Putin’s Kleptocracy: Who Owns Russia?

with Professor Karen Dawisha
Walter E Havighurst Professor of Political Science, Miami University
Chaired by Lord Risby

Tuesday 16th June 2015
Committee Room 2, House of Lords

Lord Risby
Ladies and gentlemen it’s a great pleasure for me to welcome you here this afternoon. And first of all may I just make one slightly house-keeping announcement: Karen’s books are available and I hope everybody will be able to get a copy, and I’m sure they’ll be a cracking read. But we’ll know more about that in due course.

Karen Dawisha is the Walter E Havighurst Professor of Political Science at Miami University. I think it would be fair to say that this discussion which we’re going to have today could just simply not be more timely. Because of course we have all the manifestations of Mr Putin’s behaviour, policy whether with Ukraine, Syria, Iran… and of course the latest thing is that if we do see an exit from the single currency by Greece then what does that mean? On departure from the European Union will they turn to one country that may be able to assist them in some way or another? And whether they will get a base? I mean, there are all sorts of possibilities attached to this.

But the main thing is that we’re absolutely delighted to have you, Karen, here today, because as I said this is a really important moment and we all need some insight into this matter. She’s written five books prior to Putin’s Kleptocracy: Who Owns Russia?, eight edited volumes, and numerous journal articles. [She] continues to do research and teaching in the areas of post-communist transitions and Russia politics. And I, personally, have an interest in this Karen, because I’m chairman of the British-Ukrainian Society.

So, I know that we’re going to have a treat today. It’s wonderful to have you here, and we look very much forward to what you have to say, and explain what is going on in this country and its leader? Because we are all unclear at times, what this is all about. So thank you very much indeed, and of course—as always—The Henry Jackson Society brings tremendous people to our Parliament, and we’re grateful for them do it once again. Thank you so much.

Karen Dawisha
Thank you very much Lord Risby for hosting me, and Andrew Foxall as well. The last time I gave—I was working in the Houses of Parliament was after the Soviet invasion of Afghanistan, and the select committees had just been informed, and I was the very first advisor on Soviet policy for the very first report that was prepared by the Foreign Affairs Committee on whether or not Britain should boycott the Olympics—the 1980 Olympics. And I’m proud to say that was an excellent report, and Prime Minister Thatcher took a decision long before that report to attend before it was even published or prepared. So I feel sure that my impact today can only be greater.

So it is a pleasure to be here, and I’m going to make just four points, and then I’ll take as many questions as possible. The first is that I believe it is wrong to see Putin’s government as a mere authoritarian system. I believe that we have in this country, in Russia, a system that can be properly called a ‘kleptocracy.’ And by that I mean that it’s a system in which the state nationalises the risk and privatises the reward.

In order to receive the benefits of the privatisation of reward you need to pay tribute; it’s a ‘pay to play’ system, and you need to maintain absolute loyalty and maintain a code of silence. Something that Andrey Illarionov said long ago in front of the US Congress—it was in 2006 to be precise—that the system in Russia was based on omerta [the ‘code of honour’ within mafia circles], and we know exactly where this word comes from.

And we’ve had, sadly, too many cases of people dying since then, proving this rule. It’s now the most unequal country in the world—the most unequal country in the world, including all those very unequal Caribbean islands where everyone’s hiding their money. 110 people control 35% of the wealth of this vast and very wealthy country. And what’s interesting about it is that despite its wealth, or perhaps because of the nature of the construction of wealth in this country, it’s a system in which no one has great interest in keeping their wealth invested in the country. I’ll come back to that in a second.

I believe that the system was established purposefully. It’s not an accidental autocracy. It’s a system that was established by the group now in power, from a very early stage in the 1990s. They started to work together. They failed—and I’m not here talking about Putin, but people senior to Putin—they failed in the coup of 1991. And their desire to achieve this kind of revanche did not go away, and they succeeded in bringing their man to power in 2000. It’s the same ambition, the same layer of people. Gleb Pavlovsky, who served as Mr Putin’s…the head of his PR campaign for the 2000 election, and worked closely for the Kremlin over a decade and then fell out with the Kremlin, or more precisely the Kremlin fell out with him, has said that in 2000 his task was to reawaken—to reawaken—in the Russian people the habit of adoration.

