PUTIN’S BAPTISM of fire in the trenches of civic government had put him in the media spotlight. For the first time, questions were being asked about his background and character: Was there more to this pragmatic official in whom Anatoly Sobchak had placed so much trust – or was he as colourless as he appeared? Putin was an intensely private, even secretive, man and he did not welcome this public scrutiny. It was just the start of a long and difficult relationship with the world’s journalists and commentators.
The first issue to emerge in print was Putin’s membership of the KGB. ‘Russia observers East and West have pounded away at his KGB roots as the sole determining factor of his actions,’ Gordon M. Hahn wrote in the Russia Journal. ‘They never so much as hint at his other formative political experience: his work in semi-democratic and corrupt administrations in Leningrad/St Petersburg and Moscow.’
While this was undoubtedly so, it was Putin’s KGB experiences that were the key to his personality in dealing with other people. After many years in the field, he had learned to control his feelings, an ability that sometimes gave the impression that he was emotionally cold when indeed he was a lot more interesting – and emotional – than he seemed. The most startling example of this trait was provided when the Putins’ Caucasian sheepdog Malysh was hit by a car outside their state-owned dacha at Zelenogorsk. Lyudmila picked up the wounded animal and drove her to a veterinary clinic but the vet was unable to save the animal. Lyudmila phoned Putin’s secretary Marina Yentaltseva and asked her to pass on the sad news to her husband.
Marina did as requested and was astonished at Putin’s reaction. ‘I looked at him and there was zero emotion on his face,’ she says. ‘I was so surprised that I said, “Did someone already tell you about it?” And he said calmly, “No, you’re the first to tell me”. In fact, he is a deeply emotional man, but when he has to, he can hide his feelings.’ Another individual, who is close to him but begs anonymity for fear of incurring disfavour, says somewhat more expansively: ‘You never get to know Vladimir just by looking at him or even by listening to him. Someone asked me [at the economic conference] in Davos: “Who is Mr Putin?’’ Well, the answer is hard to explain. Just as Winston Churchill said about Russia: “It’s a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest”. Well, that description could just as easily be applied to Vladimir. No one can ever be sure what is going on in his head, but you can be certain that what he is doing is good for his country.’
Quite apart from the high drama in which Putin was involved dayto-day at City Hall, the loss of his pet was just the start of several more serious incidents, which would have severely tested a weaker man. The first happened in October 1993, when CNN founder Ted Turner and his actress wife Jane Fonda visited St Petersburg to discuss the Goodwill Games; the international sporting event that Turner had launched in Moscow in 1986 to help take the chill out of the Cold War was due to be held in St Petersburg the following year. During their stay the American couple checked into the Astoria Hotel and Vladimir Putin was delegated by the mayor to accompany them to all of their meetings. It was a tight schedule and Putin, noted for his lateness, was struggling to meet it when he received a call from Marina telling him that Lyudmila had been in an accident.
‘Is it serious?’ he asked.
‘No, apparently not,’ his secretary replied. ‘But the ambulance took her to the hospital just in case.’
‘Let me try to get out of this meeting and go to the hospital.’
The Putins had spent the previous night with the children at the dacha at Zelenogorsk. In the morning Putin’s chauffeured car had picked him up and driven him into the city to meet the Turners. The accident had happened later that day when Lyudmila, with seven-year-old Katya lying asleep in the back seat, was driving to pick up Masha from school in the Putins’ Zhiguli.
She was going through a green light not far from Smolny when another driver swerved around a stationary car, jumped the red light and ploughed into the front of their vehicle at 80 kilometres an hour. ‘I didn’t even see it,’ Lyudmila says. ‘I had the green light and didn’t even look to the right.’
