#3 - JRL 7237
The Guardian (UK)
June 24, 2003
Don't mention the war
... or the corruption, or the menacing growth of the secret service, or his crooked former colleagues.
As Vladimir Putin arrives on a state visit to the UK today, Nick Paton Walsh lists a few things that won't be cropping up in the Russian president's chit-chat with the Queen Nick Paton Walsh and Jeevan Vasagar in Berlin

Halfway through Paul McCartney's concert in Red Square last month, the spotlights panned right to follow the entry of the diminutive figure of Vladimir Vladimirovich Putin. And as 20,000 Russians sang "Na-na-na-na" along to Hey Jude, the president's normally impassive face gave up the struggle to stifle a grin of intense satisfaction. For this was the essence of the image he wanted to project: Russians are Europeans now, not Soviets.

Putin's smug smile marked a milestone in both his presidency and Russia's post-Soviet history. The week after the concert, 55 world leaders descended on St Petersburg for its tricentennial celebrations. They wowed at the city's plush new paintwork and architectural splendour. Russia, despite the rot, was saying it was open for business with the west. And the west, careful not to touch the wet paint, was agreeing.

At home, over 80% of Russians approve of Putin's presidency. Putin absolves himself from blame at the lack of serious reform by occasionally carpeting his cabinet for their fecklessness. The lack of real change is the government's fault, not the president's, he argues - and it seems to work with the electorate. The economy remains stable and on the mend, despite incessant nagging from analysts about the risks of a crash.

Abroad, the Iraq crisis meant that Russia's permanent vote on the Security Council led London and Washington into a protracted flattery of Putin's state. His usefulness in international affairs as a friend and the relative stability he has brought to troubled Russia far outweigh any moral compunction that London or Washington feel about taking him to task over Russia's internal corruption and brutality. We have decided what Putin represents: he is the (westernised) future of Russia; a strong, clean, honest leader, who knows how to deal with the G8 leaders; he is making Russia safe for western investors again; the lawlessness of the Yeltsin 90s is finally ebbing away.

Yet this, together with much of what the Putin administration represents, is a glossing over the truth. And London and Washington are quite content to let the Kremlin keep on spinning it. But there is another picture of life in Russia, which Tony Blair and the Queen, who will welcome Putin for the rare pomp and privilege of a state visit today, would do well to keep in mind. As Let It Be and Back in the USSR sounded out that May night, a shootout behind the Kremlin, between three men in a BMW and police, provided a glimpse of how real and pervasive Russia's underground still is.

Meanwhile, 1,000km to the south, 10 Russian soldiers died in 24 hours in clashes with Chechnyan rebels. Six months ago, Washington and London criticised the ongoing murder of civilians by Russian troops in the separatist republic of Chechnya - disappearances which, human rights groups say, now outpace the Stalinist purges of the 1930s. They called for Moscow to negotiate with separatists and find a "political solution". That was before Iraq. Now, strangely, the Kremlin's decision to impose "free" elections for a new Chechnyan president under martial law is seen by Blair as "absolutely the right thing to do", and praised as a "political process" by the US State Department. Putin could not be more delighted.

And still Russia is mired in corruption, an estimated £1.7bn a year being paid in bribes. To get something done - be it a medical operation, a house extension, or a university place for your child - you need to grease a palm. This system begins and ends with corrupt bureaucrats - Soviet-era workers who supplement their meagre incomes through "favours".

Putin - a former KGB spy in Berlin, one-time head of the Russian security service the FSB, and now commander-in-chief of all Russian bureaucrats - was once an official in the St Petersburg administration. His own experience could only have informed him of the nightmare of backhanders and lawlessness that blights daily life in the federation. The 90s was a time of pure graft in Russia. The collapse of the official strictures of the Soviet Union brought the underground economy that fuelled life under communism to the fore.

Maria Liseyko, press secretary to one of Putin's colleagues in St Petersburg from 1993 to 1996, explains: "It was a time when it was very difficult to keep out of different kinds of misuse of power. The legislation was full of holes and I think it is difficult to find a person among the high-ranking bureaucrats who was not tripped up." Yet Liseyko insists that the president was "a very cautious man" who "always checked attentively everything" and thus avoided "all such traps". She says he proved his "immense honesty" on several occasions.

