Instead of falling to what they believed was a coup by forces from the Communist past, what the Yeltsin Family had in fact succumbed to was a creeping coup by the security men. Under siege from all sides, they’d had little choice but to reach an accommodation with the KGB.
‘They had to find a compromise figure,’ said one former senior KGB officer close to Putin.[1] ‘There was a huge army of former and current law-enforcement officers who were all still in position. They needed a person who could smooth relations with this force after Yeltsin’s departure. Their regime was under attack from all sides. They didn’t have any choice. It was a forced decision based on the fact that they very much feared that the departure of Yeltsin from power could lead to a real counter-revolution and the loss of everything they’d achieved with such effort. It was a question of security and agreements. They thought Putin was a temporary figure they could control. The only person who was strongly against it was Chubais. He feared that Putin’s background – his service in the KGB – would mean that he would not be a manageable puppet in the hands of the Family. His intuition did not let him down.’
For a long time, Putin has been portrayed as Russia’s ‘accidental president’. But neither his rise through the Kremlin nor his vault to the presidency seem to have had much to do with chance. ‘When he was moved to Moscow they were already beginning to check his suitability,’ said the close Putin ally from the KGB.[2] If, to the outside world, Russia under Yeltsin was a country of epochal change where the power of the security services had long been smashed, then inside Russia, beneath the surface, the security men were still a force to be reckoned with. Inside Yeltsin’s Kremlin, and in second-tier posts across the country’s institutions and companies, were representatives of the KGB, some of whom ten years before had backed efforts to bring the market to Russia, understanding all too well that the Soviet Union could not compete with the West under the planned economy. They had watched from the shadows as the reforms they began spiralled out of their control under Yeltsin’s rule. They’d been left largely on the sidelines as the freedoms of the Yeltsin era led to the ever faster rise of the oligarchs, who by the mid-nineties had outpaced their former KGB masters. The freedoms had created a robber-style capitalism under which, in the end, the security men had been able to compromise Yeltsin and his family. With the market crash, their moment had come. Yeltsin and his family were vulnerable over the Mabetex accounts and their close business ties to Berezovsky, while the men behind the scenes in the Kremlin had long been planning a statist revanche.
‘The institutions the security men worked in did not break down,’ said Thomas Graham, the former senior director for Russia on the US National Security Council. ‘The personal networks did not disappear. What they needed simply was an individual who could bring these networks back together. That was the future. If it hadn’t been Putin, it would have been someone else like him.’[3]
The broader caste of security men behind the scenes in the Kremlin were seeking only to secure the property and economic gains that had been made in the move to the market. Inside the Kremlin, the prevailing conviction was that after the chaos of the Yeltsin years the new president, whoever he might be, had to represent a statist revanche, a revanche of the losers from the Yeltsin years – when state workers – teachers, doctors and law enforcement – had suffered most. ‘We were looking for the glue for the pro-Kremlin coalition,’ said Gleb Pavlovsky, the Kremlin adviser and spin doctor at the time.[4] ‘A different style politician had to come to power, and complete the post-Soviet transition.’
‘It was the KGB in any case that was going to take over the regime,’ said Andrei Illarionov, the former presidential economic adviser.[5]
If Primakov, as Plan A, represented the threat of a Communist-style revanche and the very real risk that a combined Primakov–Luzhkov ticket could result in Yeltsin and his Family spending the rest of their years behind bars, then Putin was the silovik who was meant to save them, the charmer who’d spent his time assuring the Family he was progressive, that he was one of them. ‘Putin is an outstanding politician, and he carried out a very successful operation to win the trust of the Family,’ said Illarionov. ‘Primakov was seen as the main enemy for Yeltsin. The security men accurately calculated that Yeltsin would not hand over power just like that.’[6]
But in their rush to secure their position, the Yeltsin Family were handing over the reins to a faction of younger KGB men who were to prove far more ruthless in their bid to gain power than any among Primakov’s elder, more statesmanlike generation might have been. In the hurly burly of Kremlin intrigue and warring clans – even within the security services – they were handing over power to a clan of security men who’d forged their alliances in the violent battles of St Petersburg, who were far hungrier for power and who would stop at nothing to demonstrate their loyalty.
The Kremlin spin doctors worked incessantly to portray Putin as acting decisively against the Chechen incursions into Dagestan. But in the first month of his premiership, Putin’s approval rating barely grew. He was still frequently described as colourless. He remained a grey and obscure bureaucrat, while Primakov’s newly announced alliance with Luzhkov was gathering in force – one by one, Russia’s powerful regional governors were lining up to join it. All the while, the news about overseas investigations was setting alarm bells ringing. The revelations about the Bank of New York probe, and its potential to lead to the Yeltsin Family, were like a ticking time bomb, and the breaking news about the link between the Mabetex investigation and the Yeltsin Family credit cards intensified the pressure further still. Somewhere, locked in a safe inside the deputy prosecutor’s office in the stately mansion on Petrovka Street, arrest warrants were lying, signed.
There was still one more crucial metamorphosis to come.
It was at this time, Pugachev told me, that he’d proposed the most audacious step yet. He began trying to convince Tatyana and Yumashev that Yeltsin should step down early, so Putin could succeed him before the next election. It was the only way to secure his vault to the presidency. ‘We’re not going to be able to hold on to power till the presidential elections the following summer,’ he told them. ‘The fact that Yeltsin said he wants him to be his successor is not going to help. We still have to get him there.’ The discussions went on for hours. Yumashev, for one, was convinced that Yeltsin would not agree. ‘I told him, this is a question of your personal safety, of the safety of his family, and for you and for all of us. It’s a question of the future of the country. But he said, “You understand he’ll never give up power.”’
In the end, according to Pugachev, Yumashev said he would go to Yeltsin. They parted late in the evening, and the next day, when Pugachev was back in the Kremlin, he said he received a call from Yumashev: ‘He told me the question has been decided.’[7] Yumashev, however, insisted that no such decision was made then. The official Kremlin line has always been that Yeltsin only decided to step down early much later, towards the end of the year.
