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