And any of us, and I’m sure all of us know quite a lot about Putin as the embodiment of power in Russia, understands that what Pavlovsky was trying to do, and in fact what he succeeded in doing, was make sure that the Russian people saw Putin as a man of action. That he wasn’t somebody who was implementing the stale and discredited ideology of the Communist Party of the Soviet Union. No. He was implementing something much more robust, much more dynamic, and that embodied his own aspirations, his own personality.

Pavlovsky has also said that Putin represented a—and this is a quote—“a very extensive but politically invisible layer of people, who after the end of the 1980s were looking for a revanche in connection with the collapse of the Soviet Union.”

This I think is an important part of my research. The work that I did on how—at what point did they decide to establish the system that they clearly have established? They didn’t just stumble into this system. Of course, not everything could be foreseen in advance. Most of all, how little resistance they would face from the West. Beginning with Khodorkovsky, beginning with the Second Chechen War.

And one important document that I found which has been erased from the Russian internet, was the subject of three days of articles in May 2000, and those articles are still there in Kommersant, May 3-5 2000. But the document was erased. I recovered the document and you’ll see references to my website for the book, which is very public, and the entire document is available on that website, and is has also been translated into English. Actually it’s not the entire document: the amount that was leaked from the Presidential Administration is there.

And what is important about this document, and I’m going to read you three lines from it, is that it is a 1999 document that provides the path. What is going to be the function of every single department, and office, in the Presidential Administration, in the Kremlin. So in this document you can see very clearly that they had the open functions of each of the offices, the actual and the secret functions of these offices. So for example it said in the introduction “if the new president,” and this is a quote, “really wants to ensure social order and stability in the country during his rule then the self-governing political system is not needed,” this is what you and I would call democracy, “instead he will need a political authority that will create the necessary political situations in Russia and in the Near Abroad”

So objectives for the Near Abroad were there from 1999. Going on, and this all on domestic stuff: “all the secret and special activities to counteract the opposition will be entirely in the hands of the special forces. Opposition media outlets will be driven to financial crisis,” which as anybody who follows Russia knows that the first weekend of Putin’s presidency they rappelled down the walls and crashed through the windows of [Vladimir] Gusinsky’s [the media tycoon who founded the Media-Most company] offices.

And I think the final thing I think is interesting about this is the real indication of their cynicism, very early cynicism, but the seriousness of their purpose: “the open function of the Presidential Administration in relations with the opposition is to talk about locking-in opposition norms and joining forces to fight against extremism, while the closed function,” the actual function, the secret function, stated: “it is necessary always to ruin the coordinated plans of all opposition in general and each oppositionist personally.”

So when I found this, seriously, I read it every day for a month. Because I couldn’t believe that everything I’d thought about democracy in Russia had been so wrong. This is not a country which got lost on the path to democracy. This is a country that never was on this path.

Now I’m not talking about the Yeltsin period, you can have different views on that. God forbid I’m not talking about the Gorbachev period. But I think it’s very important to see this a purposeful project.

And the final thing that I’ll talk about, very quickly, is that Putin recognises, and we must recognise too, that this system will change. All systems change. So what is it that are the sources, potential sources of change of this system, internally and externally? And I think that there are three internal sources of change.

The first is that the businessmen who are being encouraged to bring the money home, ‘de-offshorisation’ and all that, they don’t want to do it. And they don’t want to lose their money. You have some of them like [Oleg] Deripaska saying that “everything that we’ve earned is available to the state if it requires.” But keep in mind that officially from the Central Bank of Russia figures indicate the between 2005 and 2013 $335 billion left the country in capital flight. 335, from 2005 to 2013.

Crimea is annexed illegally and the ‘de-offshorisation’ goes into effect, along with sanctions, and in 2014 [$]114 billion left the country. So almost half again left in the one year that Putin was thinking the money would come back. So I do think that we have to see these businessmen as a group in and of themselves who are not going to be in favour of returning their money.

