Angus Roxburgh is a respected British foreigncorrespondent and Russia specialist. He was theSunday Times Moscow correspondent in the mid-1980s and the BBC’s Moscow correspondentduring the Yeltsin years. He is the author of TheSecond Russian Revolution and Pravda: Insidethe Soviet Press Machine.

‘A sober assessment of the Putin years, illuminatedby Angus Roxburgh’s first-hand experience andlong acquaintance with Russia.’Bridget Kendall, BBC diplomatic correspondent

‘Using his personal experiences and material fromnew interviews with key figures, Angus Roxburghlifts the lid on a decade of murky Kremlin politicsand points the way towards the new Putin era thatis about to dawn.’ Martin Sixsmith, author of

Russia: A 1,000-Year Chronicle of the Wild East

Published in 2012 by I.B.Tauris & Co. Ltd6 Salem Road, London W2 4BU175 Fifth Avenue, New York, NY 10010www.ibtauris.com

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Copyright © 2012 Angus Roxburgh

The right of Angus Roxburgh to be identified as the authorof this work has been asserted by the author in accordancewith the Copyright, Designs and Patents Act 1988.

All rights reserved. Except for brief quotations in a review,this book, or any part thereof, may not be reproduced,stored in or introduced into a retrieval system, ortransmitted, in any form or by any means, electronic,mechanical, photocopying, recording or otherwise, withoutthe prior written permission of the publisher.

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CONTENTS

Introduction

1. The Secret Policeman’s Ball2. Courting the West3. The Battle for Economic Reform4. The Darker Side5. New Europe, Old Europe6. Putin Mark II7. Enemies Everywhere8. A New Cold War9. Media, Missiles, Medvedev10. The Descent into War11. Resetting Relations with the West

12. The Strongman and His Friends13. Tandemology

Conclusion

Notes

Endnotes

List Of Illustrations

INTRODUCTION

When you shake hands with Vladimir Putin youscarcely notice whether it is a firm or a weakhandshake. It is his eyes that consume you. Helowers his head, tilting his eyes upwards towardsyou, and fixes you for several seconds, as thoughmemorising every detail, or maybe matching yourface to a picture he had memorised earlier ... It is aglowering, piercing, highly unsettling look.

Russia’s ‘national leader’ is like no othercountry’s president or prime minister. The formerKGB spy was rather reserved and gauche at first,when he was unexpectedly propelled into highoffice in 1999. But he has grown into a man withno inhibitions – a strongman and a narcissist, whoflaunts his physical strength in ever more frequent

photo-shoots. In the beginning we saw only a fewselected images – Putin the judo champion, Putin atthe controls of a fighter jet. Later – particularlyafter he moved from the president’s office to thatof the prime minister in 2008 – he began to invitecamera crews on expeditions designed solely toproject a film-star image. They showed him puttingsatellite tracking devices on polar bears, tigers,white whales and snow leopards. He took thecameras along to see him swimming the butterflystroke in an icy Siberian river, and riding a horsethrough mountains, with bare chest and darkshades. He personally put out wildfires, drovesnowmobiles, motorbikes and Formula One cars,went skiing and scuba-diving, played ice hockey,and even crooned ‘Blueberry Hill’ in English andplayed the piano in public – unembarrassed by hisinability to do either. In August 2011 he had acameraman on hand when he stripped to the waistfor a doctor’s examination.

What other world leader acts like this? Havingmuscular policies is one thing; but no one matchesPutin for sheer vanity.

In conversation he is attentive, combative andsometimes explosive, when he touches uponsensitive matters. He is exceedingly well-informed, but also surprisingly ignorant aboutaspects of Western life. He is courteous, but canalso be boorish. As president and then as primeminister he has run Russia with a strong, andtightening, grip. In recent years he has taken todressing down his ministers in public, creating anatmosphere in which most of his subordinates areterrified of contradicting him, or even of voicingan opinion in case it might contradict him. He hascreated a top-down system – the ‘vertical ofpower’ – which instils fear and stifles initiative.

Russia has become a state contemptuous of itspeople’s rights: a country in which the head of theelectoral commission says his guiding principle isthat whatever Putin says must be correct, and thechairman of parliament describes it as ‘no placefor discussions’. It is a country in which the mostimportant decision about who will becomepresident is effectively taken in private by twoindividuals, with no reference to the populace.

