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Johnson's Russia List


September 5, 2000    
This Date's Issues: 4493  4494  4495



Johnson's Russia List


6 September 2000





SEPTEMBER 12, 2000


Vladimir Putin, Russia's new president, won the admiration of his people

for his iron grasp on power. Then came the Kursk submarince crisis. Will

the Kremlin's mystery man be able to rein in a massively corrupt

oligarchy, or will he wake the ghost of Stalin?



The muddy lot in a working-class section of St. Petersburg is filled with

debris and gives no hint of the city's shabby grandeur. But housed there in

a beat-up building behind a turbine factory is the sports club that helped

form so much of Vladimir Putin's discipline and character. For 15 years

Anatoly Rakhlin, a slight, tautly muscled man with Bozo-the-Clown white

hair and penetrating blue eyes, trained "Volodya" to become a champion in

sombo and judo; Putin and his team traveled all over the Soviet Union.

Sombo, a Russian acronym for "self-defense without weapons," is a mix of

judo and wrestling that caught on when Putin was growing up in the mid-60s.

It places a premium on quick moves, calm demeanor, and the ability to keep

from showing emotion or uttering a sound, no matter how intense the

struggle or the pain. Putin, a laconic, inscrutable introvert to the world

and a wry charmer to his intimates, seems to have learned sombo's lessons

well. On one wall of the sports club, Putin's sad teenage face stares out

from an old lineup of the club's "Masters of Sport," the Russian equivalent

of all-stars.


Clearly, Putin, then as now, was not only calculating but also a risktaker.

Although he was barely five feet seven and competed in the lightweight,

135-pound category, he was Leningrad's judo champion in 1976, and he would

take on teammates twice his size. "He could always fight against me," says

316-pound Slava Okumen, "even if we were in different categories." (Okumen

was only 246 pounds back then.) "He could throw me. His will to win was

superstrong." Some of Putin's contemporaries still come back to the gym at

night to wrestle, sweat in the sauna, and tell stories in the coach's

office, which is filled with rags, old tires, and decrepit athletic

equipment. Coach Rakhlin explains, "Volodya was not a wrestler of

physicality, but more of intellect-a smart wrestler. He always did the

unexpected, because he was versatile, very strong, so the speed of the

fight was intense."


The quality the coach most remembers Putin for, however, was his loyalty.

And loyalty is what has catapulted Vladimir Putin through the ranks, from

an obscure, disillusioned K.G.B. lieutenant colonel home from Germany in

1990 to deputy mayor of St. Petersburg, to a series of increasingly

powerful posts in the corrupt Kremlin of Boris Yeltsin. (Think Robert

Duvall as the consigliere in The Godfather.)


During Putin's first four years of training, Rakhlin had to change the

club's location five times in the sprawling city. Other kids dropped out,

but not Volodya, who had to travel long distances on the trolley. The only

child of what Rakhlin calls poor working-class parents, Putin stuck with

the coach, even when he was studying at Leningrad State University, where

he was pressured to be on the university teams, and later as a young K.G.B.

officer, when he was practically ordered by university authorities to join

the police club. According to Rakhlin, "The best wrestlers come not from

talent but from dedication to sport. Volodya was dedicated to sport and

loyal to his coach."


Last December 31, Boris Yeltsin-in a brilliant tactical move-resigned

unexpectedly and made Putin, who was then prime minister, his successor,

thereby forcing early elections in March. Putin, one of whose first decrees

as acting president was to absolve the vulnerable Yeltsin of any

prosecution after he left office, got 52 percent of the vote. The campaign

was designed as a clever series of macho photo ops in which Putin said

almost nothing but proclaimed a "dictatorship of the law," while the

state-owned media mercilessly slandered his opponents.


On May 7, the day of Putin's inauguration, Anatoly Rakhlin was outside

Moscow at a tournament, but the next day the Kremlin tracked him down the

moment he registered at a hotel in the capital. Rakhlin was picked up in an

official car and whisked in his sweats to the inner sanctum of the Kremlin,

to have lunch alone with the exhausted new president of Russia in his

private dining room. "I was with him 15 years. His mother died, his father

died. I am a second father."


Rakhlin tried to relax Putin by "speaking of nothing. I told him how to

take care of his knees." Then, because Rakhlin wanted a signed picture and

the president didn't have one, they drove over to Putin's old prime

minister's office, which he had not yet vacated. Rakhlin got his picture,

of Putin in judo clothes, and it now hangs in his gym. Later, Rakhlin was

told to inform the president's secretary anytime he got a request for an

interview. By then Rakhlin and I had already met.


He tells me that Putin confided to him that the hardest part of his job was

meeting so many "simple" people during his travels outside Moscow. "He told

me they just complain or cry because they live so badly," Rakhlin says.

"They can't believe they are seeing the president, and they hope he can

make their lives better, because they are so miserable. It's getting to him."


At the Okinawa G8 summit in July, Putin capped an impressive first

appearance with the heads of state of the world's leading industrial

nations-one of his suggestions was that they should start E-mailing one

another-by visiting a Japanese judo club and pinning a young opponent, whom

he then invited to throw him. He told reporters that his favorite judo move

is the deashibari, a swift attack which knocks the opponent off his feet.


Putin's instant popularity took Kremlin image-makers totally by surprise

last fall, when, as the third prime minister Yeltsin had appointed in two

years, he took full responsibility for waging a bloody, brutal war on

Chechnya, which has leveled Grozny, the capital, and left untold thousands

of civilian casualties. Putin considers the conflict in Chechnya a

terrorist civil insurrection and says that "Chechen bandits" are the shock

troops of a fundamentalist Muslim drive to deprive the Russian Federation

of vast stretches of territory. His efforts to demonize Chechens were aided

by the fact that many Muscovites believe downtown Moscow is controlled by

the Chechen Mob. After highly suspicious "Chechen terrorist" apartment

bombings in three Russian cities last fall, in which about 300 civilians

were killed, Putin's ratings soared, though there's little evidence that

Chechen terrorists actually carried out the bombings. "Military activities

in the Caucasus always bring down popularity ratings," says Kremlin

political consultant and manipulator Gleb Pavlovsky. "It was the miracle

that Putin brought into reality. We didn't expect that at all!"


Putin, who Pavlovsky says was being "tested by Yeltsin," was a revelation.

Yeltsin's "Family," or inner circle, intent on managing the succession and

maintaining its tainted power, had been plotting the post-Yeltsin era

almost from the day of Yeltsin's 1996 election (Pavlovsky calls it "a sort

of Manhattan Project"). They secretly polled to find out what kind of

person the Russian people considered heroic. Suddenly, right under their

noses, they realized that in Putin they had a Stirlitz, the dashing

fictional K.G.B. officer who is the hero of a popular old film, an

undercover agent in the SS in Germany in World War II, who embodies Russian

ideals. They immediately launched a campaign to turn Vladimir Putin into

another Stirlitz. They created an ideology-free political party called

Unity, and came in second to the Communists with 24 percent of the

parliamentary electoral vote.