The second source is from the national security elites. Any violent change, any change in which Putin doesn’t step down willingly, will have to involve people who have power. So that rules out [the oligarch, Arkady] Rotenberg, for example: the businessmen are not going to be able to achieve this. So the national security elites are second and of course the events that we’ve seen since [Boris] Nemtsov, his murder, indicate that there is quite a lot of bulldogs under the rug, and fighting amongst these groups.

And the third is of course social unrest itself. When you have the fall in the—the collapse in the price of oil from a height of over [$]140 to below [$]50, you have a budget that was balanceable at $100 a barrel. They had to redo the budget, and of course they took the money not away from the businessmen; they took the money away from health and education. And we already have seen trouble in the Urals, trouble in the provinces, from people who are teachers, doctors and so forth, who haven’t been paid in months. This is not sustainable. And so I think that the regions are a big problem.

Externally, well obviously cohesion of policy is extremely significant. If the EU doesn’t stand behind the same sanctions, if they lose a vote and one of the countries votes to not continue with the sanctions, this would be a big mark against the sanction regime. And, you know I do worry about that, and it’s a concern also in the United States, where just last week Leslie Gelb, who’d been involved with the Nixon administration, and had gone on to the Chairman of the Council of Foreign Relations and other things, was the co-author of a paper I find quite shocking, called “The New Détente”—the new détente. In which he called Putin Dracula, he admitted there was a kleptocracy, but said: “you know, at the end of the day we have to get on with them, we have to recognise that the United States has no lasting zone of interest in Ukraine, and we have issues that are important.”

And this is of course going into a presidential season, and this kind of paper is extremely worrying. I won’t talk about the City, out of my politeness, but I do think that there is a problem, both in the United States and in the UK. In the UK according to a recent article in the New Yorker, which I assumed was publishing in the New Yorker because it couldn’t be published in the UK, by a British journalist, says that there’s $100 billion of property in the UK that is owned by shell companies whose beneficial owners are unknown. Of course a lot of it, not all of it, is Russian. This is really of great concern to me.

And the final thing, when I say that the rich in Russia don’t want to give up their money, and Putin is headed to a showdown with them on this issue, this is a quote from Putin, which I think shows us the devastating effect of the nature of weak property rights in Russia. He’s said to have said, as reported in the New York Times, in the New Year event where these businesspeople were invited, he summed up the situation of property rights in Russia, and he told then: “chickens can exercise ownership off eggs, and they can get fed while they’re sitting on their eggs, but we all know it’s not really their eggs.”

So when you have a president who’s telling the business elite this then I think that we can only see that there will be change in Russia, and it will probably come from multiple sources, and many people—not all people—but many people, will not stand to prevent it.

Thank you very much.

Lord Risby
Professor thank you very much indeed, and I know that this will provoke and encourage many people to ask questions. So please, if you could indicate to me what questions you want to ask, and also indicate your name and if you have any particular interest in this or represent a particular organisation.

So would anybody like to start? Yes please.

Marc Polonksy, White & Case LLP
Thank you very much for that introduction, and for the brave book that you’ve put together.

Lord Risby
Could we please have your name?

Marc Polonsky
Ah sorry, yes. Marc Polonsky: I’m a lawyer with an international firm. I was based in Russia for ten years.

There is a very interesting review in the Times Literary Supplement by Richard Sakwa who complimented your book but took issue with your term ‘kleptocracy,’ and put forward the position–that it’s more complicated than that, and that there is a social contract in Russia in which the regime doesn’t just steal the money, but uses some of the money to fund proper social purposes. Could you please talk about your response to that?

Karen Dawisha
Well of course, the entire first part of my talk was a direct response to Richard, who’s a good friend of mine. I thought it was a very serious and respectful review, and he obviously has the complete right to his own opinion—he’s just wrong.

There’s just not a social contract. When a president talks about his business elite as chickens sitting on eggs, what is the social contract that they are—what is the nature of the understanding that they have? In this country you’re just celebrating the Magna Carta. Where is the rule of law in Russia? Where is that?

