Putin

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.