Blaming Russia for a lack of democracy is similar to complaining about not being able to buy alcohol in Saudi Arabia.
—JAKUB KOREJBA
In January 1990 when Putin returned home, the USSR was still the USSR, Leningrad was still Leningrad, and he was still KGB. None of that would last another two years.
Putin now became a member of the “active reserves,” meaning KGB officers who “were put in place as active agents in business, media and the public sector.… The status of an agent on active reserve is considered a state secret.” Putin returned to his alma mater, a choice that would prove smart and useful. As he says: “I was happy to go ‘undercover’ at Leningrad State University. I wanted to write my doctoral dissertation, check out the university, and perhaps get a job there. So, in 1990 I became assistant to the president of the university, responsible for international liaisons.”
Landing that position was a good solution for Putin. It allowed him to work on his dissertation, some fifteen pages of which would later prove to be plagiarized from an American textbook. It gave him a foothold in viciously fast-shifting Leningrad, where gang wars were fought in the streets, sometimes with the Kalashnikovs and RPGs filched from the collapsing military and sold on the black market, and where ration cards for meat, eggs, butter, and other commodities would soon be introduced, creating an urgent air of wartime poverty and shortage. Most important, the job gave him a piece in the game, one that in time could be moved to a better position.
Putin, like everyone else, was winging it. The system was in a state of slow-motion free fall; the only questions were when it would land and with how much bloodshed. Putin had been offered a KGB post in Moscow, but turned it down for reasons of sentiment and practicality. He wanted to be near his parents, who were getting old, and also because he knew “there was no future to the system. The country didn’t have a future. And it would have been very difficult to sit inside the system and wait for it all to collapse around me.”
Life was becoming increasingly meaningless for Soviet people, Putin included. Putin’s wife, Lyudmila, could see that he “had lost touch with his life’s real purpose.” Every day brought new revelations of crimes committed in the name of Communism, and the system could barely deliver basic goods and services. A grocery store might contain nothing but stale macaroni and large jars of homemade-looking apple juice. Russians started hoarding matches and salt as they always do when crisis approaches. Suddenly, there was a real threat of hunger.
The year before Putin had returned to the USSR, the country had come to a standstill, stunned by the spectacle of its first free elections for people’s deputies to parliament. Andrei Sakharov was elected a deputy only three years after Gorbachev released him from internal exile in the closed city of Gorky. Another deputy of note was the dashing, charismatic law professor Anatoly Sobchak, who would work closely with Sakharov and future Russian president Boris Yeltsin on such previously unthinkable projects as investigating, and condemning, the use of military force against civilian demonstrators.
In May 1990 Sobchak became the chairman of the Leningrad City Council, essentially the mayor, a title that would become official the following year. It was clear to him that Leningrad would soon go hungry without some foreign trade. That meant he needed a motivated, effective person, one with a mastery of a foreign language and experience of living abroad, to advise him on foreign relations. Leningrad State University, where Sobchak taught law, had just such a person heading its own Foreign Relations Department: Vladimir Putin, who had attended Sobchak’s lectures in the early seventies when he was a student, though there was no personal relationship at the time.
As a rule in Russia things move with either glacial slowness or lightning speed, and the latter predominated in those final months of the Soviet Union. Sobchak had Putin in for an interview and made up his mind in a matter of minutes, telling him he should start the following Monday. Putin was more than happy to accept the offer, but felt obliged to reveal that he was a KGB staff officer. After a long moment’s thought, Sobchak said: “Screw it!”
This is Putin’s version of events. There are others. Some would have it that Putin was dispatched there as his next assignment as an officer in the active reserves. Or, as Masha Gessen thought, Sobchak himself might have chosen Putin because he “knew that it was wiser to pick your KGB handler yourself than to have one picked for you.”
In any case, Putin took the position and began working in Smolny, an elegant building that had been a school for young ladies of the nobility before the revolution and Lenin’s headquarters during the revolution itself. He chose a picture of Peter the Great, emperor and reformer, to decorate his office.
Putin, however, remained worried that his KGB connections could be used against him or against Sobchak. The only foolproof means against being outed was to out yourself.
Putin contacted the well-known filmmaker Igor Shadkhan, telling him: “Igor, I want to speak openly about my professional past so that it stops being a secret and so that no one can blackmail me with it.” Shadkhan had just returned from grueling fieldwork filming in the Gulags of the far north and was more interested in resting than in working, but apparently Putin’s ability to charm older men worked again, and it wasn’t long before the interview was broadcast on Leningrad TV.
Looking beefy and deeply tired with dark, raccoonish circles under his eyes, confident but unpolished, Putin not only revealed the crucial information about himself, but also demonstrated that he had mastered the new vocabulary of the time. He called Communism “a beautiful but dangerous fairy tale” and said of the USSR: “As soon as the barbed wire was removed, the country began falling apart.”
Sobchak did not regret his choice of Putin. “He was utterly professional. He worked very well with others, knew how to talk to them. He was decisive.” Putin was on his way up.