The Stirlitz campaign revealed to Pavlovsky how Putin could overcome the

dual handicaps of coming from the K.G.B. (not exactly consonant with

democratic reform) and being handpicked by the despised Yeltsin. "For an

intelligence officer it was easy. He had the alibi: he's hiding and in

secrecy awaiting orders.... Did he take part in reforms? Yes, but he was

Stirlitz, seen in the movie as working under SS cover, but he's not SS. Was

he seen at demonstrations? Of course not! He is Stirlitz and not supposed

to be seen there. And here we are reaching the paradox," Pavlovsky

continues. "But Yeltsin named him as successor, and Yeltsin was hated by

the whole country. Yes, but he is Stirlitz, and he earned Yeltsin's trust

so well that even Yeltsin counts on him! That was a very deep mechanism."

Pavlovsky adds, "Of course, power should be in a way mysterious and magic.

Especially in Russia. Putin answers that need perfectly."


Meanwhile, the opposition did its part. According to Pavlovsky, "They were

conducting an anti-Yeltsin campaign only. They started to truly believe

their propaganda, that Yeltsin is some sort of maniac who is entertaining

himself by changing prime ministers, that he is not solving a rational task

of searching for a successor. Our hope was that they would be thinking of

Putin as another fatal mistake of Yeltsin." They were. "When Putin was

superpopular, they called themselves his enemy-total stupidity!" The

strategy played out perfectly. "When we understood everyone was thinking

the way we wanted them to, psychologically we began to drink champagne,"

Pavlovsky crows.


After the parliamentary elections on December 19, "which were really

presidential elections, because people came to vote for Putin, we

understood we couldn't hide Putin anymore." Had Yeltsin not taken himself

out early, "that would have forced Putin to position himself regarding

Yeltsin and Yeltsin's past." But after Yeltsin resigned on December 31, "we

understood that we had one or two months for Putin to become stronger and

stronger as the head of executive power."


The image-makers poured it on: Russians saw Putin distributing hunting

knives to Russian troops at the Chechen front on New Year's Day, Putin

using crude prison slang to say how he'd deal with Chechen guerrillas

("We'll ice them while they're shitting in the outhouse"), Putin flying a

two-seat military jet. "Putin demonstrated all the time he can do things,"

says Pavlovsky. "He showed that as a secret intelligence officer he is able

to handle weapons, the jet." The Russian populace, humiliated by the loss

of the first Chechen war in 1996 and the loss of their status as a

superpower, and weary of the ubiquitous corruption in the government and

the downturn of their economy, yearned for a young, vigorous leader they

could be proud of-someone who would restore law and order and show who was

boss. Democracy was almost a secondary concern.


Until the tragic sinking of the Kursk nuclear submarine in August, when 118

men perished and Putin failed to come home from his Black Sea vacation to

provide leadership in the crisis, the new president had been consolidating

his power at a dizzying rate. He had managed to scare and offend many of

the elite while keeping his approval ratings high. He had cut a deal with

the Communists in the Duma, the Parliament's lower house, to share power

with his Unity Party, and he seemed to be getting almost everything he

wanted. Even now he is moving toward a two-party system of Unity and the

Communists. More important, he has divided Russia into seven federal zones,

each with its own administrator, a move designed to rein in Russia's 89

elected regional governors, many of whom are corrupt in forging deals which

bypass the national government. What is alarming to many observers both

inside and outside of Russia is that five of the seven administrators are

former generals from the military or security forces. Echoing fears that

the security forces are in the ascendant, human-rights activist Yelena

Bonner, widow of the famed dissident Andrei Sakharov, says, "I believe [the

K.G.B.] would never allow anyone to leave the zone of its influence.

Physically you can resign from this organization, but mentally and

professionally Putin will never get out from under their influence."


Putin has gotten legislation passed to expel the governors from automatic

membership in the upper house of Parliament and to strip them of their

office if they have been found to break the law. They now have to return

much more tax revenue to the federal government. The Parliament will be

further weakened by the establishment of a new "state council," predicted

to take over many key parliamentary powers traditionally held by the upper



With a team of liberal economists, Putin has also introduced a new

supply-side economic plan for Russia, featuring a radical tax-reform

package to attract Western investment, the cornerstone of which is a

simplified flat tax of 13 percent to encourage the wealthy to pay at least

something. But there are also more punishing tax hikes on gas, vodka, and

cigarettes, and the worst is supposedly yet to come this fall when the

government reduces utility and housing subsidies. But with the sinking of

the Kursk, and the bomb that exploded in a crowded downtown-Moscow

underground passageway a week earlier, the perilous nature of Russia's

security and military preparedness was brought into stark relief.


While the Russian press responded with more vigor than it ever had in the

past, and when public opinion suddenly demanded to be taken into account,

Putin-instead of displaying the reflexive instincts of an experienced

politician rallying his country at a crucial moment-behaved like a timid,

secretive Soviet bureaucrat out of the past: distancing himself, refusing

foreign aid for four days, allowing disinformation fed by the Russian Navy

about the fate of the sub to flourish. The long-term effect of the Kursk on

Putin's ability to govern will take months to assess.


Before the Kursk crisis, however, Putin's most controversial move had been

a clampdown on the opposition media with the arrest of one of the new

Russia's powerful oligarchs, Vladimir Gusinsky, chairman of the Media-Most

empire, which includes NTV, the influential television network, for alleged

fraud. Gusinsky says the charges are baseless, though Russia analyst

Dimitri Simes cautioned on The NewsHour with Jim Lehrer that Gusinsky is

"closer to Meyer Lansky than a real democrat." The government says he

acquired a controlling stake in a lucrative TV station for $5,000 after the

official in charge of the sale allegedly received a payment of $1 million.


In July, after strong negative reaction at home and abroad, the charges

were suddenly dropped, and rumors abound that a deal was struck to have

Media-Most sold and put under state supervision, but NTV officials deny it.

Igor Malashenko, the number-two man at Media-Most, warns, "Putin's

consolidation of power is very simple: it's to put everything under his

control. He doesn't believe in a system of checks and balances. Any checks

and balances are a nuisance." Putin's government appears to be serving

notice that rogue elements will be forced into compliance.