But two other former Kremlin officials also indicated that the decision had been made earlier than that,[8] and one of Putin’s close KGB allies noticed that something serious was afoot. Towards the end of August Putin had retreated with one of his closest comrades to his old dacha in the Ozero compound for a few days. He went there to be alone, the close ally said.[9] He was deep in thought, and something was clearly weighing on him.
It was only after three weeks of tragedy and terror that September that public perception of Putin was turned around. The headlines surrounding Mabetex were blown away, while Putin rose to take command and Yeltsin disappeared from sight.
*
Late in the evening of September 4 1999 a car bomb ripped through an apartment building in the Dagestani town of Buynaksk, killing sixty-four people, most of them family members of Russian servicemen. The blast was seen as a response to the escalation of the armed struggle with Chechen rebels, who had launched a new incursion into Dagestan that same weekend, seizing several villages just one day after Putin, the newly anointed prime minister, had declared victory for federal forces in Dagestan. It seemed yet another tragic twist in the sporadic clashes Russia had been forced to engage in ever since Yeltsin launched a war against Chechen separatists in 1994.
When, just four days later, another blast tore out the central section of an apartment building in a sleepy working-class suburb of south-east Moscow, killing ninety-four people as they slept in their beds, Russia’s military struggle in the Caucasus seemed to have acquired a deadly new reach. At first, investigators said the blast might have been an explosion of natural gas.[10] Few of the families who lived in the building had anything to do with the breakaway Chechen republic. How could the blast have anything to do with a far-off military struggle? But one by one, without presenting any evidence, officials began to denounce the bombing as an attack by Chechen terrorists. Emergency workers had barely finished digging out the last few charred bodies from the wreckage of what had been number 19 Guryanova Street when, four nights later, another blast completely obliterated a drab nine-storey apartment building on Kashirskoye Shosse in the south of Moscow. One hundred and nineteen people died. The only evidence that seemed to remain of human life were children’s toys left floating in pools of mud.[11]
Panic spread through Moscow. It was unprecedented for the near decade of on-off war against separatist rebels in the south to reach into the heart of the capital. As the national sense of emergency and fear grew, the financial scandals surrounding the Yeltsin Family were pushed far off the front pages, and Vladimir Putin was thrust to the fore. This was the pivotal moment at which Putin took over the reins from Yeltsin. Suddenly, he was the country’s commander in chief, leading a bombastic campaign of airstrikes against Chechnya to avenge the attacks.
What happened that autumn, as the death toll from the apartment blasts rose to over three hundred while the Kremlin rolled out a meticulous PR campaign, has become the most deadly and central conundrum of Putin’s rise. Could Putin’s security men have bombed their own people in a cynical attempt to create a crisis that would ensure he took the presidency? The question has often been asked, but answers have been thin on the ground. Anyone seriously involved in investigating the issue seems to have died or been arrested unexpectedly.[12] Yet without the blasts and the concerted military campaign that followed, it’s impossible to imagine that Putin would ever have garnered the support to pose a serious challenge to Primakov and Luzhkov. The Yeltsin Family would have remained mired in the Mabetex and Bank of New York investigations, and Putin by association, as Yeltsin’s chosen successor, would have been ground down with them too. Now, as if on cue, he suddenly emerged confident and prepared. He was the all-action hero who by September 23 had launched airstrikes against the Chechen capital Grozny, while Yeltsin had completely disappeared from view. Putin spoke to the Russian people in the language of the street, vowing to ‘wipe out’ terrorists ‘in the outhouse’,[13] lashing out at the breakaway republic as a criminal state where ‘bandits’ and ‘international terrorists’ roamed free, enslaving, raping and killing innocent Russians.[14] To the Russians it seemed like a breath of fresh air. Compared to the sick and ailing Yeltsin, suddenly they had a leader who was in charge.
In a series of slick TV encounters with the military leadership in Dagestan, Putin was seen bounding from a descending military helicopter, dressed for action in khaki trousers and light jacket. He was shown solemnly raising a toast in a field tent with military commanders. ‘We have no right to show a second of weakness, because if we do it means all those who died have died in vain,’ he declared with firm conviction.[15] He was presented as the saviour of the country, a Russian James Bond who would restore order and hope.
The campaign was a shot in the arm for Russians’ humiliated sense of national identity. It immediately distinguished Putin from the chaos and collapse of the Yeltsin years. The all-out air assault gave vent to a decade of pent-up nationalistic frustration that had escalated earlier that year when NATO forces had launched an incursion into Russia’s traditional Eastern European sphere of interest, bombing Kosovo in the former Yugoslavia. As the airstrikes stretched into the autumn, demolishing more and more of Chechnya and indiscriminately killing thousands of civilians, Putin’s approval ratings soared from just 31 per cent in August to 75 per cent by the end of November.[16] If it had been a plan, Operation Successor, as it later became known, was working: an enormous pro-Putin majority had been formed.