It was fortunate that the driver crashed into the right front side of the car: if he had hit the front or back door, either Lyudmila or Katya would probably have been killed. As it was, Lyudmila was knocked out for half an hour. When she regained consciousness, her first thought was for her daughter. She gave a woman driver, who had stopped to help, the telephone number of Igor Sechin and asked that he pick up Katya. This woman called an ambulance and then rang Sechin’s number. The ambulance took forty-five minutes to reach the scene of the accident. By the time it arrived, Lyudmila was in a state of shock and failed to tell the medics that she was qualified through her husband’s position to be taken to the Military Medical Academy. Instead, she was driven to the vastly inferior 25 October Hospital, which was supposed to specialise in trauma cases. Her nightmare was just beginning. The state of the hospital shocked her. The casualty department was littered with bodies of the dead and the dying. ‘I will remember it for the rest of my life,’ she says.
It is quite likely that Lyudmila would have died if she had stayed there. The doctors examined her and noticed that her ear had been torn in the collision and that she had hurt her back but failed to notice that she had several cracked vertebrae and a fractured skull. Untreated, she would have contracted post-traumatic meningitis.
Making his apologies to the Turners, Putin dashed to the hospital. In the emergency room the chief physician assured him: ‘Don’t worry, she’s not in any danger. We’re just going to put a splint on her back, and everything will be fine.’
Taking a trip on the newly launched Sapsan high-speed train linking Moscow and St Petersburg, 19 December 2009.
‘Are you sure?’
‘Absolutely,’ he said.
Meanwhile, Igor Sechin had picked up Katya, who was bruised and seemed subdued, and taken her back to Smolny. Marina took her to see a local doctor who advised that she consult a paediatrician to determine whether she was concussed. At the Paediatric Institute, a neurologist said that Katya was in shock and advised peace and quiet.
When Marina and Katya returned to Smolny, Putin asked Marina to phone Yuri Leonidovich Shevchenko, a surgeon at the Military Medical Academy (and later Putin’s Minister of Health) and inform him of Lyudmila’s accident and present whereabouts. Shevchenko immediately sent one of his medical officers, Valery Yevgenevich Parfyonov, over to the 25 October Hospital. ‘My ear was torn and they had decided to sew it up,’ Lyudmila says. ‘They had gine away, leaving me naked on the table in a freezing operating room, in a terrible state of semi-consciousness.’ When Parfyonov arrived at the hospital, he was told, ‘She doesn’t need anything. We just did an operation. Everything’s fine.’ He decided to check on the patient for himself. Lyudmila awoke in the operating room ‘to find an officer standing in front of me, holding my hand. He had a very warm palm. It warmed me up, and I knew that I had been saved’.
At the Military Medical Academy an X-ray revealed the serious nature of Lyudmila’s injuries and she received the proper treatment. It was more than a month before she was able to leave hospital, and then she could only crawl around the apartment. Putin was furious about the treatment his wife had received at the first hospital but, pragmatic as ever, he wasn’t too proud to ask for assistance. Shortly after she returned home, he telephoned Bernard Walter at the Dresdner Bank. The bank responded favourably. ‘For humanitarian reasons’, it paid for Lyudmila to be airlifted to a clinic in Bad Homburg, Germany, for specialist treatment, and covered at least part of the costs. Walter confirmed that the bank had paid for Lyudmila’s medical treatment, which he called ‘completely self-evident from a humane point of view’. Such assistance does not appear to have violated any Russian laws. Putin could not have afforded the treatment his wife needed, since salaries, even of highranking officials, were exceedingly low.
IN MID-APRIL 1996 Anatoly Sobchak asked Putin to supervise security arrangements for a visit by President Bill Clinton, who was stopping over in St Petersburg on his way to one of his regular meetings with Boris Yeltsin in Moscow. Air Force One touched down just after 10 p.m. and, despite the late hour, Anatoly Sobchak took him on a tour of the Tsar’s Village at Pushkin, including Catherine the Great’s palace. It was well past midnight before Clinton turned in at the Grand Europa Hotel.
In the morning the US President attended a memorial service at the Piskarevsky Memorial Cemetery, where nearly half a million victims of the Nazi siege were buried. He was then driven to the Hermitage to see Russia’s art treasures. Clinton was due to meet a group of students at the museum, but Putin was taking no chances: much to the President’s annoyance, he cancelled the meeting on security grounds.