Gusinsky's case was extreme but not isolated. Freedom of the press remains

a very sensitive issue. Last winter, Putin was widely criticized for

defending the Russian troops who kidnapped Radio Liberty correspondent

Andrei Babitsky, a vocal opponent of the Chechen war. Pavel Felgenhauer,

Moscow Times columnist and Radio Moscow commentator, says, "I know from the

inside there is no free press. The press here is either distorted, not

published, or told what to write."


The Russian press and Internet thrive on kompromat, "compromised material,"

which is usually bought from underpaid government security-force employees

or former security agents who wiretap, intercept E-mail, and tail. Phone

tapping is believed to be more widespread today than in Soviet times. In

fact, Gusinsky was accused of having a private security force-all the

oligarchs do- which engaged in massive wiretapping, and indeed a former

K.G.B. general, Philip Bobkov, now gathers and analyzes information for



Most oligarchs don't even bother to deny how ill-gotten their fabulous

fortunes are, and Putin has begun to move against several of them,

declaring, "All should be equally distanced from power." Whether he will

carry out his threats, merely use them as leverage, or is staging a P.R.

stunt for the benefit of the masses remains to be seen. Last July, Putin

assured a group of nervous big-business men that he was not going to

overturn their unscrupulous privatizations of state-owned companies. "You

built this state yourself to a great degree through political or

semi-political structures under your control," Putin said bluntly, "so

there's no point in blaming the reflection in the mirror."


"Imagine a prison," Alexander Starkov, one of the major real-estate

developers in Moscow, tells me. "You cannot live in prison with the laws of

a free life-you have to live with the laws of the prison. We in Russia all

live in one big prison."


Putin has also launched into a frenzy of diplomacy with the Vatican, China,

and North Korea, and his highly publicized visits with Tony Blair in

Britain and Gerhard Schroeder in Germany pointedly indicate that he is

seeking to ally Russia with Europe rather than with the United States.

Since his inauguration, Putin has met twice with President Clinton, at the

U.S.-Russia summit in Moscow in June, and in Okinawa at the G8 meeting in

July. This month the two men will meet again for the United Nations

Millennium Summit in New York.


I was sitting in the front row during the signing ceremony at the Moscow

summit, watching Putin, who is all one color, a kind of yellowy beige,

slump in his seat in the newly restored St. Georges Hall in the Kremlin and

absently drum his fingers on the table while a tired-looking Clinton read

his notes about the summit's "successful" conclusion with a joint agreement

for each to destroy 34 tons of plutonium intended for nuclear warheads.

Several hundred journalists present were confined to four questions and sat

like props at a photo op. Putin had spoken without notes, yet unlike

Clinton or Yeltsin or Gorbachev, with their obvious charisma, he would

never have been the one picked out by an observer as the group's natural



A few hours earlier I had witnessed Putin greet the U.S. delegation before

sitting down to negotiate-he presented a bouquet to U.S. ambassador James

Collins for his birthday and greeted Clinton in English. Deputy Secretary

of State Strobe Talbott, who was a Rhodes scholar at the same time as

Clinton and has had wide latitude over U.S.-Russian relations since his

friend's election, hobbled in with a cane, a result of knee surgery.

Clinton playfully pointed to three little monkeys Secretary of State

Madeleine Albright had pinned to her lapel, and said, "'See no evil, hear

no evil, speak no evil'-that's Madeleine's entire foreign policy." Putin

smiled politely. This was definitely not Boris and Bill poking each other

in the ribs to share yet another joke.


St. Catherine's Hall, where the meeting took place, was a vision of

imperial opulence. These luxurious rooms were also a testament to the

Mabetex scandal, named for the Swiss contractor responsible for the

restoration, who stands accused of bribing Yeltsin's Family with, among

other things, credit cards. Yuri Skuratov, Russia's general prosecutor

(attorney general) from 1995 to 1999 and a candidate for the presidency,

had urged Swiss authorities to search the contractor's office, and for

that, he told me, he was removed from office. The Family panicked, fearing

that the Swiss-who were building a substantial case-would uncover their

secret bank accounts. Soon after, a videotape of a cavorting threesome

alleged to be Skuratov and two prostitutes was aired on state television.

Skuratov denied it was he.


Putin, then head of the Federal Security Service (F.S.B.), successor to the

K.G.B., had already crossed swords with Skuratov in 1996, when he went

after Putin's former boss Anatoly Sobchak, then St. Petersburg's mayor, for

corruption. Sobchak fled to Paris. Skuratov says Putin was present in the

hospital room when an ailing Yeltsin demanded Skuratov's resignation, which

he at first refused to give. Skuratov tells me, "I am very pessimistic for

the rule of law in Russia-because I know the real situation. Respect for

the law was never a requisite for Russia." Skuratov found it "a very

powerful symbol" that one of the first presidential decrees Putin signed,

to pardon Yeltsin, "contradicted existing federal laws and the Constitution."


At the Moscow summit, Putin declared that "the United States is one of our

main partners." He said, "One would hope that the very worst of our

relations is far, far behind us." Nevertheless, Putin is currently

exploiting a wedge issue, the United States' proposed recasting of the

failed Star Wars project-breaking the 1972 Anti-Ballistic Missile Treaty to

build a new nuclear shield in order to guard against missiles from

so-called "rogue states." George W. Bush favors such a plan; Clinton said

he would decide this fall if testing to construct such a system should

continue. After being ignored by the United States for proposing that the

two countries join forces in such a plan, Putin, who pleased U.S. officials

by finally getting the Start II Treaty ratified in the Duma, is now the

leader of the opposition. His analysis at the G8 of his visit to North

Korea's leader, Kim Jong-il, in which Kim told him he would give up his

plans to build missiles with warheads if others would help North Korea

launch its satellites, was pronounced "brilliant" and "impressive" by

several heads of state, who think that if the U.S. plan goes forward a new

arms race will start. A month later, however, the mercurial Kim told South

Korean media that the idea was "a joke."


Ordinary Russians, who aren't used to a sober leader who works out every

day and drinks Diet Coke, much less one who gets heady praise from other

world leaders, have mostly applauded Putin. Nevertheless, with his swift,

unexpected moves, the president has been keeping friend and foe alike

guessing as to what his real motives are. Will the mysterious Mr. Putin

ultimately save a weak Russian state by becoming a latter-day Pinochet? To

what extent will he remain the captive of the evil Kremlin Family, which

put him in power, the very people who had made a Faustian pact with the

oligarchs, handing them vast parts of the country's resources in exchange

for the means to re-elect Yeltsin in 1996? Will he wake up all of Stalin's

ghosts with the siren call of the

newly energized state security services?