But nagging doubts over the Moscow blasts were expressed almost immediately. Communist deputy Viktor Ilyukhin was one of the first to raise the alarm, claiming that the Kremlin could be behind the bombings in an attempt to fan hysteria and discredit Luzhkov.[17] For months rumours had been rife in Moscow that the Kremlin might provoke some kind of crisis as a pretext for cancelling elections. The Duma’s speaker, Gennady Seleznyov, had informed lawmakers that another bomb attack had taken place in the southern Russian city of Volgodonsk three days before it actually happened.[18] The biggest red flag appeared late in the evening of September 22 in the town of Ryazan, not far from Moscow, when a resident reported to the local police that he’d seen three suspicious-looking individuals carrying sacks into the basement of his apartment building. By the time the police arrived, the suspects had left in a car whose licence plates had been partially papered over.[19] The police searched the basement of the building, and emerged shocked and white-faced: they’d found three sacks, connected to a detonator and a timing device.[20] The entire building was swiftly evacuated, its terrified residents not allowed back to their homes until the evening of the following day. The police initially said that tests had found the sacks to contain traces of hexogen,[21] a powerful explosive that had been used in the other apartment blasts. The local FSB chief said the timer had been set to go off at 5.30 that morning, and congratulated the residents on escaping with just hours to spare.[22]
The Ryazan FSB and police mounted a huge operation to track down the apparent terrorists, cordoning off the entire city. A day later, on September 24, Russian Interior Minister Vladimir Rushailo reported to law-enforcement chiefs in Moscow that another apartment bombing had been averted. But just half an hour later Nikolai Patrushev, the hard-bitten, salty-tongued FSB chief who’d worked closely with Putin in the Leningrad KGB, told a TV reporter that the sacks had contained no more than sugar, and that the whole episode had been no more than an exercise, a test of public vigilance.[23] Patrushev was as ruthless as he was relentless in manoeuvres behind the scenes,[24] and his new explanations not only contradicted Rushailo, but seemed to surprise the Ryazan FSB, which had apparently been on the verge of capturing the men who’d planted the sacks.[25] The local resident who originally contacted the police later said that the substance he saw in the sacks was yellow, with a texture more like rice than sugar – a description that, according to experts, matched hexogen.[26]
For months afterwards, the residents of the apartment building at 14 Novoselyeva Street were angry at, confused and traumatised by the conflicting accounts. Several insisted that they didn’t believe it could have been a mere exercise.[27] A report later emerged that local law enforcement had intercepted a phone call they believed had been made by the apparent terrorists to an FSB-linked number in Moscow.[28] If this was true, it was starting to look as if Patrushev had declared the incident was just an exercise to make sure the investigation went no further. Local authorities involved in the investigation clammed up, refusing to comment to the press except to confirm the official line that it had all been an exercise. The police explosives expert who carried out the initial tests was transferred to a special unit whose employees are forbidden from speaking to the press.[29] The case files were immediately classified.[30]
A few years later, in 2003, a brave former FSB colonel, Mikhail Trepashkin, who stuck his neck out to investigate the Moscow bombings, was tried and sentenced to four years in a military prison. He had been arrested just days after telling a journalist that a composite sketch of one of the suspects in the first blast, at 19 Guryanova Street in Moscow, resembled a man he recognised as an FSB agent.[31] (The sketch, based on a description by one of the eyewitnesses, a building manager, had later been switched to a more suitable subject, a Chechen who claimed he’d been framed. The original sketch had been disappeared from police files.[32])
If this really was the deadly secret behind Putin’s rise, it was the first chilling indication of how far the KGB men were willing to go. For years, questions have swirled over the bombings, while investigative journalists have penned exhaustive accounts of everything that happened then, only to be met by a wall of denial from Putin’s Kremlin. But one of the first chinks in the Kremlin’s version has recently appeared. A former Kremlin official has claimed he heard Patrushev directly speak about what actually happened in Ryazan. Patrushev had raged one day about how the interior minister Vladimir Rushailo, a holdover from the Yeltsin years with close ties to Berezovsky, had nearly exposed the FSB’s involvement in the bombings: his officers had been close to catching the agents working for the FSB who planted the explosives. Rushailo had nearly blown the whole operation, seeking compromising information against the FSB and Patrushev. The FSB had been forced to backtrack and say the sacks contained no more than sugar to prevent any further investigation.[33]
Patrushev had apparently expressed no remorse, only anger at being threatened with the FSB’s exposure. The former Kremlin official said he still could not quite fathom what he recollected hearing: ‘There was no need for the bombings. We would have had the election all sewn up in any case.’ The Kremlin propaganda machine was powerful enough to ensure Putin’s victory in any case. But Patrushev, he said, ‘wanted to tie Putin to him and cover him in blood’.[34]
The Kremlin’s spokesman, Dmitry Peskov, dismissed the claim as ‘total rubbish’. And to this day, Valentin Yumashev insists that there could never have been any FSB conspiracy behind the apartment bombings: ‘I am absolutely sure this is not correct. The country categorically didn’t want a second Chechen war.’[35] The first war had been so humiliating, Russia’s once-great army losing so many lives in a tiny republic that barely even appeared on the map, that ‘to be an initiator of war in Chechnya was suicide’. ‘To organise explosions in apartment buildings so as to start a second war,’ said Yumashev, ‘would be to completely destroy the political future of the person you are trying to support.’ But the campaign Putin conducted was vastly different to the war waged by Yeltsin that lost so many lives. It consisted mainly of airstrikes, rather than sending in ground troops, and Putin had made the distinction clear from the start: ‘This time we will not put our boys under fire,’ he said.[36] Pavlovsky, the Kremlin spin doctor, also denied that there could ever have been any plot: ‘The apartment bombings … seemed to us to be electorally advantageous for Luzhkov. But all of a sudden he disappeared from view … That September of hexogen, the Moscow mayor lost the chance for leadership of Russia.’[37]