Sirens blaring, Clinton’s motorcade roared from the Hermitage to a restaurant where Clinton was due to dine with Sobchak and other dignitaries. On the way, Clinton wanted to pull over so he could shake hands with people lining the streets, but was told that the schedule didn’t permit it, or that ‘our Russian security friends’ had vetoed it. Lunch was held in a windowless basement to minimise the chances of assassination. Strobe Talbott, Clinton’s Russia expert who was travelling with him, says: ‘The US consul-general in St. Petersburg, John Evans, saw considerable evidence that Putin was active behind the scenes, particularly in supervising the security for the visiting dignitary’. So much so that on the flight to Moscow Clinton moaned he’d been ‘kept in a goddamn cocoon’ throughout his stay in St. Petersburg.
Sobchak had advanced the date of the mayoral poll in St Petersburg by a month to 19 May in order to wrong-foot the opposition, hardly a democratic move. His challenger was one of his own deputies, Vladimir Yakovlev, and Putin warned the mayor that it would be a hard campaign. Perhaps influenced by Putin’s earlier failure, Sobchak appointed his own wife Lyudmila as campaign manager, despite a warning from Putin that the campaign office might refuse to work with her.
Yakovlev’s team fought a dirty campaign, orchestrated by Korzhakov and a cabal of Moscow power brokers, who viewed Sobchak as a possible future rival to Boris Yeltsin. Moreover, Naina Yeltsina, the president’s wife, was godmother to one of Yakovlev’s grandchildren. And yet Yeltsin, in the third volume of his memoirs, Midnight Diaries, expresses horror that Korzhakov and his fellow conspirators had supported ‘the gubernatorial candidate Yakovlev’ with substantial funds.
YAKOVLEV GOT HIS big television break when Oleg Poptsov sent journalist Andrey Karaulov to St Petersburg to make a short programme about him. Poptsov had been persuaded to do this by Korzhakov, and although Yakovlev put in a poor performance, the television exposure helped him to become known to a wider public.
Sobchak’s opponents pointed to the failed stockholding in the city’s gambling operations and accused him of corruption by allegedly colluding with the casino operators. Today Putin finds that allegation almost comical, although at the time he was so worried about the tone of the campaign that he slept with a gun beside his pillow. ‘Everything we did was so absolutely transparent,’ he says. ‘You can only argue about whether our actions were cor rect from an economic point of view. Obviously, the scheme was ineffective and we didn’t achieve what we had planned.’
The prevailing air of sleaze did not augur well for Sobchak. His slim chances of remaining leader of St Petersburg (the office was changing from Mayor to Governor) were made even slimmer when thousands of leaflets detailing his alleged misdeeds were dropped on the city from a plane. No one could prove who had organised the airdrop, but Putin pointed the finger at ‘dark forces’ in Moscow, with General Korzhakov and Oleg Soskovets the chief suspects. Yakovlev’s platform was that Sobchak had patronised the arts with city money for his own selfaggrandisement and had spent much of his time getting involved in federal politics, instead of dealing with the serious day-to-day problems of ordinary St Petersburg citizens. Behind the window-dressing, he said, the city was actually going downhill.
At the last possible moment, Putin and the third mayoral deputy, Alexei Kudrin, were placed in charge of Sobchak’s campaign. ‘We tried to jump into the fray but it was hopeless,’ he says. On television Putin described Yakovlev as ‘a Judas’ for standing against his former benefactor. ‘The word seemed fit and I used it,’ he adds. The opposition fired back with a broadside of allegations against Putin himself, which were so wide of the mark that he sued Alexander Belayev, chairman of the city legislature, for libel. Belayev admits he lifted allegations that Putin had bought houses abroad from published reports and had no concrete information of his own from any independent source.
Sobchak lost the election by a mere two per cent of the vote and Yakovlev moved into his office at Smolny. Putin turned down an offer to remain as first deputy mayor in the new administration. He came up with the quote of the campaign when he said: ‘I would rather be hanged for loyalty than rewarded for treason’ – words which truly summed up his ethic.
A few weeks before the presidential elections in June/July, Boris Yeltsin announced plans for a ceasefire in Chechnya, but the conflict had not been resolved and in reality he seemed powerless. He had suffered two more heart attacks the previous year and alternated between drinking bouts and recovering from one or other of a plethora of health problems. Oh, how Russians yearned for a younger, fitter president!