It had been a smart choice to turn down Moscow for Leningrad. Putin knew how to operate there and was a Leningrader by temperament—aloof, cerebral, acerbic.
In a referendum in the spring of 1991 the people of Leningrad chose to restore the city’s original name, St. Petersburg. To lead that newly named city into a very uncertain future they elected Anatoly Sobchak as mayor. As a sign that their political careers were now linked and in tandem, Sobchak immediately promoted Putin from adviser on international relations to head of that department. He went from an intellectual resource to an active player.
But Putin was not a month on the job before he and his country faced a crisis of the first order. In August 1991 the lurch and drift of the Soviet Union reached critical mass. A small group of high officials—among them the chairman of the KGB, the prime minister, the interior minister, and the vice president—attempted a putsch, placing Gorbachev under house arrest in the south of the country, where he was vacationing. It was the USSR’s last attempt to save itself and it lasted barely three days. The whole affair was a very Russian mix of the sublime, the ridiculous, and the tragic.
The iconic moment for Russia came when Boris Yeltsin stood on top of a tank that was threatening the White House, as the Russian parliament building in Moscow was known. He called on the army and the people to stand up for freedom and to defy the putschists. Moscow’s patriotic tarts lowered themselves down the tank turrets to distract any soldiers who weren’t yet on the side of the people and freedom.
The mood of Moscow was one of elation, bordering on exaltation. Referring to the three young men, one of them Jewish, who had lost their lives in the struggle for Moscow, one Russian woman said to me in conversation: “There can never be anti-Semitism in Russia again now that a Jew has given his life for Russia’s freedom!”
For Putin these were not days of exaltation but, he says, ones of agonized choice and self-definition. He was torn. The goal of the coup—“preserving the Soviet Union from collapse—was noble.” That, however, was not enough. “As soon as the coup began, I immediately decided whose side I was on. I knew for sure that I would never follow the coup-plotters’ orders. I would never be on their side. I knew perfectly well that my behavior could be considered a crime of office. That’s why, on August 20, I wrote a second statement resigning from the KGB.… All the ideals, all the goals that I had had when I went to work for the KGB, collapsed.”
The bond with Sobchak grew tighter in those tense days when people in Russia were making the choice that would decide their own future and the country’s. In St. Petersburg, Sobchak played a role similar to Yeltsin’s. “Speaking from the steps of the Winter Palace, he gave heart to the thousands who did not want to see the clock turned back,” wrote the Economist in his obituary. “Deploying weapons no more violent than his personality and his command of language, he persuaded the commander of the armored troops moving on the city to withdraw.”
But in the midst of trauma there was a certain grotesque levity. “Once I saw the faces of the coup-plotters on TV,” says Putin, “I knew right away that it was all over.” At the junta’s one and only press conference, the “leader,” drab Soviet vice president Gennady Yanayev, kept sneezing into a handkerchief. Dictators should not make their debut blowing their noses.
In an iconoclastic rampage Russians began tearing down the images of Soviet rule. The immense statue of Felix Dzerzhinsky, founder of the secret police, was torn from its pedestal in front of KGB headquarters on Lubyanka Square. Though heavy, it proved hollow. Some, but not all, of the statues of Lenin were toppled. One of Stalin was struck in the face with a sledgehammer. All of them were taken to a park near an art museum, the New Tretyakov Gallery, and strewn on the grass in a random fury.
No one had any idea what tomorrow would bring, though it was clear the USSR’s days were numbered. What would the next Russia look like? Whose voices would be heard?
Wandering on the grass where the statues were strewn I saw an older man in glasses and a sweater-vest who looked like a retired shop teacher. When he opened his mouth to rant he revealed steel-plated teeth, common in the USSR: “They were nearly all kikes, the Communists. Lenin was part kike on his mother’s side and the rest of him was Asiatic. And the capitalists are all kikes too, and now they’re trying to finish up what the Communists didn’t get around to doing. The kikes want the death of Russia!”
But there were other voices, equally passionate and brighter with intelligent hope. As winter and the fear of hunger crept into the cities, a TV producer I knew, a great battleship of a woman who issued opinions like salvos, said: “We are so happy, you can’t imagine. We did something wonderful. We stood up for freedom. And now we are free. Yes, maybe there will be starvation this winter but at least we’ll be starving as free people. We’ve starved before but we’ve never been free before.”
* * *
Other stars besides Putin’s were on the rise and moving with greater speed than his, though his, of course, would in time eclipse them all. Like him they came out of nowhere, a good sign, proof that Russia’s long-suppressed ambitions and creative force had been loosed. For people alert to the moment and its possibilities there were three questions: how best to dismantle the old system; what to build in its place; how to get rich in the process.
Rules, law, and the rule of law were never very much respected anyway in Russia, which had “a décor of laws,” as the dissident writer Andrei Amalrik put it. Proverbs spoke of the law as a cart that went where the driver wanted. In the transition between systems there were fewer rules and guidelines than ever. Clear-eyed ambitious men entered that vacuum with great energy. Everyone had stolen from the state when it was a going concern, and now that it had collapsed there was even less reason not to loot the ruins.