This was what happened in September 2011, whenPutin’s protégé and successor as president, DmitryMedvedev, agreed to retire from the top job afterone term to allow Putin to return as president in2012 for, potentially, another 12 years. The twomen cynically admitted what people had suspectedbut did not know for sure, that this had been theplan ever since Putin had stepped aside from thepresidency in 2008: Medvedev’s stint in theKremlin was a mere seat-warming exercise,designed to keep Putin in power for as long as hewished, while paying lip-service to (or, in fact,flouting) the constitutional ban on a presidentserving more than two consecutive terms.

Putin did not start out like this. Back in 2000many Western leaders at first welcomed his fresh,new approach, and his willingness to cooperateand seek consensus. It will be the task of this bookto try to chronicle and explain how everythingchanged: why Putin became more and moreauthoritarian, how he challenged the West and howthe West challenged him too; how each side failedto see the other’s concerns, causing a spiral of

mutual mistrust and lost opportunities. On the onehand there is what the Americans and the Westobserved: Russia’s political crackdown, the brutalwar in Chechnya and murders of journalists, thecorrupt mafia state and growing bellicosity,culminating in the invasion of Georgia and the gaswars against Ukraine. On the other, there isRussia’s view: America’s domineering role in theworld, its missile defence plans, the invasion ofIraq, the expansion of NATO, Russia’s positivegestures that went unanswered, the perceivedthreat to spread revolutions from Georgia andUkraine to Russia. And there is each side’s failureof vision: Putin’s inability to see any connectionbetween his own repressions at home and thehostile reaction abroad; George W. Bush’sinability to understand Russia’s age-old fear ofencirclement or its fury at his high-handed foreignpolicy adventures.

At the time of writing Putin remains the mostpopular politician in Russia, perhaps because ofthe measure of stability and self-esteem he restoredto people’s lives, and because living standards

improved during his rule, due largely to high oilprices which benefit Russia. And yet he has failedin many of his stated goals. Having come to powerpromising to annihilate terrorism, the number ofattacks has grown; corruption has soared, andcripples the economy; the population has slumpedunder his leadership by 2.2 million people; foreigninvestment has been far lower, as a percentage ofRussia’s economic output, than rival fast-growingemerging markets such as Brazil or China; and,despite the massive inflows of energy revenues inthe past decade, Russia has failed to create adynamic, modern economy. This book looks at thestruggle for reform inside Russia, and asks whetherDmitry Medvedev as president was (as it oftenseemed) a frustrated liberal or mere window-dressing.

Politicians are prone to oversimplifycomplicated issues, especially if it is in theirinterests to do so. This has been especially true ofthe discussion in recent years of what is perhapsthe trickiest of all international political problems– the right of small nations to self-determination.

Kosovo, Chechnya, South Ossetia, Abkhazia,Transnistria ... gallons of ink and roomfuls of hotair have been expended in explaining, usually withcategorical assurance, that one small country’sindependence is or is not a precedent for others.Usually it is the big ‘mother country’ that insists allother cases are unique (Russia vis-à-vis Chechnya,Georgia vis-à-vis South Ossetia and Abkhazia),while the small nations demand to be treated thesame way as those who gained their freedom. It isan issue of exceptional importance in Russia, amultinational state like no other, where dozens ofnationalities coexist, some with greater or lesserautonomy, and where the Kremlin has apathological fear of the state disintegrating if anyone of those nations is allowed to set a precedentby gaining independence. The issue runs throughthe history of the last decade, from the war inChechnya and the welter of terrorist incidents inRussia, to the short war between Russia andGeorgia in 2008. Usually no side is ‘right’ in anyof these conflicts, and it would be simplistic topretend otherwise – just as it would be simplistic

to pretend that the West’s decision to recogniseKosovo and NATO’s decision on futuremembership for Georgia and Ukraine had nobearing on relations between Russia and itsneighbours. Perceptions and misperceptions of theother side’s intentions often play a greater – andusually more harmful – role than reality.

This is my third book about Russia, and I amaware of the presumptuousness of any foreignerwho claims to understand that baffling country. TheRussian political scholar Sergei Karaganov wroteof the ‘feelings of resentment and rejection that weRussians have when reading unpleasant notesabout our country written by foreigners’. There ismuch that is unpleasant in Russian politics today,and it deserves to be written about. Russia issometimes its own worst enemy, seeing illintentions abroad where there are none, and fearingthe spread of democracy rather than welcoming it.But there is also a failure on the part of the West tounderstand the processes going on there or to treatRussia with respect as a country that wants to bepart of the world, not shunned by it.