Yet, against the odds, Yeltsin performed an astonishing Lazarus act to inflict a sensational reversal on the Communists. After the first round on 16 June, he led the poll with 35 per cent of the vote to Zyuganov’s 32, with General Alexander Lebed, a gravel-voiced former paratrooper, in third place on 15 per cent. Yeltsin had pulled off what William Safire described in the New York Times as ‘a shturmovshchina’, a work project rushed to produce early results at the cost of its quality.
Three days later Anatoly Chubais’ closest lieutenant Arkady Evstafiev and the advertising mogul Sergei Lisovsky were both arrested by General Korzhakov’s agents as they were leaving one of the Kremlin buildings car rying a box filled with $500,000 in cash. Lisovsky ran a talent agency, Media International, which was coordinating campaign performances for Yeltsin, and the money was clearly intended for that purpose, but Korzhakov was convinced that Chubais’ people were simply embezzling the money.
Chubais was at the Logovaz Club with Boris Berezovsky and Goose Gusinsky. When he heard of the arrests, Berezovsky summoned Tatyana Dyachenko and Valentin Yumashev – now known jointly as ‘Tanya-Valya’ – the most effective team in dealing with the unpredictable President. They arrived at the club just after midnight. Shortly afterwards, Berezovsky’s bodyguards reported that snipers had taken up positions on the rooftops, while other forces had surrounded the building. Berezovsky went into hysterics, but Chubais remained cool and collected. The presence of Tanya-Valya ensured that the clubhouse would not be attacked; but just in case, Chubais phoned Mikhail Barsukov, the FSB director, at his home and warned him: ‘If a single hair falls from their heads, you are finished!’
Yeltsin was asleep when Tatyana phoned him. ‘Papa, you have to watch the news,’ she said, ‘something important is happening.’ By then, Evgeny Kiselev, the top announcer on Gusinsky’s NTV network, was on his way to the newsroom and Berezovsky had called General Lebed, who agreed to make a statement on air. At 2 a.m. Kiselev informed startled viewers that a coup d’état was taking place in Moscow in an attempt to destabilise the government and induce a state of emergency. As proof he revealed that two of Yeltsin’s campaign workers had been arrested by secret service agents. Then General Lebed came on the screen and declared that any attempted coup ‘would be crushed mercilessly’. The report was taped and repeated 15 minutes later on Berezovsky’s ORT network.
Yeltsin watched the programme with mounting fury and confusion. He was confused because he simply had no idea how to handle the situation; after all, the two adversaries (Chubais and Korzhakov) were supposed to be his men. Fury because this was dangerously close to the election. He is reputed to have made one phone call, presumably to Korzhakov, and then retired to his bed. At 4 a.m. Arkady Evstafiev and Sergei Lisovsky were released from custody. Later that morning, Chubais was summoned to the President’s office. ‘I will demand that he fire Korzhakov and Soskovets,’ he told Berezovsky. ‘Barsukov should go too,’ Berezovsky advised, according to his confidant Alex Goldfarb. ‘If one of them stays, sooner or later it will start all over again.’ To ensure that Yeltsin did not change his mind, Berezovsky stationed a TV crew outside the Kremlin.
At 9 a.m. Yeltsin fired Korzhakov, Barsukov and Soskovets in a nationally televised broadcast. His decisive action did wonders for his standing in the polls. With his former rival General Lebed now enthusiastically endorsing his re-election, he emerged victorious* in the second round on 3 July, with an impressive 54 per cent of the vote, compared to Zyuganov’s 40 per cent. Berezovsky’s brilliant handling of ‘the coup that never was’ placed him even closer to the centre of the Family.
Putin had worked on Yeltsin’s campaign in St Petersburg, but he was marking time at Smolny while looking around for a full-time job when a third misfortune struck his family like a bolt from the blue. He had no income, but had managed to accumulate savings of $5,000, which he kept in a briefcase at the dacha he had been building for six years, mostly with his own hands, 100 kilometres out side St Petersburg. The Putins had lived there for about six weeks, sewing curtains, cleaning up the building debris and arranging the furniture, when in August 1996 they invited Marina and her husband and daughter to spend the day with them. The visitors arrived late and as evening approached Lyudmila, who had only just recovered from her physical injuries, suggested they stay the night.