Others were more intent on dismantling the system than on exploiting the transition. One of those was Anatoly Chubais, who was born in 1955 and was thirty-six when the USSR fell. His father was a Soviet army colonel, a World War II vet, and a believer in Marxism who lectured on it to the troops. A lanky redhead, Chubais was drawn to economics, a subject that had been his mother’s major, but she stayed home with the children and never practiced her profession. Chubais, who would quickly become known as “the most hated man in Russia” for the pain he inflicted on the country during the shock-therapy phase, did not himself come swiftly to his new worldview. In the beginning he was an economics Ph.D. student in Leningrad trying to figure out why command-and-control economies were always economies of shortage. He gradually came to the conclusion that only prices set by the open market could provide realistic and reliable information as to what goods and services were needed. But, once convinced, he had something of his father’s Soviet steel in his convictions.
He was a natural for Mayor Sobchak’s team and quickly became one of its top economic advisers, dealing with the attempt to create a Free Economic Zone in Leningrad. That was in 1990. By the end of 1991, Chubais had moved to the center of power, Moscow, and the highest echelons of President Yeltsin’s government. He was appointed chairman of the Committee for the Management of State Property, which was in charge of privatizing state property. Chubais became the “architect of the largest transfer in history of state-owned assets to private hands,” as David Hoffman put it in The Oligarchs, by now a classic text.
No one knew what they were doing, for two very good reasons. First, the people in charge of dismantling the Russian economy were mostly men in their early thirties who, apart from receiving an education, had not done very much at all, certainly nothing on the order of running large enterprises. Second, what they were doing was historically unprecedented. It also contradicted the Marxism on which they had all been reared and that held that Communism was the stage of development that came after capitalism, not vice versa. And so turning Communism into capitalism was as absurdly impossible as trying to turn fish chowder back into fish.
But Chubais and his ilk had strongly held attitudes, goals, and assumptions. The attitude was a visceral hatred and contempt for the system. “I hate the Soviet system. There is little in life I have hated like the Soviet system,” said Chubais. The goal was the absolute destruction of the Soviet economy and thus the Soviet state by putting the USSR’s assets in private hands. The assumption was that the laws of the market would sort things out. The inefficient would die away, the efficient would thrive. Private ownership and personal freedom were two aspects of the same thing. Russia would leap into both democracy and capitalism all at once.
The process would be modeled on the Polish experiment with “shock therapy.” The first step was to free up prices so that they would reflect market realities and not the decisions of bureaucrats in the planning commission. As the Russians quipped bitterly, they got the shock but not the therapy.
Between 1990 and 1994 prices increased by well over 2,000 percent. By the hideous magic of inflation, $100,000 turned into $400. The stores were “pristinely empty,” as Egor Gaidar, the other main leader of economic reform, put it. The farmers weren’t delivering grain. “Why should they? To get some piece of paper that, out of habit, people still called money?”
Huge trucks appeared in downtown Moscow bearing potatoes from the countryside. People bought as much as they could, staggering away bent parallel to the ground by immense burlap bags. In apartments potatoes were everywhere—in cabinets, in closets, under beds.
Everything was for sale. Old women stood in the cold holding up a single knit shawl, like human stores. For people raised on socialist ideals, which considered property to be theft, there was a particular shame in the act of selling, not to mention the fact that these goods were often family heirlooms or simply all people had left in the world. Those with nothing to sell simply knelt on the freezing sidewalks and offered up their own pain and self-abasement. The younger women chose other strategies, equally desperate. Flocks of prostitutes chased every car that slowed in the downtowns of Russian cities. Many were nurses and teachers who could no longer feed their families on their meager salaries, if they were even paid.
In the street markets and flea markets treasures could be had for a song—amber necklaces, icons, rugs from Asia. You could buy Red Army uniforms from fur hats to high boots, medals for valor included. The currency was meaningless, life was meaningless, there was a whiff of Weimar in the air. Groups favoring black clothing and the hatred of Jews (and Masons) emerged quite naturally from that context of empty air and violent streets.
My reportage from the first post-Soviet winter of 1992 captures something of that time and place:
In Sophia, one of Moscow’s better restaurants, you can feast on black caviar, sturgeon, and beef Stroganoff with vodka and coffee galore, tip extravagantly and still get away for under a dollar. The waitress apologizes. For reasons she can’t begin to understand, there is no Russian vodka, only Smirnoff’s, from America. Her teeth are chattering. The heat has gone off in the restaurant. All the waitresses and customers are shivering, even those who are still wearing their fur hats. And so at least there is practically no shock when we leave the restaurant and see through the whirling snow the statue of the poet Vladimir Mayakovsky, who blew out his brains in 1930, disappointed by love and revolution.
But for most that winter, shivering in a restaurant would have been an unimaginable luxury:
The schools now serve as distribution points for the food being funneled in from America. The pilferage rate is assumed to be high, though somewhat less than in other places. Schoolchildren are being issued milk and tinned meat—leftover rations from Operation Desert Storm, crumbs from the table of the conqueror. It is a gift that elicits both gratitude and a sense of humiliation among Russians. As parents they are glad that their children will have milk to drink, for milk is simply unavailable in Moscow. It might be because the farmers had to slaughter their cattle for lack of grain to feed them. Or there may be thousands upon thousands of gallons turning sour in idle freight trains somewhere. Nobody knows. Nobody ever really knows anything here.