If Putin doesn't succeed, Russia, already off its feet ethically,

economically, and demographically, will be in real danger of being

decisively knocked out. "The real threat to Russia is to implode,"

Malashenko told me. "The government cannot collect taxes or maintain the

armed forces-it's all falling apart." At the same time, nationalistic

fervor is being reasserted. According to Malashenko, "They want to restore

Russian grandeur militarily; they don't understand how bad the situation

is. They don't understand Russia may be disappearing as a viable nation."


To save her, Putin will need more than judo. He'll need voodoo.


Two out of three Russian men die drunk. It doesn't matter if they die of a

heart attack or in an accident or as a murder victim or a suicide; they are

drunk when they die, mostly on a Monday after a binge weekend. The life

expectancy for Russian men is 58.8; for women it's 71.7. (In this country,

it's 72.9 for men and 79.6 for women.) Only 10 to 15 percent of Russian

babies are born healthy. Approximately two-thirds of Russian pregnancies

end in abortion; at least 75 percent of pregnant women have serious

pathologies. "It's horrendous," says Murray Feshbach, Emeritus Research

Professor at Georgetown University, who is the leading U.S. authority on

Russian demography. "Anemia during pregnancy has quintupled during the last

decade. The syphilis rate among young females from 10 to 14 has gone up

roughly 40 times since 1990-that really means 10- to 14-year-olds who are

doing drugs and having intercourse. Among 15- to 17-year-old males, only 10

to 30 percent are healthy." Feshbach also has shocking statistics on the

environment in Russia today. One recent health minister, he says, "issued a

list of 13 Russian cities where he advised the population, 'It doesn't pay

to go outside.'" Meanwhile, in May, Putin abolished the State Committee on

the Environment.


Heroin addiction has exploded in Russia in the last two years. Heroin from

Afghanistan is cheaper than marijuana. As a result, Russia has one of the

fastest growth rates of H.I.V. infection in the world, up more than 350

percent between 1998 and 1999, spread mostly by dirty needles. An estimated

300,000 to 500,000 are infected with H.I.V., and there is no way the

collapsed health-care system can provide for them. In England, The Guardian

reported in May that only 13 percent of the youths conscripted for the

Russian Army actually show up, and of those, according to the Committee of

Soldiers' Mothers of Russia, an advocacy group, about 1,000 commit suicide.

Their pay is less than $2 a month. More than half of the Russian people

live below the poverty line, with incomes that are 40 percent lower than in

1991. "For Russia, to restore a sense of national pride, you must think

about things as mundane as living like a human being," former prime

minister Sergei Stepashin, who is now head of the State Audit Chamber, told

me. "The average Russian pension is $25 a month."


"We are in danger of becoming a senile nation," Putin told the country in a

forceful first State of the Nation speech in July. "It is difficult to

live. Year by year, we, the citizens of Russia, are getting fewer and

fewer. If this continues, the very survival of the nation will be under

threat." That was the first time a top Russian leader had spoken publicly

about this issue. The fact is, some 800,000 more Russians are dying per

year than are being born. One member of the Duma's Parliamentary Committee

on Health glumly predicted that by 2025 the population, currently at 146

million, will be down to 100 million. "The situation is apocalyptic," says



Meanwhile, filthy-rich Russians have replaced Arabs as the most conspicuous

consumers in the chic watering holes of Europe. In the last decade, an

estimated $300 to $500 billion has been siphoned out of Russia into

offshore companies and foreign banks. In the summer of 1999, for example,

Vladimir Posner, the Russian broadcaster, witnessed the "baby billionaire"

Vladimir Potanin, who was 36, sailing a 250-foot yacht into Nice "with a

bevy of Russia's most stunning models, and the money flowed like the

champagne." He added, "The Russian people would love people to go after

these guys." And the oligarchs know it. After Putin's tax police arrested

Gusinsky, 18 of the country's top tycoons wrote an open letter to the

president: "We have no doubts that the law-enforcement authorities could

have serious questions concerning his activities, as can be applied to any

substantial and successful businessman in Russia." Indeed, Potanin, the

founder of Oneximbank, now stands accused by the government of underpaying

$140 million in the privatization of the gigantic Norilsk Nickel.


"How shall I explain to my readers," I asked a leading Russian oligarch,

billionaire Mikhail Khodorkovsky, 36, the chairman of Russia's

second-largest oil company, Yukos, "how a handful of men in your country

ended up with 30 percent of one-seventh of the entire world's resources?"

Khodorkovsky is also the former chairman of a failed bank, Menatep, whose

depositors lost hundreds of millions of dollars when the ruble crashed in

August 1998. He is featured in Robert I. Friedman's recent book, Red

Mafiya, because in 1995 the C.I.A. claimed that he was "controlled by one

of the most powerful crime clans in Moscow," and that Menatep "had set up

an illegal banking operation in Washington," a vast money-laundering scheme

connected to offshore companies in the Caribbean. Khodorkovsky denies the



With a straight face, Khodorkovsky likens the situation in Russia to the

need in Silicon Valley to import skilled managers from India. "Chances are

you will not find personnel for a justifiable wage. It's a seller's

market." He explains that in Russia "there's a total absence of managers,

so somebody who was a skilled manager could pick and choose his company."

He makes it sound as if he had done the government a favor by taking a

two-million-barrels-a-day oil enterprise off its hands. Yet it has been

reported that the state accounting chamber charged Menatep with using

government money being held for other purposes, such as paying workers'

salaries, to make a sweetheart bid for Yukos in a less-than-transparent



Such auctions were part of the infamous loans-for-shares scheme designed to

help the cash-strapped Russian government pay its debts and speed

privatization. In the mid-90s, private Russian banks were given shares in

state enterprises in return for loans. These shares were to be held in

trust, and if and when they were turned into equity, the banks could bid

for them at auction. Many of the auctions were outrageously rigged.


"The loans-for-shares auctions were conducted according to the same

principle of clan tribute and cronyism that had reigned in Russia during

Soviet years," Matt Taibbi wrote in The eXile, a scathing expat alternative

newspaper published in Moscow. "The only difference was the scheme punished

the average Russian economically in a way that was much worse than the

Soviet system had.... By 1997, it was no longer unusual for employees of

companies like Norilsk to go six months to a year, if not longer, without

receiving their meager salaries. Russian newspapers even reported scenes of

people collapsing from hunger in the streets in the towns surrounding the

industrial centers." The beneficiaries of the auctions, naturally, were the

oligarchs' banks, says Taibbi.