Putin fired up the brand new banya on the first floor of the brickand-wood building, and he and Marina’s husband had a sauna and then went for a swim in a nearby river. They were relaxing in the lounge next to the sauna when they heard a crack and saw smoke and flames shoot out of the wooden banya. Putin says he shouted ‘in my loudest and most commanding voice’ for everybody to get out of the house. The sauna cabin was ablaze.
Katya was having a meal in the kitchen and, possibly conditioned by the car crash, dropped her spoon on the table and ran out of the house without a second thought. Putin dashed up to the second floor where he found Masha cowering in fear. He took the little girl by the hand and led her out on to the balcony. Then he tore the sheets off the bed, knotted them together, tied them to the balcony railing and told Masha to climb down, but she was paralysed with fear. Putin admits he threatened her. ‘I’m going to pick you up and throw you off here like a puppy,’ he said. ‘Don’t you understand that the house is about to burn down?’ His words made no difference, so he picked up his daughter and dropped her down to Lyudmila and Marina, who caught her in their arms.
Putin suddenly remembered the cash in his briefcase. He dived back into the room and started searching for it. By this time smoke was billowing up the stairs and blotting out the light. He groped around blindly with his hand, but couldn’t locate the case. The heat became too intense to remain any longer, so he retreated on to the balcony and, as flames licked around him, clambered over the railing, grabbing the sheets as he descended. The future president was stark naked and as he tried to wrap a sheet around himself, it caught the wind like a sail. Neighbours who had gathered in the garden watched his descent with great interest.
ON A VISIT to the Siberian republic of Tuva, Putin took off his valuable Patek Phillipe Perpetual Calendar watch and gave it to the small son of a local shepherd.
The house was blazing fiercely when the fire brigade finally arrived. Their tender quickly ran out of water and although the dacha was situated beside a lake, their hose wasn’t long enough to reach it. The dacha burned to the ground, destroying almost all of the Putins’ possessions, including Masha and Katya’s toys and Barbie dolls. Lyudmila was philosophical. Having been close to death three years earlier, she real ised that houses, money and other material things were not what mattered. The only thing that Putin retrieved from the ashes was his little aluminium cross, which had been around his neck when he was baptised at the Cathedral of the Transfiguration, and which he had taken to Israel on a 1993 visit to have it blessed at the Holy Sepulchre.
Fire inspectors concluded that the builders hadn’t installed the sauna stove correctly and that burning coals had fallen onto the wooden floor. As the builders were culpable, they completely rebuilt the dacha for the Putins – minus the sauna.
While the cottage was being restored the family lived in their apartment on Vasilievsky Island and Putin entered the nearby St Petersburg Mining Institute to complete his 218-page dissertation on ‘The Strategic Planning of Regional Resources during the Formation of a Market Economy’, in which he argued that the state should control the exploitation of raw materials irrespective of the deposits’ ownership. But by the time the thesis was accepted on 27 June 1997, making him a Candi date of Economic Sciences, Putin was already working inside the Kremlin.
THE GEORGIAN TYCOON Badri Patarkatsishvili had moved to Moscow in 1993 to run Boris Berezovsky’s lucrative Logovaz car dealership while hunting for even more profitable business. Patarkatsishvili subsequently claimed that it was he who found Putin a job on Yeltsin’s staff through his friend Pavel Borodin, but this was not the case; indeed, by this point Putin had no need of any help from Patarkatsishvili, for Borodin was already an ally.
After Yakovlev’s victory, Putin went off to Moscow. Yakovlev, knowing Putin’s qualities as a businessman, had implored him to stay, but Putin rejected the offer. In the capital he met Nikolai Yegorov, head of the President’s administration, who offered him a job as one of his deputies. Putin accepted but, before his appointment could be confirmed, Yegorov lost his job. His replacement, Anatoly Chubais, did not like the idea of a man with a KGB past appearing at his side, particularly one who had a reputation as a ‘hitman’ for Sobchak.
