The material summarised or quoted below all comes from “Putin’s People” by Catherine Belton
Boris Yeltsin made a speech when he handed over government and put Putin in power in May 2000:
“We all have something to be proud of. Russia has changed. It’s changed because … we strongly defended our main achievement: freedom … we didn’t allow the country to fall into dictatorship.” Vladimir Putin also made a speech, “We believe in our strength, that we can really transform our country … I can assure you that in my actions I will be led only by the interests of the state.”
Who put Putin in power?
Hmm. It depends on what you mean by ‘the state’. Putin’s actions in the next two decades were to support a state that was not operating in the interests of most of its citizens but in the interests of the kleptocratic chosen few, who had to be behoven to Putin himself.
The chief threats to Putin’s power were picked off, one after another, starting with the media moguls like Gusinsky and Beresovsky. The case of Khodorkovsky was a watershed. This banker had acquired Yukos, the main Siberian oil company.
Western style capitalism
He had moved from his origins in ‘wild east robber capitalism’ to being a champion of Western style corporate management and transparency. He’d hired Western oil executives to restore the oil fields. He was linking up with Western capitalism. But Putin was not happy with such wealth outside his control.
In rigged trials Khodorkovsky was pushed out, and then imprisoned for ten years. The other tycoons now realised that Putin was carving up the country’s wealth for himself. They either came to deals with him or went into exile. Abramovitch, for example was allowed to sell Sibneft to Gazprom.
It is important to realise that a lot of the information in this book comes from those so disillusioned with Putin’s Russia that they sought exile in the West. But this is not to say it is biased as the author is careful to detail her sources, and some of them are still operating inside Russia.
Inhumane actions of FSB/Putin
In 2002 there was the horrific terrorist siege in a Moscow theatre, which ended when security forces pumped gas in, which killed 115 hostages as well as the terrorists. Again there are dark, corroborated, rumours that this was a special FSB operation (gone wrong) to enhance Putin’s reputation. The attack enabled Putin’s government to ramp up military operations in Chechnya.
In 2003, gas was cut off from Belarus, Lithuania and Poland in the middle of February on Putin’s orders, in spite of the resistance of Kazyanov, the Yelstin-era Prime Minister. He was brushed aside as Putin was intent on controlling the entire energy sector.
The eagle spreads his wings
When Putin was easily re-elected for a second term, his imperialist yearning became more evident with his revival of the old Soviet anthem and his new fervour for the Russian Orthodox church. Descendants of white Russian émigrés were brought into his inner circle. One of them described his rule as having three knots: autocracy (rule of the strong man, the Tsar); territory (the lands of Holy Russia) and the Church.
Russia faces challenges
In 2004 came the first challenge from Ukraine, the Orange Revolution, which Putin’s circle interpreted as the result of Western plotting. Meanwhile there was another terrorist event at a school in Beslan, North Caucasus, where more than a thousand were taken hostage. The Russian security forces bungled their release and more than 300 died including many children.
Again, there are dark rumours of political machinations behind the bungling. Putin used this time of public outcry to reduce democracy further: he abolished elections for regional governors. His speeches were becoming imperialistic “Russia should continue its civilising mission on the Eurasian continent.”
The Empire strikes back
Gas supplies and prices were being used to manipulate politics, notably in Ukraine. This book names the shady Ukrainian businessmen who would never have been able to get so rich but for the Kremlin’s say-so.
Cash flows west
From when the Soviet economy started to disintegrate under Yeltsin, Russian wealth was being stashed in Western banks. The sums of money are enormous, whenever they broke into the news: the Moldovan laundromat, the mirror trades through Deutsche Bank, Danske bank conduit, the bank of New York with funds linked to Russian mobsters and the web of companies revealed by the Panama papers in 2016
“In the second half of Putin’s rule the flood of money leaving the country multiplied many times over the rates seen in Yeltsin years.”
Welcome to Londongrad
There is a whole chapter on Londongrad: “For Western bankers who’d been working so intently to integrate the Russian billionaires into the global economy, dependency on the Kremlin seemed a secondary matter.”
This flood of money inflated London property prices, and enriched a service army of estate agents, lawyers and private schools. The Russian links of Aaron Banks who financed the Leave campaign are also touched on.
Russian money bails out D. Trump
There is even more detail on how Russian money helped the rise of Donald Trump, bailing out his property companies and helping him acquire more. “The Russian black cash networks seemed to be digging in ever deeper.”
Meanwhile, the secretive wealth of Putin is increasing, with rumours of a palace on the Black Sea coast, and a super-yacht with disguised ownership.
The UK Government’s dilemma
What is to be done? Now Russia’s horrific invasion of Ukraine has triggered sanctions, Western nations are formulating lists of sanctioned Russian business people, some of them living in exile in London, the US or other European cities.
As Panama Papers revealed, the network of innocuously named shell companies makes it difficult to track down owners. Further legislation may be needed. But whether the UK government under Truss has the appetite to tackle this effectively is doubtful. Too many rich Russians, some of them probably linked to the Kremlin, have been donating to the Conservative party. In order to understand this tussle over the sanctions list, it is essential to read this book by a fearless Western journalist.
This is the third article based on the book Putin’s people by Catherine Belton
This book is available on reserve from Kent libraries