***

This book stems partly from my work as chiefconsultant on a four-part BBC televisiondocumentary titled ‘Putin, Russia & the West’,made by the Brook Lapping production company.For the series, we conducted hundreds of hours oftop-level interviews not only in Russia but also inthe US, Britain, France, Germany, Ukraine andGeorgia. These original interviews cast fresh lighton many of the events covered, and are at the heartof my narrative.

I also draw, particularly for Chapter 9 of thebook, on my personal experiences while workingfor three years as an adviser to President Putin’spress secretary, Dmitry Peskov. When the Kremlindecided in 2006 to take on a New York public-relations company, Ketchum, and its Brussels-based partner, GPlus, I found myself making anunexpected detour from my career as a journalist.Neither Ketchum nor GPlus had anyone on theirstaff who knew much about Russia, and suddenlythey needed someone and offered me a job. After

eight years covering the European Union, the ideaof immersing myself in Russia again wasappealing. Most of my career had revolved aroundit: I had studied and taught Russian, worked as atranslator in Moscow and for the BBC MonitoringService, been Moscow correspondent of theSunday Times and later the BBC.

There was one piquant moment in my biographythat made the offer even more tempting. Back in1989, when Putin was a KGB spy in Dresden, hisbosses deported me from Moscow in retaliationfor Margaret Thatcher’s expulsion of Soviet spiesfrom London. I was then the Sunday Timescorrespondent and was one of three journalists andeight diplomats who were kicked out in the last bigspy scandal of the Cold War. How ironic, Ithought, to return to Moscow as Putin’s adviser! Iaccepted, and became a Kremlin media consultant,based in Brussels but travelling regularly toMoscow. I was part of a team of some 20–30people worldwide, but the only full-timeconsultant. I came to know Peskov and his teamvery well, and although they always kept up their

guard, I was as close as any foreigner in thoseyears to the corridors of power. My personalobservations form the basis for much of what Idescribe during the years 2006–2009.

Our main task as media advisers to the Kremlinwas to persuade them to open up to the press, onthe rather obvious premise that the more you speakthe more your views will be heard. The Russianpolitical class proved remarkably resistant to thisidea, and remained so long after I left the PRworld and returned to journalism – as I discoveredwhile working on the BBC television series.Persuading senior Russian politicians to giveinterviews was immensely difficult, and severalkey figures refused altogether. Others agreed, butonly after many months of obstruction by theirsubordinates who seemed unwilling or afraid evento pass on our request. President Medvedev’sspokeswoman, Natalia Timakova, refused point-blank even to speak to us. Ironically it was easierto gain top-level access to the Kremlin in the finalyears of communism, when I worked on the BBCseries The Second Russian Revolution, than it is

now. Our task became even harder as politicaluncertainty crept in during the year prior to the2012 presidential elections. The entireadministration was in limbo, as Putin and hispresident, Dmitry Medvedev, refused to revealwhich of them would run for re-election. Suddenlywe found that interviews that had been promisedwere declined. It became clear that cannypoliticians and functionaries did not dare to sticktheir necks out in such a time of flux.

Nonetheless we did interview more than ahundred people (either on or off the record) for theTV series and this book. They include heads ofgovernment, foreign ministers and senior advisersin eight countries. In Russia we spoke to LyudmilaAlexeyeva, Anatoly Antonov, Stanislav Belkovsky,Vladimir Chizhov, Boris Chochiev, ArkadyDvorkovich, Viktor Gerashchenko, German Gref,Alexei Gromov, Sergei Guriev, Andrei Illarionov,Igor Ivanov, Sergei Ivanov, Grigory Karasin,Mikhail Kasyanov, Viktor Khristenko, YevgenyKiselyov, Eduard Kokoity, Andrei Kolesnikov,Konstantin Kosachev, Alexander Kramarenko,

Alexei Kudrin, General Marat Kulakhmetov,Sergei Kupriyanov, Sergei Lavrov, FyodorLukyanov, Mikhail Margelov, Sergei Markov,Vladimir Milov, Oleg Mitvol, Dmitry Muratov,Gleb Pavlovsky, Dmitry Peskov, SergeiPrikhodko, Yevgeny Primakov, Dmitry Rogozin,Sergei Ryabkov, Vladimir Ryzhkov, ViktorShenderovich, Dmitry Trenin, Yuri Ushakov,Alexander Voloshin and Igor Yurgens.