But Luzhkov, as Moscow mayor, had no power to command airstrikes on Chechnya in vengeance for the attacks. Though he was supported by the NTV channel of media mogul Vladimir Gusinsky, he was never going to be able to marshal a propaganda machine like that of the state-owned TV channel, RTR, and Berezovsky’s ORT to slavishly promote his every action, as Putin did. All of the Kremlin’s counter-arguments seemed weak. If the bombings were an FSB plot, they could have been undertaken without the knowledge or involvement of the Yeltsin Family. Putin’s KGB men might have ruthlessly taken the initiative themselves. ‘We all thought it was an act of terror. We had no idea it could be anything else,’ said one person close to the Yeltsin Family.[38] But if there was an FSB plot, it went far beyond even the KGB playbook that since the 1960s had supported terrorist groups in the Middle East and Germany as a way of disrupting and dividing the West. German terrorist groups handled by the Stasi and the KGB had blown up American servicemen in Berlin nightclubs and German bankers on their way to work,[39] with Vladimir Putin – if the account of one former member of Germany’s Red Army Faction is to be believed – handling members of these groups while stationed in Dresden.[40] It was another matter entirely, of course, to direct such tactics at Russia’s own citizens. ‘I couldn’t believe it at the time, that any citizen of Russia would be ready to kill such a number of civilians for their own political aims,’ said one Russian tycoon who’d been close to Berezovsky. ‘But now, though I don’t know whether they participated or not, I know only one thing: that they really are capable of more than this.’[41] ‘Whichever way you look at it, he began the election campaign with the apartment bombings,’ said a senior Russian banker with ties to foreign intelligence.[42]
Putin had emerged as a tough-talking leader from a new generation. ‘The campaign acquired the stylistic mask of national liberation revolution,’ said Pavlovsky. ‘Here was a simple guy from a Leningrad communal apartment who in the name of the people was taking the Kremlin … Putin’s decision to go to war to avenge the bombings was spontaneous, but it didn’t destroy our model. It fitted with the idea of a strong new regime.’[43]
*
For a long time in the years that followed, Boris Berezovsky, the fast-talking mathematician who’d been the arch-insider oligarch of the Yeltsin era, had been haunted by the apartment bombings. Later, at odds with Putin’s Kremlin and forced into exile in London, he’d made repeated claims that the FSB was involved in them.[44]
But in those days Berezovsky was still on board, and as the parliamentary elections in December 1999 loomed, he put aside his qualms about Putin’s KGB past[45] and got firmly behind the Putin campaign. Despite being hospitalised with hepatitis, he waged a devastating media campaign that autumn through his ORT federal TV channel that sought to destroy the reputations of Primakov and Luzhkov. The two men had formed a powerful parliamentary alliance called Fatherland-All Russia, and the Duma elections were to be a crucial first test of its potency. From his hospital bed, Berezovsky would call ORT late at night with instructions for Sergei Dorenko,[46] a popular, deep-voiced anchor who savaged Primakov and Luzhkov in weekly broadcasts that broke boundaries even by the standards of Russia’s mud-slinging media wars. In one, Dorenko accused Luzhkov of taking $1.5 million in kickbacks from the corrupt mayor of a Spanish seaside town, while his wife, Yelena Baturina, Moscow’s biggest construction tycoon, had allegedly funnelled hundreds of millions abroad through a chain of foreign banks.[47] The sixty-nine-year-old Primakov, Dorenko said in another broadcast, was unfit to become president because of hip surgery he’d undergone recently in Switzerland. Graphic footage of blood and bone in a similar operation being performed on another patient in Moscow was shown to underline the argument. Sticking the boot in further, Dorenko claimed that while Primakov was Russia’s foreign-intelligence chief he could have been involved in two assassination attempts against Georgian president Eduard Shevardnadze. The programme also played footage of Skuratov with the prostitutes almost on a loop, in an effort to discredit the regional governors who’d joined Fatherland-All Russia and given their backing to Skuratov.[48]
Berezovsky, high-octane as ever, said he was intent on destroying Primakov and Luzhkov. He left hospital one night in early autumn to visit an associate to organise logistics for the campaign. ‘He was completely wrapped up. He looked like a crazy man,’ the associate said.[49] ‘He was carrying three mobile phones as usual and talking non-stop. He kept saying, “I’m going to break them into small pieces. Nothing will remain of them.”’ Though Putin’s approval ratings were climbing steadily, the stakes were high. The criminal investigations launched under Primakov into Berezovsky’s business dealings were still pending. He continued to face the threat of arrest.[50]
Dorenko was an extremely effective media attack dog, and slowly support for Fatherland-All Russia began to fall. But the allegations against Primakov and Luzhkov could seem tame compared to the financial scandals that faced the Yeltsin Family, which were aired in full on the rival NTV channel, which backed Primakov and Luzhkov. And although Berezovsky was helping cobble together a new pro-Kremlin parliamentary party, called Unity, in answer to Fatherland-All Russia, it looked like no more than an amorphous mass of obscure and faceless bureaucrats. In the middle of November, Unity’s approval ratings stood only at 7 per cent, compared to nearly 20 per cent for Fatherland-All Russia.[51]
It was only when Putin issued a public statement of support for Unity at the end of November that the party’s ratings began to surge. By then, the blanket TV coverage of Putin’s decisive action against Chechnya had turned him into a political Midas, and within a week Unity’s approval ratings had surged from 8 per cent to 15.[52] Fatherland-All Russia’s had fallen to around 10 per cent, despite continuing strong support for Primakov personally, while the Communists led with 21 per cent. Putin’s own ratings were sky-high at 75 per cent.[53] Even with Berezovsky’s and Dorenko’s Herculean efforts, the Kremlin might have lost parliament without Putin’s backing for Unity.
On polling day, December 18, Unity’s vote was unexpectedly high, at 23 per cent, just one percentage point behind the Communists. Even more importantly, Primakov and Luzhkov’s Fatherland-All Russia had been trounced, with just 12.6 per cent of the vote.[54] Yumashev claimed that it was only then that Yeltsin had been sufficiently convinced of Putin’s power as a rising political force to take the decision to stand down early to make way for him. He insisted that Yeltsin had taken the decision alone, and Pugachev’s role was minimal.[55]
In the memoirs Yumashev ghost-wrote for Yeltsin, the Russian president told of how he’d summoned Putin to tell him of his decision to step down on December 14, four days before the election. According to Yeltsin, Putin had appeared reluctant to take power. Yeltsin wrote that he’d told Putin when they met that day, ‘I want to step down this year, Vladimir Vladimirovich. This year. That’s very important. The new century must begin with a new political era, the era of Putin. Do you understand?’ Yeltsin said that Putin had remained silent for a long time before replying, ‘I’m not ready for that decision, Boris Nikolayevich. It’s a rather difficult destiny.’[56]
But neither the story of Putin’s apparent reluctance, nor Yeltsin deciding to step down only at the last minute, matched the narrative that had already unfolded. Nor did it match Pugachev’s or the two other Kremlin officials’ tale, that the decision had been taken much earlier. In the months preceding the parliamentary elections, Putin had already essentially taken over the army and the entire law-enforcement system, including the security services, while Yeltsin faded from view. Putin couldn’t have acted as decisively or as presidentially as he did in the military campaign against Chechnya if he hadn’t already received some assurance that he was about to become president.
