Leonid Nevzlin expected the worst. ‘Life became intolerable. They didn’t even bother to disguise the cars they watched us from. Every night I went to sleep with a bag packed so that if they came for me at five in the morning I’d have what I needed for prison.’ He left Russia for Israel. But Khodorkovsky ignored the warnings to the last.
In October armed police raided Khodorkovsky’s orphanage near Moscow and took away its computers. And a few days later the president of ExxonMobil, Lee Raymond, came to Moscow for an economic conference and talks with the president. He appears to have given Putin the – probably wrong – impression that Khodorkovsky planned to sell the American company not just 25 per cent but a controlling 51 per cent of Yukos-Sibneft. Khodorkovsky’s deputy, Alexander Temerko, concedes, ‘a company like Exxon cannot be a minority shareholder. Of course it says, we’ll buy 25 per cent, but we need an option for a controlling stake.’
Putin was by now, it seems, incandescent with rage. BP’s John Browne recalled later: ‘Shortly before Khodorkovsky’s arrest, in a private conversation, Putin made a passing but steely remark to me: “I have eaten more dirt than I need to from that man.” ’
Putin called in the prosecutor general, Vladimir Ustinov, to arrange Khodorkovsky’s arrest. It came on 25 October. The oil tycoon had flown to Siberia, quixotically ignoring a fax that had arrived two days earlier, bearing Ustinov’s signature, summoning him to report to the prosecutor’s office in connection with ‘irregularities in the tax regime of the Yukos oil company’. As his plane refuelled in Novosibirsk, armed FSB troops stormed it and led Khodorkovsky away in handcuffs. His defiance of the siloviki was about to cost him his freedom and his fortune.
The reaction
The headlines said it all: ‘Capitalism with Stalin’s face’ (Nezavisimaya gazeta), ‘A coup in Russia’ (Kommersant). The New York Times wrote: ‘Russia lurched toward a political and economic crisis as the country’s stocks, bonds and currency plummeted after the weekend arrest of Russia’s richest man.’
Khodorkovsky’s colleagues in the Union of Industrialists and Entrepreneurs issued a statement condemning the arrest: ‘Today Russian business does not trust the law-enforcement system and its leaders. Thousands of small and medium enterprises suffer daily from their arbitrary rule. The authorities’ crude mistakes have thrown the country backwards by several years and undermined confidence in their statements about the impermissibility of reversing the results of privatisation.’
Trading on the tumbling Moscow currency exchange was suspended. Putin’s chief of staff, Alexander Voloshin, resigned. His successor, Dmitry Medvedev, publicly questioned the wisdom of the arrest, saying, ‘This is a dangerous thing, as the consequences of measures not fully thought out will have an immediate effect on the economy ... and cause indignation in politics.’16 Amid the turmoil, Putin rejected calls from other oligarchs for a meeting, and demanded an end to what he called the ‘hysteria and speculation’, adding (as if he were a mere bystander) that for the courts to arrest a man they must have had reasons to do so. ‘There will be no meetings, no bargaining about the work of the law enforcement agencies.’ Government ministers, he said, should not get dragged into discussing the matter.
The prime minister, Kasyanov, tells a curious story about a certain appointment that the Kremlin wanted him to make around this time. Viktor Ivanov, the former FSB general whom Putin had taken on as his chief head-hunter, called Kasyanov several times, urging him to appoint a certain young man as a deputy tax minister. Kasyanov demurred, not understanding the urgency of the appointment and unsure why the man, who had worked most of his career in St Petersburg furniture stores, was qualified for the job. He was not aware at the time that Anatoly Serdyukov was the son-in-law of Viktor Zubkov, the first deputy finance minister (and former St Petersburg colleague of Putin). When Kasyanov was sacked in February 2004, Serdyukov was immediately moved to the tax ministry – where he was put in charge of the case against Khodorkovsky, and within two weeks promoted to be head of the Federal Tax Service. Putin now had a man he could trust to assemble the most damaging evidence against his enemy.