Last February, while Putin was acting president, three Family-friendly

oligarchs-Roman Abramovich, a principal owner of Sibneft Oil, media mogul

Boris Berezovsky, acting through his company Logovaz, and a Siberian

magnate-ended up with more than 60 percent of Russia's multibillion-dollar

aluminum reserve in a questionable takeover that was found not to violate

the country's anti-monopoly laws. Berezovsky has been the pet Tyrannosaurus

rex oligarch of the Yeltsin Family, dark, voluble, cunning, a thoroughly

political animal who takes credit for getting Yeltsin elected in 1996, by

rallying other oligarchs to pony up millions to keep the Communist

candidate, Gennady Zyuganov, from winning, and also for getting Putin

elected in 2000, by discrediting Putin's opponents on the state channel

ORT, of which he owns a minority share. His rival, Igor Malashenko, claims

Berezovsky has a very simple principle: "If we have complete control of TV

and unlimited financial resources, we can elect anybody president." Yuri

Luzhkov, the mayor of Moscow and a presidential candidate, for example, was

eliminated from serious contention after being portrayed on state TV as a

corrupt murderer, which caused him to erupt at one point and cry,

"Berezovsky is Satan!"


Yevgeny Primakov, 71, the other leading candidate, who as prime minister in

1998 had wanted to put Berezovsky in jail, was depicted in the media as

being on his last legs. "You have to separate politics from human-rights

activities," says Berezovsky, who readily admits to me that the way

Primakov was treated was "immoral but legal. Human-rights protection

doesn't allow for immoral acts; politics does allow immoral acts." He adds,

"The actions of the team of which I was a part were totally rational within

the conditions and forms of law." "So the ends justify the means?," I ask.

"If legal, yes," Berezovsky replies.


Swiss prosecutors have frozen Berezovsky's assets in Swiss banks, and

accuse him of having misappropriated an estimated $700 million from

Aeroflot, Russia's national airline. At first, few believed that Russian

prosecutors would pursue him, but lately things have soured. Putin thinks

Berezovsky talks too much, and Berezovsky split with Putin over the

president's plan to strengthen the federal government's grip on the

governors, some of whom, according to Vladimir Posner, "sit deep in his

pocket." The government now appears to be going after Berezovsky's stake in

ORT TV, and it might use its leverage in the Aeroflot case to strike a

deal. Berezovsky, 54, a onetime mathematician, resigned his seat in the

Duma, which provided him with immunity from prosecution, and has spoken of

forming a party in opposition to Putin.


'We oligarchs believe in Russia," Berezovsky assures me in his "club," a

heavily guarded town house in Moscow, where he is surrounded by a white

grand piano, faux French furniture, a bar, and surveillance cameras. "Then

how come so many billions have gone out of Russia?," I ask. "Because in

Russia today there are no laws to protect capital." "Will Putin establish

those laws?" "I think so." Then he smiles. "It's not a fairy tale that

Primakov wanted to put me in jail, but it is a fairy tale that Putin does."


In many ways Berezovsky echoes Khodorkovsky in declaring that he deserves

his riches because, unlike his colleagues during the early perestroika

days, he was willing to take a risk. "The Russian people have a slave

mentality," Berezovsky declares. "They didn't believe in new developments.

We [oligarchs] are rational to spend less energy and get more profit, and

if the state would have formulated other rules, we'd fulfill those....

[But] the legal system is inadequate and incomplete for business reality."


I am curious to know to what extent Berezovsky understands how he is

viewed. "In the West you are perceived as a caricature of an oligarch, a

crook and a clown," I inform him. "Why would you want that reputation for



"There are two reasons why not only me but Russian business has a bad

reputation," Berezovsky replies. "First, the revolutionary transition

Russian business has undergone gave birth to colossal corruption, and the

cause is the historically unprecedented redistribution of wealth. In 1990

everything belonged to the state. By 1997 almost 75 percent of the property

was held privately. The redistribution of property was in the hands of

bureaucrats who made salaries of $100, $200 a month. And with a single

signature ... " He trails off, then adds, "I am sure there are no corrupt

American bureaucrats. There wouldn't be many bureaucrats who in the same

situation would refuse bribes."


"So many millions of people have suffered because of policies you've

perpetrated," I say. "Don't you feel bad about that?"


"I don't feel bad about it, though I can't say I feel comfortable,"

Berezovsky replies. "Russia was grappling with the problem of transforming

itself into a new economic and political system. By any measure this would

be called a revolution, and the basis of such a transformation is always

the redistribution of property.... This was done without a civil war. The

way to judge whether a transformation was successful or not was that there

was no civil war."


Obviously, there is no love lost between Berezovsky and the

second-most-hated man in Russia, St. Petersburg economist Anatoly Chubais,

the chief architect of the loans-for-shares program. Before I met Chubais

in Washington, I spoke in Moscow to one of his top aides, Leonid Gozman,

who told me that massive privatization had been the only way to rescue a

floundering state that was in danger of going back to Communism. "Yegor

Gaidar [the prominent economist and former prime minister] and Chubais

saved the country. We had no bread or sausages. We were in the process of

losing everything." Premier Russia-watcher David Johnson, publisher of an

extensive daily E-mail digest of Russian news called Johnson's Russia List,

disagrees. "The Soviet Union was dead, the population had moved on, but

they wanted a bogeyman to legitimize their claim to power." Gozman told me

that, "certainly, we're a fantastically corruptible system," but that

America in its early capitalist days had its robber barons, too-"Carnegie,

the first Mayor Daley."


Whenever I hear that argument I think of the testimony that former C.I.A.

Russia chief of station Richard Palmer, who after retiring served as a

consultant to Russian banks, gave to the House Committee on Banking and

Financial Services in 1999. Palmer, who runs Cachet, an international

due-diligence-and-asset-recovery business, has spent a decade studying

Russian financial and organized crime. This is his chilling analysis of

what Putin faces in attempts to impose a "dictatorship of law."


For the United States to be like Russia is today, it would be necessary to

have massive corruption by the majority of the members of Congress as well

as by the Departments of Justice and Treasury, and agents of the F.B.I.,

C.I.A., D.I.A., I.R.S., Marshal Service, Border Patrol, state and local

police officers, the Federal Reserve Bank, Supreme Court justices, U.S.

District court judges, support of the varied Organized Crime families, the

leadership of the Fortune 500 companies, at least half of the banks in the

U.S., and the New York Stock Exchange. This cabal would then have to seize

the gold at Fort Knox and the Federal assets deposited in the entire

banking system. It would have to take control of the key industries such as

oil, natural gas, mining, precious and semi-precious metals, forestry,

cotton, construction, insurance and banking industries-and then claim these

items to be their private property. The legal system would have to nullify

most of the key provisions against corruption, conflict of interest,

criminal conspiracy, money laundering, economic fraud, and weaken tax

evasion laws. This unholy alliance would then have to spend about 50

percent of its billions in profits to bribe officials that remained in

government and be the primary supporters of all of the political

candidates. Then, most of the stolen funds, excess profits and bribes would

have to be sent to off-shore banks for safekeeping.