Even if Putin had been personally reluctant to take on the presidency, in those days he was just one member of a group of security men who were coming to power. When he addressed the FSB in the final days of 1999 for the annual celebration of the Chekists, as the secret police were known, he made their ascendancy clear: ‘The group of FSB operatives assigned to work undercover in the government have successfully accomplished the first stage of their task,’ he said.[57] He made the comment with a deadpan expression, but he could not help but smirk as he reached the end of his speech. If it was meant as a joke, the deep shadows under Putin’s eyes and his pale, gaunt appearance told a different story. Essentially, Putin was telling the security men that the country was finally theirs.
Putin’s remarks slipped by unnoticed in the background. But the security men in the Kremlin backing him had been quietly preparing. Three days before the end of the year Putin had published an article on a new government portal that sounded like a manifesto for the security forces. Entitled ‘Russia at the Turn of the Millennium’,[58] it was the first time he had laid out his vision for the country.
The article signalled that Putin was planning to take on the mantle of Andropov’s modern-day heir. He outlined a programme for a new era of state capitalism, in which Russia would fuse the strong hand of the state with elements of a market economy. The aim was to modernise and boost efficiency by encouraging economic growth and further integration into the world economy, but also to pursue stability and strong state power. It was on the one hand a resounding rejection of the dogma of Communism, which Putin called ‘a road to a blind alley’, that had cost the country an ‘outrageous price’ and doomed it to lag behind economically advanced countries. But it also signalled a rejection of the path Yeltsin had once sought for Russia as a liberal, Western-style democracy. The country was to seek a third way that would rely on its traditions of a strong state. ‘It will not happen soon, if it ever happens at all, that Russia will become the second edition of, say, the US or Britain, in which liberal values have deep historic traditions,’ Putin wrote. ‘For Russians, a strong state is not an anomaly which should be got rid of. Quite the contrary, they see it as a source and guarantor of order and the initiator and main driving force of any change.’[59]
In the rush and preparations before the New Year holidays, the eve of a new millennium, barely anyone noticed. Only one national newspaper ran a comment on Putin’s article.[60] Otherwise, it didn’t register with anyone at all. Across Russia, families were dashing to buy last-minute presents. Fir trees were being sold in snowbound town squares. The streets were jammed with traffic as usual. In most homes, families would gather around the television for the Russian president’s annual New Year speech. But this year, at the stroke of midnight, the turn of the millennium began with a shock. Unsteady, puffy-faced, yet speaking with dignity, Yeltsin announced to the nation that he was stepping down early, and anointing Putin acting president. He made the announcement with all the swagger and drama that had defined his tumultuous rule. His decision had been kept secret to the very last. ‘I’ve heard people say more than once that Yeltsin would cling to power for as long as possible, that he would never let go,’ he said. ‘That is a lie. Russia should enter the new millennium with new politicians, new faces, new people who are intelligent, strong and energetic, while we, those who have been in power for many years, must leave.’
But Yeltsin also bowed out with an extraordinary expression of humility, and an apology for the near-decade of chaos that had unfurled as he sought to dismantle the Soviet regime, and for his failure in the end to fully bring his country freedom: ‘I want to ask your forgiveness – for the dreams that have not come true, and for the things that seemed easy but turned out to be so excruciatingly difficult. I am asking your forgiveness for failing to justify the hopes of those who believed me when I said that we would leap from the grey, stagnating totalitarian past into a bright, prosperous and civilised future. I believed in that dream. I believed that we would cover that distance in one leap. We didn’t.’[61]
It was a poignant cry for what might have been – and possibly prophetic of what was to come. He was handing over a country that had been blighted by one economic crisis after another. But he was giving it to a man who’d been helped to power by a group of security-services men who believed that the overriding achievement of the Yeltsin era – the establishment of basic democratic values – had brought the country to the brink of collapse. When Yeltsin handed the presidency to Putin, the values of democracy appeared strong. Governors were elected. The media was largely free from interference from the state. The upper and lower chambers of parliament were a forum for criticism of government policy. But those who’d supported Putin’s rise believed Yeltsin had taken the country’s hard-won freedoms too far, and that under the influence of the West he had engendered a regime of lawlessness that had brought a corrupt oligarchy to power, and put the state itself up for sale. Instead of seeking to strengthen democratic institutions to tame the helter-skelter excesses of the Yeltsin years, they intended to dismantle democracy – purely to consolidate their own self-serving power.