Grateful as parents, they are mortified as Russians. They feel themselves part of a laughable failure—the idiotic dream of communism, which took tens of millions of lives and in return gave them two-hour bread lines in the icy cold.
Meanwhile, even at this early stage before the large state enterprises began to be auctioned for a song to insiders in sweetheart deals, there were still plenty of people fast on their feet who saw ways to make big money either from the falling value of the ruble—borrow cheap, repay even cheaper—or by buying up the vouchers that were issued in 1992 to every citizen in an effort to make Soviet serfs into shareholders. Factory managers and the party elite had already concocted schemes for gaining control over state property.
But a good percentage of the population simply couldn’t cope with the new reality. The environment had shifted radically and they could not adapt. People demonstrated in the streets with signs reading: “Put the redhead behind bars.” They meant Chubais.
There was a violent nostalgia for the Soviet past. For the democracy of poverty, cheap goods, brutal certainties. The extreme tensions in Russian society were expressed in the battle waged by the nationalists and Communists in parliament against the presidency of Boris Yeltsin. In mid-1993 the parliament declared itself the supreme power in the country, which now seemed on the verge on civil war. In response Yeltsin suspended parliament to protect, as he put it, “Russia and the whole world against the catastrophic consequences of the disintegration of the Russian state, against anarchy recurring in a country which has an enormous arsenal of nuclear weapons.”
The rebellious deputies seized the White House. Well armed—five hundred submachine guns, six machine guns, two hundred pistols—the rebels’ numbers shifting from 400 to 800. Outside, the building was ringed by supporters bearing the black-and-yellow flags of the nationalists and the red banners of Communism along with signs: “Revive the Communist Party of Russia,” “Let’s reveal the ethnicity of all those who were in the mass media!” (meaning Jews), “Blacks out of Moscow!” (meaning people from the Caucasus mountain region, often referred to as “blacks” or “black asses”).
The sporadic violence came to a head on October 4, 1993, when Yeltsin ordered an attack. There was a fifteen-minute tank barrage followed by a mop-up action inside the building in which twenty soldiers and forty rebels were killed.
The ironies were heavy-handed even by Russian standards. Some two years before, Yeltsin had stood atop a tank in front of that same White House to save Russia from a putsch, and now he had ordered tanks to fire on parliament. The blackened front of that white building became a sort of tragic icon of its own.
* * *
In winter 1992 St. Petersburg was in a panic over a possible famine. The city council put Marina Salye in charge of food supplies, and it was she who introduced rationing and ration cards. Every resident of the city had the right to three pounds of meat per month, two pounds of processed meats, ten eggs, one pound of butter, half a pound of vegetable oil, one pound of flour, and two pounds of grain or dry pasta—if he or she could find any.
Salye, a geologist by profession, had spent much of her adult life far from the tense, polluted cities. Geology was a romantic profession that allowed for travel over all the vast yet still somehow claustrophobic territory of the USSR. Days of hard work in nature, nights of campfires, wine, guitars. Nevertheless, Salye proved totally adept at politics and quickly emerged as one of the leaders of the democratic movement in Leningrad. “With a cigarette dangling from her lips, she could lead a crowd up and down Nevsky, stopping traffic,” as one of her political opponents described her.
Her attempt to feed her starving city would prove the misfortune of her life. She could not help but notice that an agreement to ship Russian raw materials—gas, oil, timber, metals—in exchange for food to a foreign concern had gone totally awry. The nearly $100 million of raw materials had indeed been shipped, but not a ruble’s worth of food had arrived. Looking into the matter further, Salye discovered documents indicating that Vladimir Putin, as head of the Foreign Relations Committee, had entered into contracts with legally dubious companies. Working with a colleague, Yuri Gladkov, she collected more evidence and presented it to the city council, which concluded that the money had been stolen and recommended to Mayor Sobchak that Putin be dismissed.
Sobchak’s response was to dissolve the city council. He wasn’t about to impede Putin, whose achievements were obvious. “Judge his success—he was in charge of foreign investment, and by 1993 we had 6,000 joint ventures, half the total in Russia.” Putin helped attract American firms like Coca-Cola, Wrigley, and Gillette. And foreigners enjoyed working with Putin. Graham Humes, an American who set up a charity in St. Petersburg, said of him: “I found him great to deal with compared with these other Russian bureaucrats who all wanted to fleece you. He was very intense; he controls everything in the room. You felt he wanted to be feared but didn’t want to give you cause to fear him.”
Putin succeeded in completing a project to lay fiber-optic cable to give St. Petersburg world-class international phone service. So what if $100 million disappeared? A thousand tons of gold also disappeared as the USSR was collapsing. Later on, Russia’s chief comptroller at the time called the case “not radically more serious than what was going on in the rest of Russia.… It was just a typical case at the time.” You hardly threw away one of your most gifted and dogged assistants over such a measly sum, such a typical case.