I’ll tell you where the rule of law is, and I don’t know which law firm you work for, but the rule of law for Russia is in London. Why is it that $150 billion left the country last year? Because they believe that their wealth can only be secured in the long term outside their own country. So if you don’t have the ability to secure your rights, then I don’t think there’s any political theory that would say that you have a social contract; not even Russian political theory, by the way.

So I do keep up close on what’s happening with trials and suits of one oligarch against another, and I’m very impressed that they take place in the UK; they don’t take place in Russia. Because the result of those court cases cannot be secured, right? If you can’t secure your rights then you don’t have a social contract.

And let’s leave aside the teachers. If you don’t get paid for four months there’s no social contract.

Lord Risby
The gentleman behind the division [indicating to audience].

Alex Butcher
Alex Butcher at [inaudible]. Lots of people connected to Putin who have significant business interests you know, from Rotenberg to [Gennady] Timchenko and the others. Do you they have significant influence over Putin in decision making processes, to say stop him from further confronting the West, and getting further involved in the Ukraine, etcetera?

Karen Dawisha
Well, here’s the problem with trying to understand Russia at the moment. I think that there’s a lot, there are a lot of people in many countries who spend a lot of intelligence dollars trying to know who can get through to Putin, but we don’t really I think know the answer to that question. And that’s one of the great sources of short term stability and long term instability. Short term stability because everyone’s always looking for his reaction; long term instability because nothing happens. You can’t innovate in this economy if you don’t know whether the number one approves of this.

I don’t know if any of you remember 2000, Ostankino, the huge TV tower in Moscow in 2000 caught on fire, and no one would turn off the electricity until Putin had approved it. This was in the summer of 2000! Imagine how much worse it is now.

So yes, Rotenberg and Timchenko both have enormous influence, measured by any number of means, but I don’t think that we can say that there’s a council of elders who can sit him down and say: “look it’s gone on enough.” Of course I would love to know the answer to that question, but I personally don’t know.

Lord Risby
The gentleman second from the end there. Yes.

Euan Grant, HM Customs and Excise (Former)
Thank you very much. The name’s Euan Grant, former UK customs intelligence analyst in the ex-Soviet countries. My question is based on quite a lot of years working in those countries, but never actually in Russia itself. But I’ve [inaudible]. And my question is particularly based on my view that frankly I think that the United States has dealt with identifying and perhaps being prepared to look at these issues much more so than the European countries, including I’m afraid to say the UK.

Have you talked about your book in continental European countries, and what kinds of response did you have from [inaudible]?

Karen Dawisha
Well, as you know this book is not published in the UK, and it’s actually not published outside of the United States. So…despite the fact that many publishers have contacted my publisher, Simon & Schuster, asking for rights, my publisher has not provided those rights anywhere. And I think that there is a large problem that there are very deep pockets and ill-intent on the side of the Russians, and they use it to great effect by hiring lawyers in this country who specialise in proactive reputation protection, and who watch out for them. And as goes in the UK so goes much of continental Europe.

And I think that there are very few countries that have the impact that the UK has on this issue, and if it’s not published in the UK then I don’t think it’s going to be easy to publish anywhere else.

Lord Risby
Yes, the gentleman right next door. Thank you.

Max Hess, Intelligence Analyst – Eurasia and Former Soviet Union at the AKE Group
Hi, my name’s Max Hess, I’m an analyst for the AKE Group. My question is regarding your statements on the business elites, and what you think the effects of the Ukraine conflict has been there. I was recently in Moscow and I met with a relatively well connected Russian business person who I’ve known for many years, who had done business in Germany and Russia, and he’d always been more balanced in his views on how the Kremlin had interacted with business; he had often criticised it, somewhat notably. And when I spoke with him then his opinions had changed remarkably to being in favour of the Russian government. He said: “look we have what happens in Ukraine comes to Russia then just like in Ukraine the first people who are going out are the oligarchs,” given they haven’t been successful but leave that aside, that’s the opinion that I’ve heard.