Yet even today, as Russia suffers with a mostly barter economy, where the

average wage has recently risen to $82 a month, Anatoly Chubais remains

Washington and Harvard's golden boy. Chubais, who accrued oligarch status

if not wealth in Russia for becoming synonymous with the manipulation of

U.S. aid and billions from the International Monetary Fund (I.M.F.), is

husky and genial and speaks good English. He is now head of United Energy

System of Russia, a vast electrical utility with more than 700,000

employees which is 34 percent owned by foreign shareholders, who have

recently challenged his leadership. Chubais, along with Yegor Gaidar,

Harvard professors Jeffrey Sachs and Andrei Schleifer, and Sachs's aide

Anders Aslund, is known for having been the driving force behind the

Russian-American aid program which advocated "shock therapy" to push a

market economy in Russia. Chubais had the run of both the Kremlin and the

Clinton White House, where Harvard graduate Vice President Al Gore was the

point man on Russian policy. The group's mentor was Treasury Secretary

Larry Summers, who had been an economics professor at Harvard and chief

economist of the World Bank. "The whole ideology for the privatization of

Russia was worked on American calculations," Yuri Skuratov told me.


Chubais's role in the U.S.-aid-to-Russia program has been incisively

dissected in a controversial paper by University of Pittsburgh professor

Janine Wedel, published in The National Interest: "The ideology, that of

radical privatization and marketization, applied in this instance in a

cold-turkey manner to a society with no recent experience of either, is

well known. The way in which advice and aid were given is much less

familiar." In June 1997, the U.S. Agency for International Development

suspended funding to the chief funnel for U.S. assistance, the Harvard

Institute for International Development, because two of its chief

executives, Jonathan Hay and Andrei Schleifer, were accused of using inside

knowledge and speculating in the Russian stock market through Hay's

girlfriend and Schleifer's wife. Until that point, Wedel charges, U.S. aid

to Russia was managed by a small cabal of Harvardites and a handful of

Russians-namely Chubais-whom they felt comfortable with. Approximately $350

million was managed by the Harvard Institute for International Development,

which, as Wedel says, left "it in the unique position of recommending U.S.

aid policies while being itself a chief recipient of that aid." Members of

the clique would often switch sides, with Americans helping to write

Russian proposals and vice versa, the result of which was exploitation and



"A very small group of people acting as one were able to use the

institutions at their disposal-the U.S. government, the Russian government,

even the I.M.F.-to further their own agendas," Wedel tells me. "The [U.S.]

economic-aid program has been a disaster largely because of this strategy."

Wedel's critics charge that her judgment is too harsh, that shock therapy

has in fact worked in Poland. Not in Russia, however.


"Don't give us any more economic advice," Sergei Karaganov, chairman of the

Moscow-based Council on Foreign and Defense Policy, said at a

Harvard-sponsored Washington seminar shortly before Putin's election. "It

will be D.O.A."


"I know the common understanding here in the U.S. of what Russia is,"

Chubais told me at a Carnegie Endowment lunch arranged by Stanford

professor and Carnegie senior fellow Michael McFaul. "Russia is corruption,

bribes, oligarchs, Mafia, murder. I disagree with that completely. This is

an extremely superficial understanding of the forces of change which are

fundamental to the revolution. If you go deeper, you need to see that the

absolutely fundamental institutions, which never existed previously in my

country, are now accepted." He listed freedom of speech, division of power,

democratic elections, private property, and the Russian Constitution. "The

fact that wages and pensions are being paid is a visible positive tendency

to the Russian economy and political life." In Putin's pre-election

manifesto, Russia at the Turn of the Millennium, he said that if the

Russian economy grew 8 percent a year (a fairly Utopian notion) for the

next 15 years it would reach the per capita gross domestic product of



When Volodya Putin was studying chemistry in a technical high school in

Leningrad in 1970, he already knew that he wanted to be a spy. He set his

sights on the law school of Leningrad State University, which would put him

on the path to the K.G.B., and he took extra courses in Communist ideology.

When one of his teachers announced that a pure Communist state would be

achieved by 1980, Volodya jumped up. "It's not possible. This is a lie.

Nobody believes this. Let's vote, guys. Who believes this?" "No one put his

hand up," says Raisa Sergeevna, another of his teachers. A lively woman

living on a $20-a-month pension in a tiny apartment not far from the

school, she pulls out a tattered file and shows that Volodya came in second

in the school paper drive for being "the hardest-working person."


"Volodya's father was very tough on him, but Volodya never challenged him,"

says Sergei Roldugin, Putin's close friend and the godfather of his older

daughter. A cellist with the Mariinsky Theater Symphony Orchestra, Roldugin

taught Putin about classical music and got his two daughters started on the

piano and violin. Putin's father, a factory worker and the son of one of

Stalin's cooks, had gone through a tough time in the war and was, says

Roldugin, "a member of the party, a strong believer. He hated democracy."

Volodya came to his parents late in life, after two other young sons died,

and so, says a classmate, Aleksandr Matveev, "he was like a light in the

window to them." When they won a car in a state lottery, they could have

sold it and lived off the proceeds for several years. Instead, Putin became

the only student at the university with a car.


At Leningrad State University, Putin, at 18, was younger than many of his

classmates, who had served in the army. Sports occupied a lot of his time,

and he passed up privileges by sticking with Coach Rakhlin and not joining

the university team. He was focused on his goals, disciplined, quiet, but

with a good sense of humor. His friend Leonid Polokhov, the outspoken,

piano-playing son of a Soviet general, recalls, "He told me he wanted to be

a spy, and of course I tried to talk him out of it." But Putin was

determined. "We had a pretty closed society," says Nikolai Egorov, of the

law firm Egorov, Pughinsky, Afanasiev & Marks, another close friend and a

former Supreme Court Justice of Russia, "so in the opinion of many Russian

people at that time, the K.G.B. was seen as a highly respected

organization, very difficult to get into, an honor." Pavel Koschelev, a

classmate and later a colleague, says, "We came to the K.G.B. to serve the



According to his K.G.B. officemate, Valery Golubev, Putin's work in

Leningrad was "gathering information from Russians with contact with

foreigners." "We were taught to be secretive," says Koschelev. "You could

not show your real emotion." Sergei Roldugin once asked Putin what he

actually did. "I'm a specialist in human relations-people, that's my

profession," Putin told him. "He never spoke of the K.G.B.," says Roldugin.

"The goal is to establish connections with people when they come to Russian

cities," says Golubev, who told me Putin's K.G.B. class studied Dale

Carnegie's How to Win Friends & Influence People.