The two faces of Putin
The events described in this chapter – the stifling of the media, the establishment of the ‘vertical of power’ and appointment of Putin’s cronies to key jobs, the war in Chechnya, the callous response to the sinking of the Kursk, the taming of the oligarchs and the persecution of Khodorkovsky – all had a salutary effect on those in the West who had decided from the outset to do business with Putin. The man who was stretching his hand out to Western leaders, and implementing welcome economic reforms at home, was at the same time acting true to type, confirming his own phrase: there is no such thing as an ex-Chekist. His actions strengthened the hand of those in the West – particularly in the Bush administration – who from the start had advocated a tough stand against him.
In Britain, the Observer newspaper expressed a common view, saying it was now ‘crunch-time’ for Putin, and he must decide who he wanted to be. ‘Is he the westward leaning ally of President Bush and Tony Blair, or someone whose real affection is for the bad old days of the Soviet Union? ... If Mr Putin opts for the authoritarian path, then it is time for London and Washington to reassess relations.’17
But just as the West was disillusioned with Putin, so Putin was also becoming disillusioned with the West he’d been so keen to court.
5
NEW EUROPE, OLD EUROPE
A foot in NATO’s door
It was Tony Blair, perhaps, who best understood the ache that gnawed at Vladimir Putin’s KGB soul. The two men continued to meet regularly after the ground-breaking first visit to St Petersburg before Putin was elected. As well as formal talks they had jeans-and-shirt-sleeves get-togethers at Chequers, the prime minister’s country residence, and tête-à-têtes over vodka and pickled gherkins at Pivnushka, a Moscow beer hall. Blair tried to soothe the Russian’s anxieties about American plans for a missile defence shield. And behind Putin’s bluster about how Moscow would have to take counter-measures he sensed a deeper problem.
One of Blair’s aides, in an off-the-record interview, put it in terms that were so condescending they would have incensed Putin had he known this was what Blair thought: ‘The main thing Tony took away from those meetings was the need to treat them seriously. Their problem was that they felt excluded from the top table and weren’t being treated as a superpower. You had to show them respect. Even if they weren’t really a superpower any more, you had to pretend they were. This was the point Tony made to the Americans.’
To put flesh on the idea, Blair came up with a proposal to create a new NATO–Russia Council (NRC), to bind the Russians more closely to the Western alliance – stopping well short of membership, but at least giving them a sense of belonging to the club. The NRC would represent a significant upgrading of relations from the consultative ‘Permanent Joint Council’ that had existed since 1997 and given Russia zero influence over the alliance’s actions. Russia would now have a permanent ambassador at NATO headquarters, who would participate in sessions of the NRC on a par with each of the 19 other ambassadors – not ‘Russia plus NATO’, in other words, but ‘Russia plus the US, France, Britain, Germany’, and so on.
Blair’s initiative went down well in Western capitals, where it was seen as a realistic alternative to the more fanciful vision of actual NATO membership, which some, including the German chancellor, had discussed. The idea soon got hijacked by the Italian prime minister, Silvio Berlusconi, who had also been striking up a bond with Putin. The two men were rather similar in temperament – equally ‘blokeish’, equally vain and with a similar taste in earthy or tasteless jokes. Putin also saw in Berlusconi’s media empire some justification for his own control of Russian television.
One Friday evening early in 2002, NATO’s secretary general, George Robertson, had just got off a plane at Edinburgh airport, heading for a weekend at home in Scotland, when his mobile phone rang. It was Berlusconi. He h
ad decided that Italy would host a special NATO summit to launch the NRC.
‘Hang on, Silvio,’ said Robertson. ‘We haven’t quite got to that point yet.’
‘No, no,’ replied Berlusconi. ‘I have spoken to Vladimir. It’s all agreed. We will host the summit – and we will pay for it.’
Robertson was not going to be pushed around. ‘You can’t just do a deal with Putin. There are 19 countries in NATO and I have to consult all of them. But we’ll take your offer into account.’1
The proposal to pay for the summit, however, was a clincher. It didn’t take long to persuade the others to let Berlusconi stage the show. And a show it was, with no expense spared. Berlusconi took a run-down air base at Pratica di Mare outside Rome and transformed it into the Roman equivalent of a Potemkin village – a palatial canvas conference centre modelled on the Colosseum, complete with ancient marble statues.