So how do you think we engage with that, and how do you think that we deal with that kind of reaction because if obviously the ideals of the Euromaidan are successful in Ukraine that will further chase away the Russian elite and potentially put more power into Putin’s hands?

Karen Dawisha
Well the best thing that could happen to business would be for there to be a climate of innovation and partnership in both Ukraine and Russia. So I’m sure that in the long term, and I know that profits are measured on the basis of quarterly bottom lines all over the world, I’m not sure that in the long term anybody benefits from a kleptocracy succeeding in Russia, in which you have more Sergei Magnistkys. Those of you have lived in Russia, do you enjoy working in that kind of climate? How can we imagine that this is good for business? Business is about real people making real profits, making real money, carrying the international financial community and innovation and growth forward. What is there about what’s happening in Russia now that’s about that?

Look, when you have, according to UN statistics and statistics of various international NGOs, statistics on the control of corruption, Russia has now fallen below Nigeria. Is this an environment anybody in the West wants to do business in? Who wins from that?

Well, perhaps two of the gentlemen who were just named, but even they will lose ultimately if this is continued. So the best thing would be to make sure that you have growth, openness, rule of law, perhaps starting in Ukraine, and one could only hope that in the long term it would happen also in Russia.

Lord Risby
Thank you. Yes.

John Dobson
John Dobson, former Moscow diplomat. Before my question can I just say that I have been in Moscow a few weeks ago talking to some friends—I lived there during the demise of the Soviet Union—and they too had surprisingly changed their minds about the West. They were very pro-West when I lived in there in 91-94, now they are delivering [inaudible]

But can I get to my question, which is to do with sanctions. During my visit I also talked to lots of people in Moscow and St Petersburg about this very thing, and I know that of course the Western view is that sanctions must be continued, and they’re very worried about that [inaudible]. But paradoxically, one could take a view that sanctions are supporting Putin, in that they aren’t suffering very much. I know some wealthy people are, because of their travel restrictions, but some of my friends are saying “well we can’t buy our favourite cheese any more but [inaudible] but it’s supporting our country because we’re starting to do things ourselves instead of just importing it.”

So is there a point of view that we should relax sanctions, contrary to what those politician believe?

Karen Dawisha
I’ve heard the argument, I’m very familiar with the argument. This would be my response to it. And that this that I completely believe that of course the longer sanctions go on the more there will be sanctions busting, and you will see economic activity driven into the grey zone, even more than it is now. As we saw in Iraq, for example.

However, there’s something to be said for encouraging Russia’s wealthy and Russia’s political elite to have a little more skin in the game. And sanctions, if it were to lead to even a slightly increased pullback of assets and just living in Russia, if certain people no longer can have Finnish and Swiss nationality, and have permanent Schengen visas, and be on their private jets, and live outside Russia; if they really are obliged to Russia, then perhaps they would get some more vested interest in the transformation of the system. Maybe they would be more anxious to end Mr Polonsky’s idea of a social contract.

Because at the moment what is happening whereas we would expect, what we did expect was that over time vested interests would produce the demand for rule of law, it didn’t happen and hasn’t happened in Russia because vested interests can still predate without limits in Russia, and secure their money under our rule of law systems. Perhaps if they’re obliged to stay in Russia, and perhaps if their children—of course their children are all…one of the reasons why people in Russia are becoming more anti-Western is because the ones who are pro-Western are less and less in Russia.

I mean, right? Look around you. If Yakunin according to the New Yorker article, if Yakunin’s — the person who amongst the inner elite is identified with the most fervent views about the uniqueness of the Orthodox world — if Yakunin’s own son has that house in Highgate, and his own grandson is going to British private schools, then we have real problems. Where is the generation that’s going to take over this system? Are they going to come back and do this?

So perhaps it is of interest to us to encourage them to have some skin in the game in the long term, instead of being permanently itinerant.

Lord Risby
Right at the back.

Ray Silvius, Associate Professor, University of Winnipeg
My name’s Ray Silvius, and I [inaudible], and I happen to be in town fortuitously for today. I just want to pick up on this idea of the social contract, as someone said here earlier. And one of the things is—and I’ve not read the book yet—but one of the things I might ask you is, you know, I certainly agree with you to the extent that Putin has considerable executive authority, but what are the sources of the ideas and values?

