had become a religious believer, but his new religiosity did not extend to the Jewish religion. He signed a letter to Russia’s chief prosecutor in which he asked that steps be taken against the Jews in the light of the publication of Kitzur Shulkhan Arukh, a sixteenth-century book of Jewish law first published in Venice. The fact that leading Russian politicians such as Gorbachev and Yeltsin appeared traitors in the eyes of a man of such views can easily be understood. On the other hand, he too was a defector and traitor for having joined the Communist Party and the “sword and shield” of the Communist system, he must have accepted a certain ideology. Those he had initially joined could also regard his subsequent turn to “bourgeois nationalism and reactionary clericalism” as a betrayal.
Putin did not, of course, surround himself only with former KGB agents. According to both Russian and Western estimates, only about 30 to 40 percent of those in top positions were current or former KGB agents. In Putin’s inner circle were others who had worked with him during his St. Petersburg years and elsewhere and on whom, he felt, he could rely. There were the Rotenberg brothers, for instance, who had been his sparring partners in karate, judo, and other martial arts. Almost all aspects of Putin’s life and activities have been analyzed in great detail, but it may be little known that he has gained an eighth-degree black belt in karate and is passionately involved in martial arts; the impact of the techniques and rules of such sports on Putin’s policy making have been neglected so far. Those who had achieved black-belt level also constituted a kind of brotherhood. Some oligarchs among those in the inner circle dealt with Putin’s private affairs, while others became close advisers.
Some observers of the Moscow scene believe in the existence of an unofficial Politburo and claim that it resembles the Brezhnev Politburo during the zastoi (stagnation) period. The comparison with the Brezhnev era seems far-fetched, but the existence of a group of close advisers appears beyond doubt, even if unstructured and subject to frequent changes. According to A. S. Chelnokov (Putinski Zastoi: Novoe Politburo Kremla), it consisted in 2013 of the following:
Sergei Ivanov, a former KGB general, in charge of general administration. Putin knew him from his St. Petersburg days, when both worked for Anatoly Sobchak, the mayor.
Igor Sechin, formerly deputy prime minister, at present head of Rosneft.
Sergey Chemezov, of whom little is known except among the insiders. He is the head of a corporation named Gostechnologia, and his experience has been in the industrial field.
Gennady Timchenko, who is the money administrator (or consultant) of the group. Over the last twenty years, he has spent more time abroad than in Russia.
Yury Kovalchuk, co-owner of Rossiya, a Russian bank. He has a doctorate in physics, but his more recent experience has been in the fields of media and banking.
Sergey Sobyanin, the mayor of Moscow who succeeded Yuri Luzhkov (who after many years in his job was removed because he became too involved in conflicts of interest with Putin and the administration). He is also the head of a group of governors and other high officials representing the Urals and Siberia.
Vyacheslav Volodin, who hails from Saratov and has been subject to various accusations during his political career but always managed successfully to extract himself.
Dmitry Medvedev, a faithful stand-in for Putin. Whenever Putin served as prime minister, Medvedev was president, and vice versa. It is unknown how much real power he wields.
Next, the Politburo “candidates”—not yet full members, but very likely to be promoted. Leading the list are the following:
Sergey Shoygu, at present minister of defense. Originally from Tuva, the small Asian autochthonous republic that became part of the Soviet Union, he hails from a local nomenklatura family; his father was deputy prime minister. He is an excellent communicator, according to the polls the most popular Russian politician next to Putin.
Igor Shuvalov, who has served in a variety of senior government positions and been one of Putin’s economic advisers.
Alexei Kudrin, a former finance minister, who has known Putin from the time both were serving in St. Petersburg.
Arkady Rotenberg, Putin’s martial arts partner. He has a karate black belt and with a little help made his fortune in the oil and gas industry.
Alisher Usmanov, whose background is in metallurgy, especially the steel industry.
Roman Abramovich, who needs no further introduction.
This “Politburo,” if indeed it exists, is a wholly unofficial body. Its members have never boasted of “belonging”; on the contrary, with the exception of Abramovich, they have tried to keep out of the limelight as much as possible. Some were promoted and others demoted, as is inevitable in such inner circles. But those who had belonged to the group were well taken care of and seldom dropped altogether.
It is fascinating to follow the process of the rehabilitation of the Cheka and the KGB. Glasnost, as the defenders of Russia saw it, had caused the demonization of those who had served as “the sword and the shield” of communism and the Soviet system. They were made responsible for the purges—the millions who had been sent to the gulag, the hundreds of thousands who had been murdered. But this was unjust because some twenty thousand Chekists had also been among the victims. This is historically true; the purges and the mass murder of the 1930s were Stalin’s idea, not initiated by the NKVD. But the killing was still carried out by the organs, and Stalin too has by now been partly rehabilitated. As Putin has put it on various occasions, Stalin was a controversial figure. Some of Putin’s underlings have cast Stalin in an even more positive light.