Like all important moments in Putin’s life, his role in the missing hundred million is blurred with multiple ambiguities. Only three things are certain—the money disappeared, the food never arrived, and Putin had a hand in the paperwork. He does not seem to have benefited personally from the deal. His wife says that they returned from the GDR with a twenty-year-old washing machine that an East German friend had given them and which lasted them another five years. If Putin had been siphoning off some of the money from the food deal, he presumably would have found enough to buy his wife a new washer. The American Humes said he didn’t want to “fleece you.” Boris Berezovsky, the oligarch and kingmaker who would figure greatly in Putin’s destiny (as would Putin in his), describes meeting Putin in the early nineties: “And what was absolutely surprising for me was that he was the first one who didn’t ask for a bribe.”
If he didn’t get any money out of it, why would he have risked his high position in the new government?
It’s possible that Putin was simply chumped—in Russia, swindling is an art form. Inexperienced in the ways of commerce, Putin may have unwittingly helped abet a scam. In the chaos of those years anything was possible. More likely, however, is that Putin knew some people would line their pockets with the money and he wanted those people in his own pocket for later use. It was a time when sudden and immense fortunes could be made, but it was also a time when sudden and immense power could accrue to those alert to the utility of secrets and favors. Putin preferred power.
Marina Salye tried to raise the issue again when Putin was running for president in 2000. In her version of events, she was made to understand that any such effort would simply cost her her life. She disappeared into a tiny village in northwest Russia far from Moscow.
* * *
There were no good years for Russia in the nineties, but 1994 seems particularly bad.
Something had changed in Russia after fall 1993 when Yeltsin ordered the tanks to fire on parliament. The society became more violent, precipitate, unhinged. In June of 1994, the oligarch Boris Berezovsky climbed into the backseat of his Mercedes. His driver and bodyguard were in front. As they left the courtyard a remote-controlled bomb in a nearby parked Opel exploded with tremendous force, decapitating the driver, taking an eye from the bodyguard, injuring seven pedestrians, and shattering windows a block away. Boris Berezovsky stumbled from the wreckage, badly burned but able to walk away.
There had already been fifty-two bomb blasts in Moscow alone by that June. The use of lethal force had become a part of business as well as of politics.
In July the giant pyramid scheme known as MMM collapsed, leaving millions penniless. The 27 percent plunge in the ruble’s value on Black Tuesday, October 11, inflicted suffering on those who still had rubles left to lose. Two months later, on December 11, Russian troops were sent into Chechnya. To chaos, poverty, and desperation now war had been added.
After simmering for three years since Chechnya had declared its independence in 1991, hostilities broke out in late December between Russia and Chechnya, a war that would quickly prove “barbaric on both sides.” In the Kremlin’s eye oil-rich Chechnya was a lawless land with impudent aspirations to independence. But business mattered more than war.
To succeed in business in Russia during the 1990s three things were needed: capital, connections, and chutzpah. When Gorbachev tried to revive the economy, new, looser laws allowed for various cooperative-type enterprises, including financial ones that were essentially banks. Some people acquired capital by reselling goods bought abroad for fantastic profit. As one Russian exclaimed on selling a computer for 70,000 rubles: “It was my salary for forty-eight years!” Others dealt in cars, designer clothes, it almost didn’t matter, since everybody needed everything. It wasn’t that long ago that enterprises like these could have cost you prison time or, in some cases, death. Russians were well aware that the last time anything like this was attempted was Lenin’s New Economic Policy (NEP), which flourished for a few years before ending very badly. That this could happen again no one doubted. The Communists could come back into power—with a vengeance. The Red attempt to seize power in 1993 had been quashed by tanks firing at the White House, but there was an election coming in 1996 that at the least would be bitterly contested, a Communist defeat by no means a certainty.
It was an odd atmosphere that prevailed in those days. A mix of Klondike Gold Rush and Feast in Time of Plague, a sense that anything was possible, calamity included. Though Russian gangsters were making small fortunes via extortion, protection, drugs, and casinos, the great fortunes would end up in the hands of educated men like Boris Berezovsky, who held a Ph.D. in mathematics, and Mikhail Khodorkovsky, who, before he became Russia’s richest man and then its most famous prisoner, earned a degree in engineering. Though a few of the future oligarchs had street smarts, what they all had, and what made them all superrich, was knowing how to work the system. It really didn’t matter which system it was—the crumbling Soviet system, the system for transitioning to capitalism, or the new rudimentary capitalist system itself—as long as there was some sort of system they would find some way of gaming it.
The image of Berezovsky stumbling away from the smoking wreckage of his Mercedes is, in its way, an oligarch icon. It was a perfect example of Nietzsche’s “What does not kill us makes us stronger.” Only prison and death could stop those men in Russia who had dedicated their every waking moment to the acquisition of fabled wealth.