My suggestion is that one of the stabilising factors in Putin’s government is that it does have a wellspring of public sympathy, and in fact mobilises it for executive ends. So, I’m thinking of things like Eurasianism, new imperial literature, for example, which came out of Russian literary circles in the 1990s and has manifestations in Russian conservatism. Alexander Dugin, who many of you may be familiar with, writing in the Financial Times saying several years ago saying there’s an old equation in Russian conservatism: “tsar good, elites bad.”

I mean, to what extent is that part of the equation here? Because while such sentiments can certainly be moulded and directed, I don’t think it can be simply created by executive order.

Karen Dawisha
Well everything that you’ve said is of course very important, and it goes back to the days when these paintings were done right [indicating to paintings in the committee room]. Tapping into this wellspring of adoration, where does that come from? It’s I think correct to say that there would be no such wellspring in the United States of anybody, right? Hard enough to get a wife to adore her husband, or vice versa. [Laughter] So there is obviously a deep political culture that is capable of being utilised, there are obviously good reasons why Gorbachev’s turning to the outside was resisted. There are also good reasons why Yeltsin’s embrace of Western leaders was resisted. I also do think that, had the economy been better under both Gorbachev and Yeltsin, they probably would have been able to stabilise the system a little better; Putin was very lucky in having a good economy, high oil prices, and very, very savvy PR people. Of course they tapped into something, but the fact that what they wanted to do was to tap into, I would say in some ways the worst—the worst parts of Russian history…why isn’t there more done about Catherine and Peter? There are other things in Russian history. What happened to the notion that the first great Russian state was Veliky Novgorod? They could build on this, right? I mean Veliky Novgorod was part of the Hanseatic League; there are the trading arches right there across from the church in Veliky Novgorod.

So I don’t really buy that this is what the Russians want, any more than I think that we can say there’s no impact on us of state PR. Just look at the debates in the United States, perhaps in Britain too, in the run-up to the Gulf War and the invasion of Iraq. PR is important. And if at the same time as you have PR you take away freedom of the press, then you have some real power. And I think they’ve used Dugin; they’ve turned him on, they’ve turned him off, right? And he’s currently on again. And that’s of course of great concern.

Lord Risby
Lord Truscott.

Lord Truscott
Thank you chairman. Professor Dawisha, I haven’t read your book yet, but I will do. I think you say in your book—Peter Truscott, House of Lords by the way—I think you say in your book that Putin is personally very wealthy, and obviously there have been rumours and allegations swirling around for a long time that he is personally very wealthy. Do you document in your book any of the sources, perchance?

Karen Dawisha
I don’t think—I don’t think we know. I think there are many people working on that. Inside and outside government. So we have really two major things that happened as regards announcements of his wealth. On was the [Stanislav] Belkosvky statement in the—just before the 2008 elections—saying that he had 40 billion, and naming the percentage breakdown of which companies he had investments in and so forth. Now, what’s interesting about that is that, you know Belkovsky is currently very pro-[Mikhail] Khodorkovsky, but in 2007 he wasn’t. And was very close to the regime, so why did he do that, and on the basis of what kind of information?

Then last summer, after the sanctions were announced in the United States and of course in the UK too, the New York Times ran an article saying—quoting an unnamed intelligence officer in the US government—saying that at the time of the Belkovsky revelations they had done their own assessment, as I’m sure the British government must have, and felt that that was in the ballpark. So the thing that’s important is that Western governments believe this to be the case, and are acting—the sanctions are acting—with the assumption that his interests could be hurt.

So I don’t think I have the information. If I had I’d certainly publish it, but I don’t have it. But I do think that when you have a Foreign Secretary saying on a television interview–I personally didn’t believe it but I would love to be proved wrong—that if things got any worse that the British government might start broadcasting to Russia in Russian the details of Putin’s wealth, well, okay. So hopefully it won’t get any worse. But it’s clearly a very interesting and deep game being played, being played in terms of, you know, understanding that there’s somebody at the inside of this circle and moving around the outside of the circle with sanctions. I think that’s really what sanctions are about.