In the USA we interviewed Matthew Bryza, BillBurns, Nicholas Burns, Eric Edelman, Daniel Fata,Daniel Fried, Philip Gordon, Rose Gottemoeller,Thomas Graham, Stephen Hadley, Lt-Col RobertHamilton, John Herbst, Fiona Hill, General JamesJones, David Kramer, Michael McFaul, GeneralTrey Obering, Stephen Pifer, Colin Powell,Condoleezza Rice, Stephen Sestanovich, DeanWilkening and Damon Wilson.

In Georgia we spoke to Irakli Alasania, DavidBakradze, Giga Bokeria, Nino Burjanadze,Vladimer Chachibaia, Raphael Gluckmann, NataliaKinchela, Erosi Kitsmarishvili, Daniel Kunin, BatuKutelia, Alexander Lomaia, Vano Merabishvili,

Mikheil Saakashvili, Eka Tkeshelashvili, GrigolVashadze, Temur Yakobashvili and Eka Zguladze.

In the UK we spoke to Tony Brenton, JohnBrowne, Nick Butler, Jonathan Cohen, MichaelDavenport, Martha Freeman, David Miliband,Craig Oliphant, Jonathan Powell, GeorgeRobertson and Alexander Temerko.

In Ukraine we interviewed Leonid Kuchma,Hrihoriy Nemyria, Oleh Rybachuk and ViktorYushchenko, and in Poland AlexanderKwaśniewski and Radoslaw Sikorski.

In Germany we interviewed Rolf Nikel,Alexander Rahr, Gerhard Schröder and Frank-Walter Steinmeier, and in France our sources wereJean-David Levitte and Maurice Gourdault-Montagne.

I would like to thank the producer of the BrookLapping series, Norma Percy, and the executiveproducer, Brian Lapping, for giving me theopportunity to work on this long but rewardingproject. My thanks go to directors Wanda Kosciaand David Alter for reading some of the chapters,and to assistant producer Tim Stirzaker for his

indefatigable research and organisational help.Above all I am indebted to the series director, PaulMitchell, and the Moscow producer, MashaSlonim, for their stream of advice and insights.Neil Buckley and Fiona Hill kindly read themanuscript or parts of it and made many sensiblesuggestions, for which I am very grateful. Lastly,warm thanks to my agent Bill Hamilton, and myexcellent editor at I.B.Tauris, Joanna Godfrey.

1

THE SECRETPOLICEMAN’S BALL

A new millenniumThe Putin era began at midday on the last day ofthe twentieth century. Taking the entire world bysurprise, a wheezing, faltering President BorisYeltsin appeared on television to announce hisresignation, six months ahead of schedule. In avoice breaking with emotion he asked Russians toforgive him for his mistakes and failings, and toldhis people that Russia should enter the new

millennium with ‘new politicians, new faces, newintelligent, strong and energetic people’.

Yeltsin had recorded the address in the Kremlinearlier that morning. The first people to knowabout it, apart from his daughter Tatiana and hisclosest advisers, were the television technicianswho loaded his script into the autocue machine.When he finished he turned away and wiped tearsfrom his eyes, then opened a bottle of champagne,poured a glass for the camera crew and the fewpresidential staff who were present, clinkedglasses and downed his own one in a single go.Even as he did so, his designated successor,Vladimir Putin, was being made up behind ascreen in the same room to record his own NewYear’s address to the people.

It would be broadcast just before midnight. Butfirst he had a few formalities to see to. At twoo’clock he was given the ‘nuclear briefcase’containing the codes needed to launch a nuclearstrike. Then he held a five-minute meeting of hiscabinet, followed by a longer session of hisSecurity Council. At six he signed his first

presidential decree, granting Yeltsin and themembers of his family immunity from prosecution.Then he held a series of quick one-on-one meetingswith key ministers. And finally, cancelling aplanned trip to St Petersburg, he swept out of theKremlin in the presidential motorcade and headedfor Vnukovo airport. He had plans to bring in theNew Year somewhere special.