Berezovsky, born in 1946, an only child, a Jew, took Russian maximalism to the max. His applied-mathematics lab needed not only to flourish but to win the Nobel Prize. When he pursued wealth, only billions would do. Others said of him, “He uses every person to the maximum. That is his principle of life,” and he said of himself: “Everything I do, I do to an absolutely maximum degree.” If Berezovsky wanted to speak with you, he would wait on your doorstep for hours or follow you fully dressed into the shower at your athletic club. Short, dark-haired, dark-eyed, he vibrated with incessant nervous energy. If he ever had a moment’s peace in his life, he would not have had the slightest idea what to do with it. “He was in one place one minute. And in another the next. He had a million phone calls. A million places where he was to arrive. Another million places where he promised to arrive but never went,” recalled a colleague. He was insistent, infuriating, charming.
The USSR was officially based on so-called scientific socialism, and in the country’s waning days its rulers hoped science would save socialism. A great deal of hope, trust, and credence were placed in institutes and labs, like Berezovsky’s, which studied the mathematics of decision making. That plugged him into industry, specifically the auto industry, on a high level and allowed him to make a fortune by obtaining cars from the state with loans that soaring inflation allowed him to pay back with much cheaper rubles.
Berezovsky also wormed his way into the Kremlin by publishing Yeltsin’s ghostwritten memoirs in a deluxe edition that greatly pleased the “author,” who was even more pleased by the tremendous checks from the inflated, if not in some cases utterly bogus, foreign sales that Berezovsky routinely presented. Bribes disguised by vanity as royalties.
Now in the Kremlin’s inner circle, Berezovsky could put his capital to good use. He gained a controlling interest in the national airline, Aeroflot, and the television broadcast company ORT, which gave him access to the burgeoning advertising revenue; but more important, it gave him political power because Russians got their news and views from TV, as they do to this day.
His two daughters attended Cambridge. He had a new, glamorous trophy wife. He had attained both significant wealth and significant power. Nothing could stop him.
The post-Soviet Russian government may still have had enough nuclear power to destroy the planet, but it couldn’t pay its bills. Teachers, nurses, pensioners, weren’t being paid. Inflation was still sky-high. And there were presidential elections coming in 1996. Yeltsin could easily lose. Already there was a powerful nostalgia for Soviet stability, which the Communist Party promised to restore.
Yelstin was increasingly seen as a fool, a has-been, a drunk. Gorbachev had alienated Russians by his clampdown on vodka; Yeltsin had alienated them by his overreliance on it. At the final ceremony for the withdrawal of Russian troops from Germany in August 1994, Yeltsin grabbed the baton from the Berlin Police Orchestra leader’s hand and began vigorously conducting himself. Good for a laugh, but an uncomfortable one. His popularity rating was in the single digits and flirting with zero.
To win the upcoming election, Yeltsin needed money. A deal was worked out and given the rather innocuous name “Loans for Shares.” The oligarchs with cash would loan the government money; shares in state-owned industries would be held as collateral. It was clear to all that the government would never be able to pay back the loans. And when the time came to auction off those shares held as collateral, the people currently holding them made sure the auctions were rigged in their favor, though a few face-saving forms were observed. Still, if an airport had to be closed to prevent unwanted prospective bidders from arriving, that airport would be closed.
Chrystia Freeland, who covered those turbulent times as Moscow bureau chief for the Financial Times, called Loans for Shares a “Faustian bargain” because the young and still committed reformers like Chubais knew the sale of the immense state enterprises to a handful of rich men would put an end to the free-wheeling capitalism they dreamed of. Chubais and Yeltsin consistently said: “We do not need hundreds of millionaires, but millions of property owners.” But the choice was stark: either give the tycoons control of the economy or lose the election to the Communists. Chubais found an eschatological formulation: “Isn’t it clear that there is one and only one question facing Russsia today: will there be a second coming of communism—or not?” A Red scare in Russia of all places.
The Communists’ leader, a colorless apparatchik by the name of Gennady Zyuganov, had suddenly come to life and been the hit of the World Economic Forum in Davos in February 1996. He presented Western leaders and businessmen with an image of sober, serious dependability. To Chubais’s horror, those Western leaders danced attendance on Zyuganov: “The world’s most powerful businessmen, with world-famous names, who with their entire appearance demonstrated that they were seeking support of the future president of Russia, because it was clear to everyone that Zyuganov was going to be the future president of Russia.” At Davos, George Soros warned Boris Berezovsky that if Zyuganov was elected, as he certainly would be, Berezovsky would “hang from a lamppost” and advised him to leave Russia.
But nothing energized Berezovsky like a good crisis. He made peace with his enemy Vladimir Gusinsky, who owned the other major TV network. Now the airwaves that had throbbed with criticism of Yeltsin’s prolonged, expensive, and apparently unwinnable war in Chechnya began to sound the alarm of a Communist resurgence and to beat the drums for Yeltsin. Zyuganov, though taking advantage of the free television time due him by law and buying some in addition, preferred to communicate with his constituency in written form—poster, newspaper, leaflet. This was a throwback to Soviet times, but not entirely a foolish decision, since the Communist Party still had 500,000 members, a large percentage of whom could be mobilized for door-to-door campaigning. Better a personable youth delivering a leaflet to your door than yet another talking head on the screen.