According to Polokhov, after a few years in the K.G.B., Putin became

restless and wanted to go abroad. By 1985, when he was assigned to Dresden,

East Germany, where he recruited Stasi (East German secret police) and kept

tabs on German Communist political figures, Putin had spent considerable

time in training in Moscow. He had also married Lyudmila Aleksandrovna, a

stewardess from Kaliningrad, Russia's westernmost city. In 1985, they had

their first child, Masha, and in 1986, Katya was born in Dresden, East

Germany. German is their daughters' first language.


Lyudmila would fly to their dates in Leningrad. Outspoken and energetic,

she has devoted herself to providing a comfortable home for a husband who

often appears oblivious to time and place. Putin has always worked long

hours. Egorov told me he was once in their home when Putin came in and

Lyudmila asked him, "Did you eat lunch?" "I can't remember," he said. "Do

you want food?" "I don't know." "Do you need food?" "Yes, probably I do."


"Women like him," says Roldugin. "He has some kind of mystery. He knows how

to treat and take care of women."


When the Berlin Wall fell in 1989 and Russia did nothing to stop it, Putin,

like many of his colleagues, was stunned to see everything they had worked

so diligently for come crashing down around them. "Every morning, to go to

work and hear yourself be described as traitors," says Pavel Koschelev. "It

was worse than the collapse of your ideas and values. We had the feeling we

had been betrayed personally." Putin had been relatively nondescript in his

job, but the European press reports that shortly after Putin returned to

Leningrad, one of his recruits, a former Stasi police detective, gave

information to German domestic intelligence unmasking 15 East German spies,

thereby nullifying much of Putin's work and casting a shadow over him.

Putin says in his book First Person, a campaign biography, that he turned

down a more prestigious position in Moscow and opted to go to Leningrad,

where, as a K.G.B. lieutenant colonel on "active reserve," he took a job as

an assistant to the president of the university, responsible for

international liaison. He also pursued a Ph.D. in international law.


Through Egorov, Putin became reacquainted with Anatoly Sobchak, his

flamboyant former law professor at Leningrad State University, an early

conspicuous democrat, and the leader of the Leningrad city council. Sobchak

became the city's first mayor of the post-Communist era. When Sobchak asked

Putin to work for him in 1990, Putin disclosed that he was in the K.G.B.

"At first my husband was taken aback," says Sobchak's widow, Lyudmila. But

intelligence officers were considered "very reliable. So he said, 'Damn it,

it's O.K.'"


The risk more than paid off. As head of the Committee for Foreign Economic

Relations for the city, Putin soon made himself indispensable as a shrewd

detail man. According to former city-council chairman Alexei Belyaev, "He

became a real shadow mayor, because he signed all the decrees when Sobchak

was absent, and Sobchak was gone a lot." Though Putin shunned the media, he

soon became known as the "Gray Cardinal." Nothing got done without his

knowledge. "St. Petersburg was very open to American business entrepreneurs

who came to visit," says Philadelphia lawyer Jerome Shestack, who once held

the account for the city of Leningrad. "Basically they were all screened by

Putin in advance. His K.G.B. training came in handy." Other visitors

greeted by Putin ranged from Queen Elizabeth II to Ted Turner and Jane

Fonda, and more than once he translated when Boris Yeltsin met high-ranking

Germans in St. Petersburg. In 1996 he campaigned for Yeltsin.


One of Putin's duties was to look after Sobchak's feisty wife, whom he

accompanied to the U.S. twice. Once, they were in a small elevator in

Monaco with an elderly relative of Prince Rainier's. Mrs. Sobchak was

shivering in her backless gown. "'I know the points of the body to touch to

make it warm,'" the randy old nobleman said. "Then he bit me on my neck,"

Lyudmila Sobchak recalls. In Russian, Putin whispered, "You know, Lyudmila,

I'm lost. I have to defend your honor, but I can't take him and beat him

up, because he's the prince's relative." Just then, Lyudmila Sobchak says,

"the elevator door opened, thank God."


Putin got into politics at an auspicious moment. People were giddy with the

idea of democracy and capitalism, but most Russians were dancing in the

dark. Roldugin says that at one point Putin wanted to bring Augusto

Pinochet to St. Petersburg to question him about how he had achieved the

"economic miracle" in Chile, but the idea was dropped. Sobchak and Putin

had to feed a hungry city without the backup of the old Soviet Union, which

collapsed in 1991. "Sometimes he made mistakes about judgments of people,"

says Vatanyar Yagya, a chief adviser to Sobchak and a deputy in the St.

Petersburg legislative assembly who admires Putin. "Along with honest,

talented, and creative people came people with low, immoral interests....

There were newfound opportunities to take bribes and be corrupt."


The most publicized scandal Putin was involved in was a barter deal to sell

oil, wood, and metals for food in early 1992. Some $92 million worth of

materials left St. Petersburg, and just a few bottles of cooking oil came

back. Not only that, the contracts were made out for a fraction of what the

resources would bring on the world market-a scam used earlier by the K.G.B.

to spirit money out of the country for Communist Party chieftains in the

early days of perestroika. Putin became a target of investigation. Marina

Salye, the city councilwoman investigating him at the time, has documents

which show that Putin signed two irregular contracts. He was called as a

witness before the council and accused, according to the investigative

report, of "complete incompetence," but he was not accused of benefiting

personally. The council wanted him fired, but Sobchak refused. One problem,

says Belyaev, was that "there were no competitive bids.... He played like a

K.G.B. man in this situation-one face to one person, another to another."

Belyaev does not believe Putin took bribes, but he admits, "That was the

very beginning of the corrupt system." Today, St. Petersburg is considered

the most criminally infiltrated city in all Russia.


In 1996, Sobchak failed to be re-elected. Putin refused to work for

Sobchak's successor, Vladimir Yaklovev, a former deputy of Sobchak's. "He

said it would be better to be hanged as a traitor than to betray [my

husband]," says Lyudmila Sobchak. For three months Putin and Sobchak spent

their days together in Sobchak's dacha, grieving. Then, through his St.

Petersburg connections, Putin got a job in Moscow in the Presidential

Administration office. He was put in charge of the General Affairs legal

department and the privatizing of hundreds of millions of dollars' worth of

Russian property abroad.


Meanwhile, Sobchak got into serious trouble for the irregular privatization

of apartments in St. Petersburg-charges his wife calls "a smear." As

federal prosecutors were interrogating her husband on videotape, she burst

into the room, saying, "Anatoly, you have a bad heart." Sobchak immediately

announced that he felt sick and called for an ambulance. After being

shielded in a clinic for several weeks, he escaped to Paris in a private

jet. Putin called him regularly. Once Putin was installed as prime minister

by Yeltsin, he saw to it that Sobchak could return to Russia without facing

charges, and he wept openly at Sobchak's funeral last February. None of

these gestures of loyalty was lost on the Yeltsin Family.


