The Russia Conundrum

After a series of speakers had mouthed meaningless platitudes, the microphone came to me. I had prepared a speech, complete with slides, that would deliver a stinging rebuke to those who perpetuated corruption in Russia, up to and including the president himself. When the moment came, I was nervous, but I pressed ahead. ‘Corruption in Russia – a brake on economic growth’ flashed up on the participants’ screens, followed by a damning series of statistics. According to opinion polls, 27 per cent of Russians believed corruption to be the most dangerous threat to the nation; 49 per cent believed corruption had spread to the majority of state officials, including the police, the tax and customs agencies, the security services, the judiciary, the traffic police and the highest levels of federal power. The finding that almost half of the Russian population believed the president and his closest allies to be corrupt sent a buzz around the table. Putin was listening and staring at the slides, but like the trained KGB man he was, he betrayed no sign of emotion.

The next statistics were about people’s views of the Kremlin’s relationship with corruption: 32 per cent of Russians, reported the pollsters, believed that the Russian leadership would like to tackle corruption, but was powerless to do so; 29 per cent believed our leaders could tackle corruption but chose not to do so; and 21 per cent believed it neither wished nor was able to tackle it. The meeting had moved from the empty expression of pious hopes to something much more concrete: evidence that one third of Russians believed their president to be powerless in the face of organised corruption, while another third believed he was complicit in it.

I could see that Putin’s patience was running out. He was looking at me with steely eyes, a tense, fleeting smile on his lips, ready to cut me off. But I had something more to say, this time about a specific instance of corruption involving one of the president’s own sidekicks. ‘We need to make corruption something that everyone is ashamed of,’ I said. ‘Let us take for example the purchase by the state oil company Rosneft of the firm Severnaya Neft…’ There was silence in the room; all those present knew I was accusing the president of Russia’s inner circle of personal involvement in a crooked business deal. I forced myself to continue. ‘Everyone knows the Severnaya Neft deal had an ulterior motive … I have to tell you that corruption is spreading in our country. You could say that it started right here – and now is the time to end it!’

Unbeknownst to me at the time, the beneficiary of the Severnaya Neft deal was not merely a sidekick of the president, but the president himself. I was told later by sources close to Putin that the missing $400 million had gone directly into his personal account, so I was in fact accusing him personally of sitting at the centre of the web of corruption. His response was telling. Instead of denying the charges, he retaliated with a not very veiled threat against me and my company.

‘You mentioned Rosneft,’ Putin said, ‘and the deal to buy Severnaya Neft … The first things to say about that are clear: this is the state oil company and it needs to increase its stocks of oil, which are currently inadequate. But some other oil companies, including for instance Yukos, have got excess reserves. The way it got hold of them is a question that forms part of the theme we are discussing today. And that theme also includes questions about the payment or the non-payment of taxes. You and I have at times talked about the problems your own company has had with tax payments, although, to be fair, the leadership of Yukos reached an agreement with the tax office and dealt with … or is dealing with … all the charges against it, all the problems with the state. But nonetheless, one has to ask, “Why did these problems arise?”’

Putin had evidently been taken aback by my words. Unusually for the calculating KGB man that he is, he was shocked into an unguarded response, first raising the question of Yukos’s own oil reserves, then muttering darkly about an alleged underpayment of taxes – an issue that he and I had discussed and resolved to everyone’s satisfaction several weeks earlier. After this initial outburst, he forced himself to regain control, even acknowledging that we had in fact settled the tax issue, which is pretty much Putin’s modus operandi – attack, then take a step back. It allows him to observe a person’s reaction, affording him time to plan his follow-up, then launch his deadliest assault when his target is thrown off guard.