Lord Risby
Thank you. Gentleman at the back.

Question 7

Karen Dawisha
Are Russian banks too big to fail? [Laughter] Well if ours are, theirs certainly are. Not least because they are as close, if not more close, to government than our top bankers are. So I’ve no doubt that the last drop will be given to them before the social sector.

I think there’s a high degree of unreported unemployment in Russia. It’s not a subject that is allowed to be discussed in the open Russian regional press, and so it’s very touchy. But when you have the governor of one the Russian regions where the teachers went on strike because they hadn’t been paid for four months, chastising them—of course we’re talking here about primary school, young women on the whole—chastising them and saying, you know “how dare you do this? Under Stalin nobody would have stopped working because they didn’t get paid.” Are we really in a situation where a governor can say that this is acceptable?

So the economic situation is I think much worse than could be reported in the Russian press, and I think this is also why we’ve seen the beginning of some—there are some indications of preparations for greater repression. And I hate to say that, but the arrest of certain people, the criticism and then dismissal of the head of the prison services—why do that if you’re not getting ready for something? The appointment as Deputy Minister of Internal Affairs of Viktor Zolotov, personally very close to Putin—actually had been senior to Putin in the KGB, and had been his personal bodyguard from the mid-2000s, sorry from the mid-1990s, in St Petersburg as a private individual, and then his personal bodyguard for the first fourteen years of his presidency. And then moving him over to take charge of all the internal riot police throughout the country, this is just a very ominous signal.

I would say also, I know it’s a very touchy subject, but what I believe to be the signalling of an alliance between Zolotov, [Vladislav] Surkov, who, with Pavlovsky, is one of the PR people and was in charge of suppression—he would say management—of the opposition who was then let go and has come back as somebody in charge of Ukraine. So you have Zolotov, Surkov, and [leader of Chechnya, Ramzan] Kadyrov, along with certain regional leaders of the Cossacks. The idea that the President has access to what we could call an extended Brown Shirts operation, is extremely worrying. And I think very much bound up in my opinion with the Nemtsov murder.

Lord Risby
This lady here.

Susanne Sternthal, Research Fellow at the Russia Institute of King’s College London
Thank you. My name is Susanne Sternthal, I’m a visiting research fellow at King’s College London’s Russia Institute. I’m wondering if you could speculate to what is Putin perhaps concerned about the staying power of this regime. And I was thinking specifically in light of the three pressure points that you had mentioned internally, especially the last one—and that is of the people or society at large. The Levada Centre consistently has tracked, there has consistently been sort of a hotpot in terms of gauging where things are vis-à-vis the government and the population, house prices, and rising poverty levels. And that is the number one thing that they are all very terrified of.

And of course I read just recently that the poverty level has doubled since a couple of years ago. So, do you think this keeps him up at night at all?

Karen Dawisha
I mean, well, according to his interview with Corriere della Sera, he’s absolutely faultless and looking forwards to a wonderful time in the afterlife. Who says that, by the way? [Laughter] What is Putin worried about? I think Putin is worried about going to jail. He is quoted as saying in the late 90s, when there was the struggle on for his presidency and he was still fighting against [Yuri] Luzhkov and [Yevgeny] Primakov, that “we know how this will end. They’ll send us to the wall, and there’s no other way this can end.” And I think this point of view has to now be even stronger than it was in 2000. He had a way out, and chose not to take it in 2008. So what does he believe is the transition? What does he believe is the transition? Who is it? Who could do for him what he did for Yeltsin? Who is that?

And one of the things that was very interesting to me was a series of statements that Sergei Ivanov has made in the last two or three weeks. Now, Sergei Ivanov was trained with Putin in the KGB, in counter-intelligence; they were classmates. But was promoted ahead of Putin—he was again senior to Putin coming into power. And he has had his portfolio changed at Putin’s will time and time again.