But there were other deeply retro aspects to the Communist campaign. The evil stink of anti-Semitism was very much in the air. When Zyuganov spoke of “the cosmopolitan elite of international capital,” which was using the United States to destroy Russia, everyone knew what he meant—the cabal of Jews that ran the world as described in the tsarist secret-police forgery The Protocols of the Elders of Zion. Yeltsin and company were not just political opponents but “the turncoats, destroyers and traitors of the Fatherland who currently rule in the Kremlin.” But Zyuganov made practical proposals as well—rents would not exceed 15 percent of income, the army would be rebuilt, natural resources would be renationalized, but law-abiding, tax-paying privatized enterprises would, though with great distaste, be tolerated.
Like Berezovsky, Yeltsin was a man who could be energized by crisis. He came alive, regaining “his spark and charisma.” He quit drinking and lost close to twenty pounds. Chubais was running his campaign Western-style, replete with “sound bites, daily photo ops and nervous advance men.” He began dealing with the war in Chechnya and used some of the Loans for Shares money to begin paying long overdue salaries and pensions. What Yeltsin had that Zyuganov did not was a strong, clear, positive message. “Five years ago we chose freedom. There can be no retreat.” And, as he said to voters: “I will ensure you freedom of choice, but the choice is up to you. Vote for a free Russia!” He reminded voters of what the “circles of Bolshevik hell” had been like: the camps, the hunger, the fear. It hadn’t been that long ago either—people did not need much reminding. “I was under a communist regime once, and I don’t want a replay of it,” said the leader of one of Russia’s most popular bands, the aptly named Time Machine. “Come cast your vote on June 16 so Time Machine can keep on playing.”
Rock ’n’ roll was on Yeltsin’s side. How could he lose?
On June 16 he didn’t lose, but he didn’t win either. Yeltsin received 35 percent of the vote, Zyuganov 32 percent. The rest of the vote was split among other candidates. This was still a time when Russia was gloriously messy with its new democracy, dozens and dozens of parties competing, even the Beer Lovers won 428,727 votes. A runoff was scheduled for July 3.
In the meantime there had been another election—for mayor of St. Petersburg—which at first seemed mainly of local importance. Putin ran the election campaign for Mayor Sobchak, his boss and mentor. “Politicians like Sobchak are usually the last to learn their luster is gone,” as Masha Gessen put it. And Sobchak was mostly luster to begin with. He had made some progress, with Putin’s help, in attracting foreign business to St. Petersburg but had done very little for the people, to improve their daily lives, the ultimate measure of all politics. Corruption, crime, and a crumbling infrastructure were what people saw. And there was always some ambiguity about Sobchak, how much of his attachment to reform was genuine, or did that tall, telegenic man just wear democracy as if it were a well-cut foreign suit?
Defeated in the election, Sobchak would remain in office until June 12, at which point both he and Vladimir Putin would be officially unemployed. But no moves could be made until the presidential runoffs were held.
This time the results were clear and striking—54 percent to Yeltsin, 40 percent to Zyuganov. As Yeltsin’s biographer Leon Aron said: “In the end he won because the election had, as he intended it to, become a referendum on democracy and communism, rather than on market reforms or the Russian version of capitalism.”
If things had gone the other way—a Yeltsin defeat and a Sobchak victory—Putin would probably have remained in St. Petersburg, dabbling in democracy and corruption, at the margins of history.
But that’s not what happened. Instead, Chubais, the much-hated chief of privatization and the successful manager of Yeltsin’s reelection campaign, contacted Putin with a job offer—deputy chief of the Kremlin’s Property Department. It was an important post, dealing with the $600 billion in property that Russia had acquired from the USSR. Putin would be “in charge of the legal division and Russian property abroad.” He accepted and moved to Moscow.
It’s probably axiomatic that no one gets to the top without fierce ambition, especially the top of the heap of Russian politics. But Putin himself could hardly have dared set his sights as high as he in fact rose, nor imagined how swift that ascent would be. A year after moving to Moscow he had become deputy chief of staff to the president; the next year he would be named director of the FSB, the successor to the KGB; and in the following year, 1999, he would be appointed prime minister, a post he did not hold for very long because, during his annual December 31 speech to the nation, President Yeltsin shocked the country by announcing that he was retiring prematurely, with Prime Minister Vladimir Putin to take the his place effective immediately.
Even for a man of ferocious ambition and killer instincts to rise from unemployed bureaucrat to president in the space of some three and a half years would be a dizzying achievement, but for a man of no particular outward ambition it assumes the sheen of legend. How did it happen?
First, neither Putin’s uniqueness nor the scale and speed of his rise should be exaggerated. Stalin, Gorbachev, and Yeltsin all seemed to come from nowhere. And as vice mayor of St. Petersburg, Putin had been the number two man in Russia’s number two city, not exactly nowhere. Still, it’s a long way from there to the Kremlin.
