The Russia Conundrum

Putin took this personally. As soon as he became president in January 2000, he had appointed many of his former KGB and FSB colleagues to senior positions in the Kremlin. The Siloviki, or ‘Strongmen’, were determined to arrogate all power to themselves, unprepared to countenance other centres of opinion outside of the Kremlin, and resentful of anyone who proposed a different model of behaviour from the one they were intent on imposing. Putin announced that he was going to ‘destroy the oligarchs as a class’, echoing Stalin’s bloody promise to ‘destroy the kulaks [rich peasants] as a class’. In fact, as later became clear, Putin’s actual aim was simply the redistribution of wealth into the pockets of his inner circle, who would themselves become the real oligarchs. Having established his ‘nonaggression pact’ in May, Putin once again summoned Russia’s top executives to a meeting in July, this time to lay down the law. He said we must keep our companies out of politics, but only later did it become clear that he meant much more than that.⁵ What he really wanted was to appropriate the resources of our private companies to serve his own interests and the interests of his friends. He wanted an end to the denunciations of official corruption, because corruption was the business he was in; corruption was the means by which he was planning to rule the Russian state and he didn’t want anyone trying to curb it.

Some of those on the receiving end of Putin’s lecture reacted with fury. Boris Berezovsky, who believed he had personally helped bring Putin to power, felt insulted by the upstart president and pledged himself to enduring opposition. Vladimir Gusinsky tried to retain the independence of his media empire but was arrested, locked up and driven into exile, where he was soon joined by Berezovsky and others.

As for myself, I took a step back. I soon began to minimise my personal interactions with Putin and work instead with the prime minister and the government. When we needed to interact with Putin, I asked my colleagues to go instead of me. I knew my antipathy would come to the surface and I wouldn’t be able to hide my disgust at some of the things he was doing. So, it was better for our company if someone else dealt with the Kremlin.

Soon, Putin began to show his true face, without even bothering to disguise it. He ordered the closure of the independent TV channel NTV, claiming he was doing so for financial reasons, but making little secret of the fact that it was actually because NTV had the temerity to criticise the president. And then there were the bare-faced lies he told about the Nord-Ost theatre siege in October 2002 and the Beslan school massacre in September 2004, when Chechen terrorists seized innocent hostages and the subsequent actions of Russian security forces resulted in many unnecessary deaths.

I look back now on our conversation over the barbecued kebabs in the grounds of the presidential residence with very different eyes. ‘Let’s stop going back to the past,’ Putin said to us. ‘Let’s build a new life in this country, where the state doesn’t try to dominate and control business, and business doesn’t use its resources to disrupt the working of the state.’ His words completely coincided with my own views. I vividly remembered the difficult days after the collapse of the USSR, when the ‘red directors’ used to blackmail the government by taking workers out on strike, refusing to deliver supplies and creating artificial shortages of vital goods. Putin told us he didn’t want that sort of blackmail from business and I completely agreed with him. But he later claimed that what had been agreed between us was something very different. He started telling people that we business leaders had pledged to withdraw ourselves completely from anything to do with politics – not just from blackmailing the state with strikes and so forth, but from expressing our views or lobbying or supporting political parties and candidates. That, of course, was complete nonsense. Putin knew he couldn’t ask us for commitments like that; it just wouldn’t have been possible. All big companies have to lobby for their own interests – it’s just a fact of business life, in Russia and in the West.