Band of brothers
An academic investigation into the networks that control Russia
By Karen Dawisha. Simon and Schuster; 445 pages; $30.
“PUTIN, thief! Putin, thief!” chanted the protesters who marched through Moscow as Vladimir Putin sought his third term as president. Since then the rallies have ended. Russia’s swift annexation of Crimea and its subsequent proxy-war in the south-east of Ukraine have turned Mr Putin into a national hero in the eyes of many Russians, including some former protesters. But they have also led to Western sanctions against Mr Putin’s cronies, and focused attention once more on the issue of theft and corruption, which is the subject of a new book by Karen Dawisha, a political scientist at Miami University in Oxford, Ohio.
“Putin’s Kleptocracy” is a who’s who of the people on the sanctions lists drawn up by America and the EU. It is also a guide to the crony capitalism that grew out of the nexus of Mr Putin’s plutocratic interests, his shady past and authoritarian rule.
When Mr Putin became president he was seen as a pro-Western, economic liberal. He pledged to clamp down on the oligarchs who wielded power in the 1990s, and to restore the role of the state as chief arbiter. Instead, Ms Dawisha writes, he transformed “an oligarchy independent of and more powerful than the state into a corporatist structure in which oligarchs served at the pleasure of state officials, who themselves gained and exercised economic control…both for the state and for themselves.” The result is that 110 individuals control 35% of Russia’s wealth, according to Ms Dawisha.
The buccaneering oligarchs who em-erged in the 1990s were bright, self-made men who ruthlessly exploited every opportunity offered by the transition economy. Mr Putin’s cohort is different. Most of them are secretive, unremarkable, grey men, with backgrounds in the security services. They prospered, not by building new businesses, but by suffocating existing ones and picking up the pieces or sucking money out of the state.
In the mid-1990s Yegor Gaidar, the architect of Russian market reforms, feared that the repressive Soviet bureaucracy could morph into a mafia system. “A union between mafia and [bureaucratic] corruption can create a monster which has no equivalent in Russian history—an all-powerful mafia state, a real octopus,” he wrote in 1994. A decade later Gaidar’s concern began to turn into reality. Ms Dawisha’s book describes the fusion between the secret police, the mafia and the oligarchs with tentacles that stretch into almost every aspect of life in Russia and beyond.
Ms Dawisha traces their influence to the last days of the Soviet empire, when the KGB was put in charge of the Communist party’s foreign bank accounts and set up joint ventures with Western firms. When the party collapsed the KGB knew where the money was. In the late 1980s Mr Putin was a junior officer. By 1990 he was formally in charge of external trade relationships in the office of the mayor of St Petersburg. In practice, this meant he was part of all trade deals with foreigners.
When Mr Putin moved to Moscow, serving in the Kremlin’s administration and then as the head of the FSB, the KGB’s successor, before becoming prime minister and then president, his friends followed. Mr Putin relied on former associates to help run the country. Some have become billionaires controlling the distribution of the oil rents. Mr Putin also exploited the traditional links between the KGB and organised crime.
Ms Dawisha points her finger at many. Cambridge University Press was so frightened of her accusations that it decided earlier this year not to publish the book for fear of being sued. (It was subsequently bought by Simon and Schuster, but is being brought out only in America.) British libel laws have no doubt contributed to a sense of intimidation. Russian oligarchs have been able to take advantage of them, but may find that harder now that many appear on a sanctions list and are unable to travel to Europe and America. In 2009 The Economist settled a libel action, which Ms Dawisha refers to in her book. It was brought by Gennady Timchenko, a former owner of Gunvor, a commodities-trading firm. He is on the American sanctions list.
Ms Dawisha’s work is largely based on open sources, chiefly investigations by Russian and foreign journalists and published in Russian newspapers, journals and books. The problem with this approach is that without being able to verify these sources, Ms Dawisha makes herself vulnerable to the same ills that have beset the Russian media: supposition, conspiracy and statements based on assumptions and circumstantial evidence rather than documentation. It is impossible to judge how much of this can be proved.
The overall thesis of Ms Dawisha’s book is that Mr Putin’s advance to power was not accidental but part of a pre-meditated plan. Furthermore, the system that has emerged in Russia was created by a group of men who followed Mr Putin. “The group did not get lost on the path to democracy,” she writes. “They never took that path.” But hindsight can be misleading. Ms Dawisha imposes her view of today’s Russia on to the time when Mr Putin came to power. In fact, Russia’s descent into the corporatist, nationalist state that it has now become was by no means predetermined.
In a pluralistic state, the scandalous, ugly stories about Mr Putin and his associates would bring down the government. In Russia they have had little effect. Part of the reason lies in the Kremlin’s control of television, the main source of information for most Russians. The vast increase in incomes, particularly in large cities, has also made people more tolerant of corruption. It was not just Mr Putin’s cronies who benefited from the rising oil prices. So did those who voted for him. Russia’s aggression in Ukraine and the propaganda that accompanied it struck a chord with people keen for an imperial resurgence. But as the economy slows down and real incomes start to fall, the focus may shift back to the issue that sparked the protest in 2011. If so, the stories that Ms Dawisha tells may start to resonate more loudly.
Original Link: http://www.economist.com/news/books-and-arts/21633785-academic-investigation-networks-control-russia-band-brothers?fsrc=email_to_a_friend