The historic agreement was duly signed on 28 May. It would allow Russian generals for the first time to have permanent offices in NATO’s headquarters. And while Russia would not be able to veto alliance decisions, it would at least take part in joint discussions about issues such as peacekeeping, regional security, search-and-rescue operations and the fight against international terrorism and nuclear proliferation. In practice, according to Blair’s chief of staff, Jonathan Powell, the original idea – to give Russia a ‘real voice’ – got watered down in the NATO bureaucracy.2 Russia would later complain that NATO representatives would usually meet ahead of any Council session, coordinate their position and then effectively act as a bloc in their talks with Russia.
At the press conference after the signing ceremony, Putin said something that startled some of those present with its frankness. ‘The problem for our country,’ he said, ‘was that for a very long period of time it was Russia on one side, and on the other practically the whole of the rest of the world. And we gained nothing good from this confrontation with the rest of the world. The overwhelming majority of our citizens understand this only too well. Russia is returning to the family of civilised nations. And she needs nothing more than for her voice to be heard, and for her national interests to be taken into account.’
His words were so powerful that Robertson remembered them and could almost recite them from memory nine years later. ‘That seemed to me to be quite a dramatic appraisal, a confession, by a Russian leader about the years of failure and what he aimed to do in the future.’
Putin’s statement also confirmed exactly what Blair had understood about his craving for respect. But there were many in the West who looked at what was going on inside Russia and refused to believe that she really was a repentant daughter ‘returning to the family of civilised nations’.
Just what do we think of Russia?
Within the Bush administration there were two diametrically opposed views of what to do about Russia – plus many shades of opinion in between. Those, like national security adviser Condoleezza Rice, who spoke Russian and had a background in Soviet studies, were not necessarily the best disposed towards the new Russia. Several of Putin’s advisers have described her to me as ‘a Soviet expert, not a Russia expert’. They felt that she still viewed Russia through red-tinted spectacles. She took a tough line on Russia’s aggression in Chechnya, and an even tougher line on any Russian interference in neighbouring countries, which she took to be a sign of post-Soviet recidivism – but nonetheless she did try to understand the underlying causes of Russian policies.
Some of the Russia experts in the administration argued that there was not enough consideration of where Russia was coming from, that you couldn’t expect it to become ‘Westernised’ overnight (or perhaps at all), and that the way to win Putin round was to understand his fears (the Blair view) and accept that Russia had a legitimate right to expect its voice to be heard and its interests to be taken into account. This view was represented most strongly at the highest level by Secretary of State Colin Powell. According to one insider, speaking off the record, President Bush himself, having developed a real friendship with Putin, tilted in that direction, but policy tended to be shaped more by those who simply did not trust Russia, the so-called ‘neo-cons’ such as Vice-President Dick Cheney, Defence Secretary Donald Rumsfeld, Under-Secretary of State John Bolton, Dan Fried, who handled European and Eurasian affairs at the National Security Council, and Nick Burns, US ambassador to NATO (and later under-secretary of state). Somewhere between the two camps were national security adviser Condoleezza Rice and her deputy Stephen Hadley.
The insider went on: ‘Some of the policy makers understood a lot, but they understood it from a particular perspective. The real drivers behind Russia policy were people who had been working on European security issues all the way through the 1990s, and the goal was to continue the unfinished business of the 1990s – a Europe free, undivided and peaceful and all the rest of it. And there was a view that if you took in the Russia perspective you were somehow affirming its right to assert certain interests or privileges.’
So Bush’s Russia policy was largely forged by people who were above all concerned with the security of Central and Eastern Europe, who believed the West had ‘won’ the Cold War, and were determined to cement the former Soviet satellites into the free West, including NATO and the European Union – even at the risk of alienating Russia in the process. Poland, the Czech Republic and Hungary had already joined NATO in 1999, and now the alliance was about to embark on a second wave of enlargement, to include Slovakia, Slovenia, Bulgaria and Romania, plus – most controversially as far as Russia was concerned – the Baltic states of Estonia, Latvia and Lithuania, which had once been part of the USSR and stood right on Russia’s present borders.