If Yeltsin had any inkling that Putin was influenced by that strain of thought, that he was about to turn the dial back to a grim echo of the grey totalitarian past, he struggled not to let it show. But he was essentially handing over power to the komitetchik who’d become the anointed front man for the foreign-intelligence cadres who started the Soviet Union’s move to the market in the first place, recognising the need to change in order to survive. For these men, Putin’s vault to become Yeltsin’s successor meant the revolution they’d embarked on to bring the market to Russia could be completed. The fragments of KGB networks they’d preserved following the Soviet collapse, as they followed the memos of the Politburo to create a hidden economy, were in position to be revived and restored. The financial collapse under Yeltsin had put them in a strong position to take back the leadership role. Putin’s programme for a stronger state resonated with a population that had become deeply disenchanted with the free-for-all excesses of the Yeltsin era. People were exhausted from a decade in which they’d lurched from one financial crisis to another, while a handful of businessmen close to power had gained unimaginable wealth. With the right choreography, the way was open for them. ‘The rise of Putin was a natural consequence of the nineties,’ said one former senior government official with close ties to the security services.[62]
Primakov and Luzhkov melted into the background to cede the way to Putin as soon as Yeltsin announced he was stepping down to make Putin acting president. Following the defeat of Fatherland-All Russia in the parliamentary elections, neither of them ran for president. Instead, they cast aside their apparent former rivalry and threw their backing behind Putin. Primakov, the former head of the Russian foreign-intelligence service who’d been at the heart of the Soviet Union’s efforts for perestroika and an end to the ideological standoff with the West, had stepped aside for a member of the younger KGB generation. In doing so, he was making way for a group that would be more adept at completing Russia’s transition to a state capitalism that would reach far into international markets. Putin’s men would not be tainted, as Primakov would have been by his Communist past, which still deeply coloured his views and his actions despite his role in Russia’s initial transition. They were part of a far more commercial generation who initially liked to paint themselves as progressive. They were younger, and the elderly generals at the top of Russia’s foreign-intelligence service still thought they could control them. Yet Primakov was passing the baton to a group that was far more ruthless than his own, that would stop at nothing to assure their own rise to power.
Though Primakov would just as surely have sought to restore the power of the Russian state and the power of the KGB, he hadn’t had to climb through the crime-racked rubble of St Petersburg of the nineties. He hadn’t been part of the fusion of KGB and organised crime that had ruthlessly taken over the city’s sea port and fuel networks, sharing the spoils of the privatisation of the city’s property with the Tambov organised-crime group and then laundering the cash. He hadn’t been part of the younger KGB generation who’d made their way in the eighties funnelling cash and technology through the systems of the West, combining KGB networks with a ferocious capitalist grasp. He was an elder, more principled statesman of the Cold War, far above the asset grab of the nineties. He hadn’t been like Putin’s men, left out of the carve-up of the nineties and hungry to take a slice of the nation’s wealth for themselves.
The consequences of the Yeltsin Family’s decision to back Putin, to save themselves from Primakov’s and the prosecutors’ attacks, were to be felt in Russia, and across the world, for decades to come. We’ll never know what would have happened had Primakov taken the presidency. But it is safe to say that his version of a KGB revanche would never have lasted as long as Putin’s, nor would he have ultimately acted as ruthlessly on the international stage. His attachment to the Communist era would have made him a target for a backlash. He would have seemed like a dinosaur from the past,[63] while a Stepashin presidency would have been far milder, and less likely to see the rollback of freedoms that Putin’s regime led.
*
In agreeing to step down early, Yeltsin opened the way for an immediate unwinding of some of the democratic gains of his rule. He’d made Putin’s election as president almost a fait accompli. As acting president, Putin had the entire might of the administration behind him, and could almost spend the nation’s budget at will. On the eve of the election, which was to take place on March 26, he’d signed a decree boosting wages for teachers, doctors and other state workers by 20 per cent.[64] No one doubted that he would win.
He hardly even had to campaign, and treated the entire election process with disdain. ‘I could never in my worst dreams imagine I would take part in an election,’ he told journalists on election night. ‘It seems to me an absolutely shameful business … You always need to promise more than your opponent to look successful. I could never imagine that I would have to make promises knowing beforehand that such things could not be done. Thankfully the way this presidential campaign was conducted helped me avoid this. I did not have to deceive a huge part of the population.’[65]
He refused to take part in television debates with the other candidates – the stalwart Communist leader Gennady Zyuganov and the firebrand nationalist Vladimir Zhirinovsky of the Liberal Democrat Party – both of whom had already lost to Yeltsin in 1996, and stood even less chance against Putin. He eschewed the Western-style TV clips and boisterous events that had marked Yeltsin’s campaign. ‘These videos are advertising,’ he told reporters. ‘I will not be trying to find out in the course of my election campaign which is more important, Tampax or Snickers,’ he sneered.[66]
The fact was, in those days Putin would have been unlikely to survive any televised debate. He’d never played a role as a public politician. But he was given an easy out. Instead of campaigning, his role as acting president meant that he was granted fawning blanket coverage on TV, which portrayed him as the nation’s resolute leader. He was shown criss-crossing the nation on visits to factories, and swooping into Chechnya on a Sukhoi fighter jet. All of these activities, campaign staff insisted, were part of his working schedule and had nothing to do with the election campaign. The tactics chimed with an electorate disillusioned with the showmanship and political drama of Yeltsin. They just wanted someone to lead. Putin’s rivals were left far behind, fringe figures irrelevant to an election that was rapidly becoming a foregone conclusion. Two days before the vote, Putin and Luzhkov appeared together on a Moscow construction site, displaying their truce for all to see.[67]
The Kremlin had been handed to Putin on a plate. ‘It was like a Christmas present. You wake up in the morning and suddenly it’s there,’ said Pugachev. ‘There were no real elections, and the entire system had already been built.’[68]
But in the rush to hustle Putin into power, a worrying omen had barely been noticed. He began his campaign with a farewell to the man who’d been his mentor, who’d defined him in the eyes of the Yeltsin Family as a progressive and a democrat. Anatoly Sobchak, the former St Petersburg mayor, had died suddenly just as the election campaign was due to officially start. He’d returned to Russia from his forced exile in Paris shortly before Putin was appointed prime minister the previous summer. The criminal case accusing him of bribery when he served as mayor had been dropped, possibly at Putin’s instigation. And now that his former protégé was fast on the way to becoming the country’s leader, he didn’t have to worry about it returning to haunt him. To outward appearances, he threw his backing behind Putin’s campaign. But according to Pugachev, Sobchak had warned him that he was making a mistake in forwarding Putin’s candidacy, and in November 1999 he’d made a rare outburst against the St Petersburg FSB and other law enforcement for their aggressive takeover of the Baltic Sea Fleet, saying those behind its bankruptcy should be jailed.[69] It was the only time he’d ever publicly criticised the city’s post-Soviet law enforcement, and he never did so again.