I was present in a room slightly bigger than this, as all Russian officials rooms are, with much more gold, for one of the Valdai [International Discussion Club] events where we were all sitting and waiting for Sergei Ivanov to arrive in 2007, when it was announced that not Ivanov but someone else was going to become prime minister; he was walking into the room when this was announced. So all of the correspondents who were in that room from the BBC, the Observer, the Guardian etcetera, were of course already writing their questions, and their articles, about the new prime minister. And that’s all they wanted to know. And Ivanov had to sit there and be the good shepherd for the Putin regime. And he did it absolutely well.

But in the last couple of weeks, what did he say? He said “I don’t understand why people think that everybody from St Petersburg is correct.” That’s quite a shocking statement. He said “I know five people who I would vouch for. Two of those people, [inaudible] and [Sergey] Lavrov are not even from St Petersburg, and one of the five people [inaudible] is certainly not corrupt.” So it’s very interesting that this issue of corruption is something that there are people inside who are quite worried about. And I think that that is something that keeps Putin up at night.

Lord Risby
Professor can I just ask the last question, because we will have to leave the room in a few minutes? I remember a very wise Israeli saying to me when we were talking about Syria: “what is really the purpose of the Russian involvement?” I tried to help the Syrian opposition and they could never have any kind of interface, and everyone in the West [inaudible]. This particular Israeli said “well of course, the thing about Russia is they wait to hear what the American point of view might be, and then simply do the opposite.” Now, I chair the British Ukrainian Society, and what we all know about each other’s countries is that we can never escape our geography—this is a huge difficulty.

And I just wonder, you know, you’ve painted an absolutely fascinating picture of the internal dynamic within the Kremlin, but how externally, given that Russia holds some very some very important situations vis a vis Syria, Ukraine…how one tries to gild this?

Karen Dawisha
Yes. Well, Russia—I actually did my PhD at LSE on Soviet relations with Iraq, Syria, and Egypt, so that relationship is very long standing, and there isn’t a single member of the Deuxieme Bureau [aka the Military Intelligence Directorate, or Mukhabarat] in Syria who was not trained in the Soviet Union. It is an absolutely critical part of Russian identity, and the identity of the Syrian regime, that this is an alliance that was built from the ground floor for more than fifty years. Fifty years. And it’s something that they’re quite proud of. And of course it’s their only base in the Mediterranean, and since the Brits and the Americans think about their bases we shouldn’t imagine that they [Russians] don’t, and that this is a minority regime in Syria, and its sustainability over time depends on external support. It can’t do it alone; the Alawites can’t rule without the Russians. At the end of the day which ships do we imagine the Alawites will get onto, and where will they go?

One hears lots of rumours, but I think it is possible that Assad’s money is in Russia, and it may precede his own departure to Russia at some point. So there is a long game that has been played, and keeping that going, and remembering that Putin and the people around him regard themselves as heirs of the greats like Drozdov, Yuri Drozdov, who was the head of counter-intelligence, who was the head of the operation to invade—the head of the operation to kill Hafizullah Amin in Afghanistan, and who then brought those forces into a repressive role in Russia as head of OMON [the Special Purpose Mobile Unit, a Russian paramilitary organisation] and Spetsnaz.

So Beslan [the school siege of 2004], Nord-Ost the Moscow theatre hostage crisis of 2002], they go all the way back to Afghanistan. There is a continuity of tradition in the Putin regime, and it does go back to [Yuri] Andropov—that’s I think very important. We need to understand it.

Lord Risby
Well I think, ladies and gentlemen, that we’ve heard the most fascinating insight into this particular individual. And I greatly admire the way, if I may say Professor, it shows how welcoming your students must be at university because you’ve done this completely logically and sequentially as you explained this in a very, very clear way. And given the importance of Russia for all the reasons you’ve just been talking about, not only internally but externally, I think this has been the most remarkable insight, which all of us are going to remember. So we also thank you for the comprehensive way you answered the questions.

So I’d like to thank you, and also thank everybody else again for the way The Henry Jackson Society has managed to get you here to talk about this fascinating subject. I think I may go and reflect very intensely, as I’m sure we all are, on what you had to say, and this is going to be the top read for the weekend.

Thank you very much indeed.


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