Next Putin met Pavel Borodin, Yeltsin’s administration manager. Realising what was going on and ‘mindful of what a caring and hardworking person he had proved to be in St. Petersburg,’ Borodin recalls, ‘I said: “Vladimir Vladimirovich, how would you like to work for me as deputy for international economic relations?”’ Although he needed a job, Putin’s reply was cautiously non-committal: ‘Well I’m not really the sort of man who would be any good at such work, I would prefer to work in the President’s administration…’
‘So I went to Boris Yeltsin,’ explains Borodin, ‘and I asked him: “Can you take this lad, who’s a really great guy, into the administration?” At once Yeltsin replied: “Yes!” He rang the head of the Presidential office and arranged for an order to be drawn up. But the next day Yeltsin was ill and remained so for two weeks, while his head of administration Chubais came into the picture. Chubais was an important man to Yeltsin, having pushed through Potanin’s infamous loans-for-shares scheme, which was to secure his re-election as president that year.
‘Seeing the papers with Putin’s name on them he simply tore them up before my eyes,’ continues Borodin. ‘Then I again asked Putin to become my deputy, and took the papers to Yeltsin myself for signature.’ A deal was struck.
Initially Lyudmila Putin was reluctant to leave St Petersburg, but she was delighted when she saw the six-room state dacha in the Arkhangelsky district to the west of the capital which went with her husband’s new job; in any case, she was to come to love ‘noisy Moscow’ and its crowded streets.
IN SEPTEMBER 1996 Yeltsin approved the second series of auctions for the 12 state-owned enterprises which had been offered to the oligarchs as collateral for their loans. The inherent crookedness of the scheme meant that the ‘reformers’, who had tried to build Western-style capitalism, had ended up selling the family silver to a small group of slick operators in return for peanuts.
Anatoly Chubais admits that his privatisation schemes were reckless. In four years, he flogged tens of thousands of enterprises to the oligarchs and their set, and shifted more than half of Russia’s workforce into the private sector. ‘Every enterprise ripped out of the state and transferred to the hands of a private owner was a way of destroying Communism in Russia,’ he told David Hoffman. ‘And at that stage, it didn’t matter at all to whom these enterprises went, who was getting the property. It was absolutely unimportant whether that person was ready for it.’
Chubais and four close colleagues were thrown out of office in 1997 for accepting a total of $100,000 as publisher’s advances – for a book that had not been written – from a firm controlled by Potanin’s Onexim Bank group. The amount of money was minuscule by Russian standards, but by accepting it they had abandoned the moral high ground and looked not unlike the controversial characters they had enriched.
Khodorkovsky (in the view of many) rapidly came to represent the unacceptable face of capitalism. His arrogant methods in tightening his grip on Yukos became legendary among foreigners. Bob Dudley, a Mississippi-born oilman who later headed BP’s abrasive partnership with Mikhail Fridman’s TNK, found himself in a battle royal with Khodorkovsky after he gained control of Yukos.
Dudley first came to Moscow in 1994 as the executive in charge of developing the Amoco Corporation’s upstream and downstream businesses. It wasn’t long before he learned about gangster capitalism first-hand. Back in 1993 Amoco had won a tender to develop the massive Priobskoye field in Western Siberia in a 50/50 joint venture with Yukos. But after four years – by which time Amoco had invested $300 million in the desolate stretch of marsh and Arctic forest, which was about to produce its first oil – Yukos’ new owner Khodorkovsky refused to recognise the partnership and asserted his right to develop the field independently.
Bob Dudley met with the young billionaire to clear things up, and produced Amoco’s signed contract. Khodorkovsky smirked and shook his head. Amoco would have to renegotiate the deal with him, he said, and for a smaller percentage of the field. Negotiations broke down and Bob Dudley was pulled out of Russia. After a brief revival of the talks, Amoco officially abandoned Priobskoye in August 1998. As we shall see, Yukos’ foreign shareholders were treated in an even more cavalier manner.