On the day he died, February 20 2000, he was accompanied by a figure from Russia’s underworld, from the shadowy nexus between the security services and organised crime. This was Shabtai Kalmanovich, a KGB operative who’d been jailed for five years in Israel in 1988 for spying for the Soviets, and who on his release developed close ties with the leaders of Russia’s most powerful organised-crime group, the Solntsevskaya. Kalmanovich had been a close partner of a businessman running South American fruit imports through the St Petersburg sea port, and according to one former city official he handled South American contraband too. To Sobchak’s widow, Kalmanovich was a family friend.[70] But to the FBI he was ‘a powerful associate of the Solntsevskaya Organisation … He is a millionaire Russian émigré … with ties to former KGB agents and high-level Russian, Israeli and other government officials throughout the world.’[71]
The St Petersburg sea port still seemed to haunt Sobchak wherever he went. When he lived in Paris, a close neighbour was Ilya Traber,[72] the leading member of the Tambov organised-crime group who’d controlled the sea port and had befriended the Sobchaks in the early nineties, when he dealt in antiques. And when he died, it seemed Kalmanovich had again brought the sea port to him. Complaining of chest pains, Sobchak had retired early that day to his hotel room in Kaliningrad, where he was staying while delivering a course of lectures at the local university. Half an hour later he was found unconscious by ‘the person staying in the room next to him’.[73] His door had been unlocked. For some reason an ambulance wasn’t called for another thirty minutes, and by the time it arrived another ten minutes later, Sobchak was dead.[74] It was Kalmanovich, Sobchak’s widow later said, who had been the one to find him.[75]
At first, the local authorities had opened an investigation into suspected poisoning, but they later announced that Sobchak died of natural causes. He’d suffered a heart attack before. But some associates still question whether he knew too much for the comfort of Putin’s men. Sobchak had been privy to some of the murkiest dealings of Putin’s St Petersburg: the oil-for-food scheme, the laundering of cash for the Tambov group through the real-estate company SPAG, the privatisations and the break-up of the Baltic Sea Fleet that led to Traber’s takeover of the sea port and the oil terminal. No one had been able to explain why an ambulance was not called immediately after he was discovered unconscious. ‘I don’t believe he died his own death,’ one former Traber associate said. ‘He knew too much about all this. Of course they got rid of him, but they are too clever to leave any trace.’[76]
Putin had comforted Sobchak’s widow, Lyudmilla Narusova, as she wept in St Petersburg’s Tavrichesky Palace, where his body lay in state. He publicly criticised those who had pursued Sobchak over the corruption allegations, claiming that in death he was a victim of persecution.[77] Narusova, a glamorous blonde who would later become a politician in her own right as a senator in the Federation Council, the upper chamber of parliament, appeared to cling to the belief that Putin had remained loyal to her husband throughout. But, just once, years later, she allowed herself to voice doubts about his death. It was in November 2012, shortly after her career as a senator had come to an abrupt end when she was suddenly removed as a candidate for re-election to her seat. As Putin’s rule eradicated all remnants of parliamentary freedom, she’d become too outspoken and critical. The process of her dismissal, and the clampdown she’d seen imposed on the country’s politics, had ‘destroyed certain illusions’, she told a reporter.[78] She insisted that she knew Putin as an ‘absolutely honest, decent and devoted person’, but she said she felt ‘disgusted’ by those who surrounded him. When her husband died, she’d had an independent autopsy conducted. It found that he had died because his heart stopped, she said. But she would not say how exactly that had happened – only that tests had found it had not been due to a heart attack. ‘The scars on his heart were old scars from the heart attack he suffered in 1997. Why his heart stopped is another question,’ she told the reporter. She claimed to know the answer, but said she could not disclose it because she feared for her daughter’s life: ‘I can see what these people are capable of, these people who don’t want to hear a word of truth. All the documents are kept in a safe abroad. Even if something happens to me, they will still be there.’ When asked who she meant by ‘these people’, she said, ‘Some of them are in power.’ She never repeated the allegation.[79]
*
Following his appointment as acting president, Putin slowly began to shed the skin of his St Petersburg past, and to adjust to his new life. For a time, Yeltsin and his family remained in the vast Gorki-9 presidential complex in the woods outside Moscow, and Putin, still living in the state dacha of the prime minister, needed a presidential residence. Pugachev drove him to look at three state residences from Soviet times that were free.[80] One was too close to the road, another was not suitable at all. But the third, a vast estate built before the Revolution in the nineteenth century, appeared to fit the bill. For Pugachev, the residence, named Novo-Ogarevo, had a historic and spiritual significance. It had been the home at the turn of the century of Grand Duke Sergei Alexandrovich, a son of Tsar Alexander II, and his wife Elizaveta Fyodorovna. In the tumult of those pre-Revolutionary years, a terrorist bomb had taken the life of the arch-conservative Grand Duke, who served as governor of Moscow. His wife had quietly gathered his limbs and other body parts from the street, and devoted the rest of her life to caring for the needy, eventually becoming a nun. After the Bolsheviks took power she was murdered by being buried alive in a mineshaft, and in 1981 she was canonised as a Russian Orthodox saint. To Pugachev’s Orthodox believer’s eyes, Novo-Ogarevo had significance as a religious relic of the tsarist past. For Putin, however, the house, built in the style of a neo-Gothic Scottish castle, with a vast lawn that stretched down to the Moscow river, had quite a different pull: it came equipped with a fifty-metre swimming pool. When he saw it, Pugachev said, ‘his eyes went so big and round. I understood that he wouldn’t need anything else in life. I thought this would be the limits of his dreams.’