However, this demonization did not last long. The rehabilitation began under Yeltsin with a 1997 speech in which a “day of the Chekist” was announced, to be celebrated each year on December 20. Awards were to be given to books and movies restoring the good name of the Cheka/NKVD/KGB. Under Putin, these sporadic measures became a cult of state security. Those serving were called “the new nobility”; incorruptible, they were motivated not by material gain, but by idealism.
Some of those engaged in rehabilitation went even further and made those in the organs appear as modern-day saints. The Orthodox Church took a leading part in this campaign by sponsoring “spiritual defense” as one of its main endeavors. A new head of the KGB/FSB was given one of the highest orders of the Orthodox Church named after Dmitry Donskoy, who being a national hero had also more recently been made a saint. Whereas Dmitry was a historical figure who fought the Mongols and Tatars, the victor in the famous Battle of Kulikovo, Ilya Muromets, who has become something like a patron saint of the Russian organs, belongs to the realm of legends and folk culture. He is a great hero (bogatyr) involved in countless battles and he too has become a saint.
This collaboration between church and state in police work and espionage based on an elaborate ideological justification went much further than in czarist days. At that time the Okhrana was considered a necessary, even vital, part of the protection of the regime, but it did its work in the shade. There was no glorification of its agents. It was thought self evident: No justification was deemed necessary, and no publicity was sought.
Questions concerning the identity of those ruling Russia are bound to remain open for the time being. Putinism is an authoritarian regime, representing the interests of several groups in Russian society. The often-invoked “vertical power” structure simply means that orders are passed on from top to bottom, an obvious statement if there ever was one.
The identity of the supreme leader may be accidental. If Putin had not been appointed by Yeltsin, there would have been someone with a roughly similar background. His powers are not unlimited. There is again the cult of the leader and an obvious retreat from glasnost and democratic aims. “Sovereign democracy” is a synonym for such a retreat—not total, but substantial and significant. It means that the country is not ready for a Western-style democracy, perhaps never will be. In any case, it is not a political system wanted by most Russians, since it is not in the Russian tradition and in consonance with Russian values.
A little more than a century ago, Robert Michels, a German student of politics and sociology, published his thoughts about the “iron law of oligarchy.” His ideas were interesting, but his political instincts (like those of some of his contemporaries who expressed similar views—Pareto and Mosca) were less than astute; all three sympathized with Mussolini. Michels, who had been initially a supporter of socialism, was concerned that even in democratic institutions (particularly in such institutions—trade unions for instance) an elite/oligarchy would eventually emerge and take charge.
Michels was referring not to billionaires, but to political leadership. Since then, various theories about the origin and function of elites have seen light, but none is applicable to Russia—the former Soviet Union. This is because the Russian situation is unprecedented and sui generis. Given Russia’s history and traditions, it is unlikely that in the post-Yeltsin era a strong democratic movement would have emerged even if Putin had not been the choice of leader. But accident always plays a role, and Russia is not the only country to emerge from communism. Some have moved toward democracy; others (after promising beginnings) have moved away from it. It is banal to note that the situation in all these countries is very much in flux. But it is the only statement that can be made with any degree of conviction.
Much effort has been invested in attempts to define Putinism, and for good reasons. For if the leader who gave the system its name should resign or be forced to retire, it is likely that the new form of government will survive him, because it seems to conform with Russia’s present needs and desires. It is a dictatorship approved by the majority, as long as the going is good. If this support should shrink, harsher methods of rule are likely to be introduced. In its present form, Putinism resembles more the kind of dictatorship that was (or is) in power in less developed countries—mainly in the Middle East and Latin America.
Putin’s success rested (rests) mainly on two factors, above all the steeply rising demand for oil and gas and, correspondingly, a striking improvement in Russia’s finances. This caused the emergence of a small group of megarich billionaires, the oligarchs. Inevitably, however, there has been a massive trickle down that has brought about a substantial rise in the standard of living of wide sections of society. These became the pillars of the support for Putin and his regime.
The other source of the success of Putinism was the unfortunate character of the transition from communism to some new form of rule based on a market economy. What should have been reforms leading to a democratic society became identified instead with chaotic political conditions and a kleptocracy. Putinism more or less successfully dealt with the former, strengthening the authority and power of the state. The new wealth enabled the Russian government to follow a patriotc (aggressive) foreign policy aimed at the retrieval of various parts of the Soviet Union that had been lost as the result of the collapse of 1989–91. At the same time, Putinism accepted the negative social and economic heritage of the Yeltsin era.
It had become customary to regard Russia after the breakdown as “Upper Volta equipped with nuclear weapons.” But such comparisons were less than accurate, since Upper Volta had never considered itself a third Rome with messianic assignments to carry out, there has not been an “Upper Volta idea” comparable to the Russian idea, nor did it enjoy (as Russia did under Putin) the good fortune of the windfall of the oil and gas boom, which enabled it to play an important role in world affairs. These various circumstances make the Russian case sui generis. Comparisons with historical fascism may be correct and helpful in some respects, but not in others, and they cannot be indicative as far as coming events are concerned.