Yet the workaholic kept his distance from the post-Soviet bonhomie of the time. "It was a very happy time," she adds. "The members of the government were young and got on well, calling each other by their first names, but I don't remember anyone ever call Vladimir Vladimirovich - even in a private talk - [by the diminutive] Vova. He was a very serious man, and was seen as such. I won't say that Vladimir Vladimirovich is an open man."

But his distance did not save him from all awkward associations. During that time he held an advisory position on the board of a firm now being investigated by the German police for laundering money for the Russian mafia. The St Petersburg branch of SPAG is currently under investigation by German prosecutors for allegedly laundering £11m for Russian organised crime. SPAG denies the charges. Despite documents obtained by the media showing that he retained his directorship until March 2000, the Kremlin denies that Putin was ever associated with the firm.

After leaving the KGB, from 1990 to 1996 Putin was a key aide to the late Anatoly Sobchak, who became mayor of St Petersburg. Sobchak fell out with parts of the Yeltsin clan, who saw to it that his more unscrupulous property deals were publicised. Sobchak was accused, among other things, of giving a St Petersburg firm the rights to an exclusive apartment block in the city in exchange for a flat there for his niece, but he left to live in France before any of the investigations led to arrest. Putin's next boss was not so wholesome either. Pavel Borodin, who headed the Kremlin's ministry of property, was convicted by a Swiss court of laundering £17m in kickbacks from two Swiss construction companies who had lucrative deals to refurbish the Kremlin and other administration buildings in the mid-90s. Borodin did not appeal the verdict as he did not recognise the court's jurisdiction. Friends paid off the $177,000 fine. He none the less sat in a New York jail awaiting extradition for two months, while Putin's Kremlin made loud representations to try to secure his release.

Putin then worked in the Yeltsin administration, rising to be prime minister under a man whose initial courage in the face of communist hardliners turned into a self-serving muddle. Robert Rubin, the US treasury secretary, said a $4.8bn loan from the IMF to Russia in 1998 "may have been siphoned off improperly". There is no evidence that Yeltsin was involved in any wrongdoing. Putin agreed to grant him immunity from prosecution on the day he was appointed his acting successor.

Putin's past is, in part, like that of every Russian bureaucrat or businessman who has survived the 90s; and there is, of course, no evidence to suggest that Putin was involved in corruption. But such a record of colourful employers - and the lapses of judgment it betrays - would be torn to shreds by the western media. In Russia, it rarely gets a mention, the press falling all the more silent - rather than more vocal - once he rose to head the Kremlin.

"Very few newspapers engage in investigative journalism on a serious level," says Veronica Dmitriyeva, Russian and CIS director of the Media Development Loan Fund, a US foundation. "It requires a high degree of courage and social responsibility; the threats to journalists and editors can be real and serious."

The absence of independent scrutiny does little to dispel the idea that corruption remains a major part of Russian life. Liliya Shevtsova, professor of politics at the Carnegie Institute, says: "There is a fusion between power and business and because of this, corruption is systematic. Putin twice declared [reform against corruption] one of the main aims of his term. The question is, is he not able to realise the reform, or does he simply not want it?"

Shevtsova says she holds out hope that Putin might find a "second wind" as a liberal reformer, but opposition MPs are less generous. Sergei Ivanenko, deputy head of the Yabloko political party, says: "Putin acts with the typical methods of the old Soviet-era elite. He never destroys those from the ruling classes who need to be punished as he is afraid to displease those who still hold power. Thus Putin avoids conflicts and preserves stability. During the first three years of his rule he finished Boris Yeltsin's task of creating a semi-criminal shadow system of power."

Putin has been sure to import his own people into the fold. The Kremlin is full of former secret service men, and St Petersburgers from Putin's past. The FSB has never been stronger - except when it was called the KGB. One theory runs that a strong state backed by the FSB is the best way to rein in the all-powerful business cartels. Yet liberals ask if a turn towards the human rights standards of China in the early 90s - where labour camps and torture were routine punishments for political dissidents - are a fair price for such "stability".

To his credit, Putin is a supreme operator, steering his presidency through the violent protectionism of the different business and political clans that rule Russia. He is a patriot, granted, his policies seemingly bent on making the Russian state great regardless of the cost to the Russian people. But a liberal reformer - a Russian president who represents the values of democracy that the UK and US are supposed to promote, if not export - he is not.