Dan Fried said in an interview: ‘It was not sustainable to argue that the interests and freedoms of other countries, which suffered under Soviet occupation, should be held hostage to a Russian sense of deprivation of empire. I mean, to some degree the Soviets had achieved a sphere of influence in Europe thanks to Mr Molotov and Mr Ribbentrop, or if you prefer, Hitler and Stalin.’3
Over breakfast in a London hotel I put it to Nick Burns that Russia might have legitimate concerns in seeing NATO expand right up to its doorstep, and America installing new weaponry there. It was, after all, their ‘backyard’. His answer was quite uncompromising: ‘Tough! They lost that right. This was in the American national interest.’4 It was an answer that seemed to me to preclude accommodating even a reformed, ‘democratic’ Russia: it had ‘lost the right’ to influence affairs in its backyard, apparently by having inherited the sins of the Soviet Union, whereas the USA did have the right to influence affairs there because it was ‘in the American national interest’.
He went on: ‘When it came to admitting the Baltic countries into NATO, there were really furious arguments about it – both with the Europeans and within Washington. Even George Tenet [the CIA director], for example, was against it. But many of us had essentially lost hope that we could trust the Russians or integrate them into the West. By 2002, there was a growing suspicion that Putin wasn’t the person they thought he was, that he couldn’t make Russia a reliable ally. We concluded that we wanted a good relationship with Russia, but the most important target in the region, post-Cold War, was the freedom and liberation of Eastern and Central Europe. There was lots of opposition in the US, and we had to fight hard, but we thought we had to be careful about the Russians. We thought it was more important to lock in the one real gain of the fall of the USSR. George W. Bush was a strong believer in that argument.’
The neo-cons believed the policy of putting faith in Russia in the 1990s had failed. ‘I knew Russia would try to become dominant in Europe again, and we had to protect the Eastern and Central Europeans,’ said Burns. ‘Putin is all about bringing power back to Russia. This was becoming clear by late 2002.’5
That phrase was revealing: making Russia powerful again was precisely what Putin wanted – and precisely what many in Washington could not stomach.
&
nbsp; The administration’s ‘Russophiles’ found their views echoed in Western Europe, but not in Washington. One of them says: ‘There seemed to be a viewpoint that by understanding and laying out the Russian point of view you were endorsing it and legitimising it. This was not the view you find in Europe. This is why we were at odds with the Germans and even the UK because most of the European interlocutors were trying to factor in what Russia felt about things, because they didn’t want an open confrontation.’
There were many reasons why France and Germany felt closer to the Russians than the Americans. It was not that they underestimated the former Warsaw Pact countries’ longing to join the West’s structures and to protect themselves from the country that had oppressed them for 50 years. Germany, in particular, was still revelling in the joy of reunification after the collapse of the Berlin Wall. Nor was it just a matter of pragmatism and trade, although the latter was important for Germany. Rather, there was an ill-defined sense, especially in European intellectual circles, that Russia ‘belonged’ to Europe, that they shared a history and culture, and the time was right – whatever the shortcomings of Russian democracy – to welcome them ‘home’. Indeed, the argument went, welcoming them home would be precisely the best way to improve democracy there.
President Jacques Chirac of France epitomised this view. He had a strong personal interest in Russia. His parents had had a Russian émigré in their home in the 1930s, and Chirac himself had learned Russian and even translated Pushkin’s novel in verse, Yevgeny Onegin. According to his diplomatic adviser, Maurice Gourdault-Montagne, Chirac felt there was something ‘eternal’ about Russia, that it was neither fully European nor fully oriental. He had got on well with Yeltsin, who gave him the sauna and caviar treatment, and although he was cool towards Putin at first, he was willing to put his reservations aside, even regarding Chechnya.
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