Russian reporters have come up with other scandals that appear to have

involved Putin, but they are ignored by the presidential press office. If

these things are not on TV, they don't count. The most intriguing alleged

illegality had Putin giving money for the restoration of an Orthodox

nunnery in Israel from the mayor of St. Petersburg's "unforeseen expenses

fund." Journalist Vladimir Ivanidze, who with his wife, Agathe Duparc,

uncovered the Mabetex scandal, was vilified in a local St. Petersburg paper

for merely asking standard questions about a bank he found operating out of

the St. Petersburg mayor's office and a real-estate development company to

which Putin was attached.


At one point Sergei Roldugin asked Putin point-blank, "Don't you have a

little candle factory somewhere?" Putin, he says, answered, "You know I

don't have anything." Roldugin pressed again. "Bureaucrats exist to take

bribes, and it cannot be that you don't take anything." Roldugin says that

Putin then answered more firmly. "'You know, Sergei, I can survive without

that.' But he knows the prices, the amounts being taken around him. He told

me, 'If I would take bribes, I'd be extremely rich by now.... I could do

nothing but pass information, and people would offer me good money for

that. But I didn't take that, and that's why I'm worth a lot now.'"


In the Kremlin, Putin worked for Pavel Borodin, the Kremlin property

manager who has been indicted by the Swiss for his role in the Mabetex

scandal. Each year from 1996 on, Putin was promoted, from overseeing the

regions to heading the F.S.B., to being secretary of the Security Council

and, in August 1999, to prime minister. The question naturally arises: How

can you work for so many people directly implicated in scandal and not be

implicated yourself?


"There are no clean politicians in Russia," political analyst Vyacheslav

Nikonov tells me. Putin may not have become rich, but he got ahead.

"Yeltsin used him as an enforcer," Nikonov says, and time and again he

proved his loyalty, especially in 1998 and 1999, when the Duma wanted to

impeach Yeltsin. An American who is a close observer in Moscow told me,

"Every time Yeltsin had serious trouble in the Duma, Putin and the F.S.B.

intervened. They made sure the F.S.B. had information on [Yeltsin's

enemies] and would use it."


Now that he's in power himself, Putin supposedly feels different.

Explaining what Putin meant by "dictatorship of the law," Egorov says his

friend is convinced that "officials never have the right to spin the law in

their own favor." "He is extremely intelligent, part of a new breed we

hadn't seen before," says James Wolfenson, head of the World Bank, who at

the time of Putin's election spent nine hours with him in his Kremlin

apartment. "For a Russian leader, he's as clean as you're going to get. ...

Everybody I've met feels he's the best chance we're going to have."


"Spies must be charming," Ednan Agaev, a former arms negotiator for the

Soviet Union, tells me. But even more important than wooing Western

investors and negotiating for debt relief, Putin must convince Russians

that they can once again believe in the motherland. They have to obey the

law, pay taxes, and trust the state. "The historic mission of Yeltsin was

to destroy Communism without violence, to put Russia on a new track and

then open a door to the future," says Agaev. "Putin's mission is to go

through the door."


'Lots of people surrounding Putin are very anti-American, maybe as a result

of [the NATO bombing of] Kosovo. It looks like a very different moment

between Russia and the U.S.," says Kommersant Daily correspondent Nataliya

Gevorkyan. "It's not nice at all." Gevorkyan was the senior correspondent

of three chosen to interview Putin for First Person. She feels that Putin

likes Bill Clinton personally; however, Putin's election and the U.S.

presidential contest in November signify a new era in U.S.-Russian

relations. In a Special Congressional Task Force Report to be issued this

month, Republicans are expected to criticize Al Gore for his significant

role in U.S.-Russia policy over the last eight years. In addition, Richard

Cheney used his clout as C.E.O. of Halliburton, an energy-services company,

to lobby Congress and the State Department to countermand the State

Department's prohibition against releasing to a shady Russian oil company a

loan of $490 million, of which almost $300 million would go to Halliburton.


"There's a very strong backlash after a decade of being the laughingstock

of the world-that we can't produce anything or get anything right," says

Pavel Felgenhauer. "And the U.S. expects some liberal to come to power,

polished and pro-Western? Hardly!"


"Putin is not a democrat!" says Valery Golubev, who spent several years in

a four-man office with him. "What does 'democrat' mean? In Russian terms,

it's a bit of a curse word."


"Democracy in Russia has become a dirty word," Vladimir Posner told me. "If

you write 'dermocrat,' that's a play on words in Russia. Dermo means

crap-it's a crapocracy. Over the last 10 years, because of what's happened,

for a lot of people democracy has become crap, because it has destroyed

their livelihood, their culture. Also, that specific anti-Western,

particularly anti-American sentiment, that's where the real problem lies.

At first, democracy dazzled them. What it's turned out to be for many

Russian people is misery." Moscow-based Swedish journalist Jan Blomgren

told me, "I'm sure Putin's not good for democracy, but he might be good for

Russia. Democracy is not the highest ideal now."


"Even the most anti-Russia Washington administration cannot inflict more

harm on our country than the true 'friends of Russia' of Clinton's team,"

says one Russian political commentator. "An increase of isolationist

tendencies in the U.S. would be a boon."


"The real issue is, can you establish law and order and respect the

Constitution as written?" says Posner. "Putin has the majority support of

the population, who support the idea: let's curtail democracy and then

we'll come back [to it]." Moreover, Posner says, "Putin is under a lot of

pressure from different groups. He feels a moral obligation to the

oligarchs who put him in. I don't think he feels pressure from

liberals-they don't have any power. I do think he's under pressure from the

military and the more nationalistic elements of the country-those who

believe Russia ... has to be a superpower again." In the words of

Constantin Borovoy, an early business tycoon, "Russia is only important if

it's scary. If you can't solve old problems, you create new ones."


"NATO expansion was an incredible slap in the face-at least a wake-up call

[that Russia] had to start paying attention to its own security needs

again," says Clifford Gaddy of the Brookings Institution, who has an

excellent track record for calling Putin's moves. Poland, the Czech

Republic, and Hungary all got in, but Russia was pointedly excluded.


Now Putin's dreams of reviving his country as a superpower will most

certainly have to be curtailed. After the Kursk sank, Kursk's regional

governor, Aleksandr Rutskoy, said that Russia was "losing not a

submarine-it was losing a national idea." Vladimir Putin's formidable

challenge is to keep hope alive not just for the motherland but for himself.




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