Putin had already caught the Kremlin’s eye when amazing Boris Berezovsky by not asking him for a bribe. In refusing that bribe, Putin won a reputation for both integrity and something worth more than integrity in the Russian political situation—the brains to know which bribes to take and which not to. Berezovsky was a man of great power behind the scenes, a “kingmaker”—better to have his respect than his rubles.
The Russia of the late nineties was ruled by “the Family,” meaning Yeltsin’s own family and a few others, like Berezovsky, who were allowed into that inner circle. Among the members of the Family none was more important than Yeltsin’s daughter Tatyana. At one point she needed an apartment in St. Petersburg. The one that would be perfect for her was, unfortunately, being occupied by some important Americans and other foreigners. Putin made the problem go away.
When Sobchak lost the race for mayor of St. Petersburg, Putin was offered the chance to stay on as deputy mayor. But he had pledged not to if Sobchak was not elected, and he kept his word. Sobchak was not important to the Kremlin, but Putin’s reflexive loyalty was duly noted.
In Moscow it looked like Putin was fated to forever remain the number two man, distinguished by his loyalty and ability, but without the drive and charisma to reach the top of any one governmental body, not to mention the government itself. He would be the deputy chief of the Kremlin’s Property Department, then Boris Yeltsin’s deputy chief of staff, and, later, one of three first deputy prime ministers in August 1999.
But in the meantime Putin had actually headed something. To the immense chagrin of his former colleagues, between July 1998 and August 1999, Putin served as director of what would soon be called the Federal Security Bureau, the FSB. That organization is often described as the successor to the KGB, which is not entirely accurate. Until the fall of the USSR the KGB was like a combination, at the minimum, of the FBI and the CIA. After the fall, those two functions were separated, and now everything connected with foreign intelligence is handled by the SVR, the Foreign Intelligence Service.
Putin claims to have been in no hurry to return to the closed, arcane world of the security services. He would not make any dramatic shake-ups during his tenure, but two developments of significance would occur in that year and a month. For the first time he tasted the pleasure of being the boss. Of course, there were still a few people above him, but it was a foretaste of the Kremlin, where, as he put it, “I control everybody.”
The second development was more tied to specific events. The prosecutor general, Yury Skuratov, had launched a corruption investigation that was coming too close to Yeltsin and the Family for comfort. Ruin and prison were among the possibilities they were facing. Suddenly in March 1999 state TV broadcast footage of the prosecutor general cavorting in bed with two prostitutes. A short time later FSB chief Vladimir Putin also appeared on television to attest that experts from his organization had analyzed the video and ascertained its authenticity. This compromising material, known as kompromat, effectively put an end to the investigation and the prosecutor general’s career. Yeltsin and the Family owed a debt of gratitude to Putin, who had exhibited not only loyalty but fierce, impressive effectiveness.
Yeltsin now understood that as long as he held power it would be possible to fend off attacks like that of the prosecutor general, but once out of office, he would be defenseless, easy prey. And that time was rapidly approaching. Conferring with Boris Berezovsky among others, Yeltsin began developing a plan.
In midsummer 1999 kingmaker Berezovsky was dispatched to Biarritz in the South of France, where Putin and his family were vacationing, to convince Putin to accept the post of prime minister. There two things impressed Berezovsky. One was “the very modest, absolutely simple apartment” where Putin was living. The other was Putin’s lack of eagerness, confidence: “He wasn’t sure he was capable.” Neither money nor power seemed greatly to tempt him, and what else was there?
Of course, there may have been a dose of cool calculation in Putin’s coyness. The post of prime minister was a stepping-stone to oblivion. Yeltsin was changing prime ministers every few months, at such a dizzying rate that, upon the appointment of Putin, the editor of the Financial Times asked his Moscow bureau chief: “Do I really need to remember this one’s name?”
In the event, he took the position of first deputy prime minister, one he would hold for a bit less than five months. That was time enough for Yeltsin and Berezovsky to hold their magnifying glass over Putin.
He had already demonstrated strength, loyalty, and effectiveness. In addition, he was vigorous, unlike Yeltsin, who was suffering heart attacks and undergoing quintuple bypasses, and had the flushed, puffy look of those who are not long for this world. Putin was tough on Chechnya and knew how to use the security service to neutralize enemies. A bit colorless, a bit ordinary, but that might be just what Russia needed after extravagant Gorbachev and flamboyant Yeltsin.
But most important were Putin’s strength and loyalty to keep the deal Yeltsin would offer—power for immunity.
Yeltsin’s vital interests and Putin’s chief characteristics aligned and clicked. A perfect fit.
And so it was that on December 31, 1999, on the eve of a new century, President Boris Yeltsin, in his annual address to the nation, asked Russians for their “forgiveness for the fact that many of the dreams we shared did not come true and for the fact that what seemed to us so simple turned out to be tormentingly difficult.” And thereupon he handed Russia—its eleven time zones and its nuclear weapons, its thousand-year history and future fate—over to Vladimir Putin.
Lenin had famously said: “Any cook should be able to run the country.” A cook’s grandson would now have the chance.