Pugachev, still apparently believing that Putin was under his control, thought it would be easy to impress him with the trappings of presidential life: ‘Before the collapse of the Soviet Union, he lived most of his life in communal flats. He was forty before he began to work in the mayor’s office.’ He’d been born and raised in a cramped communal flat in Leningrad, and before he was sent to Dresden by the KGB, he and his wife Lyudmilla had continued to live in a communal flat there. ‘Lyuda was told she could only use the kitchen between three and five p.m.,’ said Pugachev. ‘Can you imagine coming to this after living like that?’[81]
The Novo-Ogarevo estate had been renovated in Soviet times as a guest house for visiting government delegations from abroad. A second house, a copy of the first, was built a short distance away, across an orangery, for holding Central Committee receptions. The heads of the Soviet republics had gathered there to work on Gorbachev’s historic new Union agreement, the fateful reform of relations between the Soviet republics that was one of the causes of the August 1991 coup. Pugachev could see that beyond minor renovations, all that was needed for the Putins to move in was to build a high enough fence.
Pugachev still appeared to believe that Putin was a reluctant leader. Putin would often refer to himself as the ‘hired manager’ and seemed convinced that his term in power would only be for a few years. From the start of his career in St Petersburg, from the time of his very first interview with Igor Shadkhan, he had always portrayed himself as a ‘servant of the state’.
As the results of the presidential election came rolling in on the evening of March 26 2000, Putin still seemed outwardly dazed by his sudden elevation. Even when his vote count passed the 50 per cent needed for victory in the first round, he appeared daunted by the task ahead. ‘Everybody has a right to dream,’ he told a room at his campaign headquarters packed full of journalists. ‘But nobody should hope for miracles. The level of expectation is really very high … people are tired, life is tough and they are waiting for a change for the better … But I don’t have the right to say from now on miracles are going to happen.’[82]
But behind the scenes, at Yeltsin’s dacha outside Moscow, Yeltsin’s daughter Tatyana was already celebrating. Footage shot for a documentary film by Vitaly Mansky shows the Yeltsin family gathering around a stately oak dining table.[83] When Putin’s vote edges over 50 per cent, celebrations begin. Champagne is poured. Tatyana is leading the jubilation, almost hopping in joy. ‘We can start having champagne – small sips!’ she smiles. ‘We won!’ But Yeltsin himself seems to be struggling with the loss of power, and the potential loss of his legacy. Puffy-faced and impaired by illness, he seems to have trouble comprehending what is going on. ‘Papa, why such a sad face?’ Tatyana asks him at one point. ‘Papa, are you glad? … You did everything. You looked at the person and saw he was fit.’
But when Yeltsin called to congratulate his successor that night, he received the ultimate insult. The man he’d handed the presidency to was too busy to take his call. Already he was no one, an old man left struggling to speak and fumbling with the phone. Tatyana’s relief, by contrast, was clear. Later that evening she smiled and snuggled with Yumashev at Putin’s campaign headquarters, where Yeltsin-era holdovers – Voloshin, Pavlovsky, Chubais – were celebrating with some of Putin’s St Petersburg security men. The victory was jointly theirs.
The Yeltsin Family still felt secure in the belief that Putin would protect their safety and their fortunes from attack. When Yeltsin had agreed to bow out ahead of time, behind the scenes they’d made a pact with his successor, according to a close Putin ally and a former senior government official.[84] One of Putin’s first acts as acting president was to issue a decree granting Yeltsin immunity from prosecution. But a broader bargain had also been sealed behind the scenes. ‘The negotiations that went on over Putin’s rise and Yeltsin’s departure were about property,’ said Andrei Vavilov, first deputy finance minister at the time. ‘The subject of these negotiations was about property, and not about the structure of society … Everyone forgot. Everyone thought that democracy would just be there. Everyone was just thinking about their personal interests.’
The bargain was to guarantee the Yeltsin Family immunity from prosecution and preserve the financial empires of their acolytes, chief among them the vast businesses owned by Berezovsky’s business partner Roman Abramovich, long labelled in the media as the cashier of the Yeltsin Family. The businesses involved included the Sibneft oil major and the aluminium giant Rusal, forged just before Putin took the presidency and permitted to take control of more than 60 per cent of the Russian aluminium industry – a potent symbol of the Family’s continued power.[85] The deal also granted the Yeltsin Family’s appointees the right to continue to run the economy during Putin’s first term in power, the close Putin ally said.[86]
Yumashev, however, denies any such deal was ever made. The decree issued by Putin granting Yeltsin immunity had made no mention of the Yeltsin Family, he said, while the Family had no businesses to be preserved. As for the make-up of the government, ‘Putin was absolutely free in choosing whoever he wanted. He could have fired everyone.’ The only reason behind Putin’s rise to power, he said, was that Yeltsin believed in his adherence to democracy.[87]
Pugachev too told of a curious moment. He insists that he agreed with Yumashev and Tatyana that they would leave the country and allow Putin free rein to run things as he wanted. The only thing they still needed to secure was an immunity guarantee, he believed. But Putin had turned round at the last minute, when they met at his dacha soon after the election to celebrate the formal handover of power, and insisted that the Yeltsin Family and their people in the government stayed, said Pugachev: ‘I didn’t understand it. He’d been talking all the time about the need for a clean slate. But then he told them, “We should do all this together. We are one team.”’[88]
Despite the apparent aboutface, Pugachev nevertheless understood that a regime change was under way. Putin’s people, the KGB men, were coming to power, and he worked to ingratiate himself with them. ‘In any case, it was clear that the men of force – the security men and spies known as the siloviki – were coming to power,’ he said.[89]
To many, including Khodorkovsky’s associate Leonid Nevzlin, after everything that followed it’s still a matter of bewilderment that the Yeltsin Family could have made a pact with the likes of Putin: ‘When they had all sources of information under their control, how could they have brought him into the Kremlin? He was already a mafia guy in St Petersburg. How could they have made him successor?’[90]