While billions of people around the globeushered in the new millennium with parties andfireworks, Russia’s new acting president wasonboard a military helicopter trying to fly into therebel republic of Chechnya in hazardous weatherconditions that eventually forced the chopper toreturn to base in neighbouring Dagestan. This wasthe Putin the world would come to know and fear –the tough guy, the action man, obsessed withcombating terrorists and separatists, determined torestore the pride of a country that under Yeltsinhad come to look shambolic and sick.

As his helicopter battled with the elements overChechnya, Russian television aired his pre-recorded address to the nation. It was brief and

matter-of-fact, declaring there would be no vacuumof power and paying tribute to his predecessor. Itcontained only one policy pledge, which inretrospect looks quite remarkable. He said: ‘Thestate will stand firm to protect freedom of speech,freedom of conscience, freedom of the mass media,and property rights, those fundamental elements ofa civilised society.’

The freedoms and rights he praised wereprecisely those that had been obliterated in thecommunist USSR and then restored under Yeltsin.And yet within a few years Putin would standaccused of flouting them himself, creating a newkind of post-communist authoritarian model,trampling on the free press, and persecutingbusiness tycoons – or indeed anyone – who daredto challenge him.

Why did that happen? The key, or at least one ofthe keys, to understanding Putin’s journey is tolook at the Russia he inherited from Yeltsin – aRussia not just economically and militarily weak,but also patronised by the West.

Yeltsin and ClintonBill Clinton made his last visit to Russia asAmerican president in June 2000, just two monthsafter Putin’s inauguration. Clinton had met BorisYeltsin some 20 times and built up a close,bantering relationship that came to be described asthe ‘Bill ’n’ Boris Show’. He had also met Putin acouple of times, but like most Western leaders stillknew little about him other than his prowess atjudo and his past career as a KGB agent – and thatwas enough to make him wary. Now he found Putina tough negotiator, who, irritatingly, alreadyregarded Clinton as a lame-duck president withlittle more than half a year left in office.

Standing a good six inches shorter than theimposing American president, Putin made up forhis lack of stature as any judo player does – withagility and skill. He doggedly resisted Americanplans to abandon (or even amend) the 1972 Anti-Ballistic Missile treaty so as to allow the US todevelop a national missile defence programme –the ‘Star Wars’ system first promoted by Ronald

Reagan. The ABM treaty banned both Russia andthe United States from deploying defences againstnuclear missiles, and for Putin it was a cornerstoneof nuclear deterrence: if one side was allowed todevelop systems that could shoot down the other’slong-range missiles then the delicate balance ofpower would be destroyed and the side with theshield might be tempted to launch a pre-emptivestrike.

Putin dismissed Clinton’s criticisms of thebrutal new campaign he was waging in Chechnyaand his crackdown against NTV, Russia’s leadingindependent television station. And he revealed hisenduring resentment of NATO’s bombing of Serbiain 1999 – an event that would inform Putin’sforeign-policy thinking throughout the next tenyears.

The campaign against Serbia, which wasdesigned to put an end to President Milosevic’sethnic cleansing in Kosovo, was a pivotal momentin Russia’s relations with the West. Throughout theYugoslav wars of the 1990s, Moscow supportedMilosevic, at least partly because of traditional

Russian affinity with the Serbs, who, likeRussians, are Orthodox Christian Slavs.

The ‘brotherly ties’ between Russians and Serbsmay be exaggerated, but the Kremlin certainly sawparallels between Milosevic’s attempts to subdue‘terrorism’ and separatism in Kosovo andYeltsin’s fight against the same problems inChechnya. Just as Yeltsin branded the Chechenrebels ‘bandits’, so Milosevic (and indeed at onepoint the US government) regarded the KosovoLiberation Army as a terrorist group. Havinglaunched a bloody war against Chechnya, causingtens of thousands of deaths and a mass exodus ofrefugees, it was entirely consistent for the Russiansto support Milosevic in his efforts to maintain theintegrity of what remained of Yugoslavia.

But Yeltsin’s pleas not to attack Serbia wentunheeded, leaving Moscow feeling that for all thebonhomie of the Bill ’n’ Boris Show, and for allthe talk of welcoming post-communist Russia intothe community of civilised nations, its wordcounted for nothing. On the eve of NATO’s airstrikes on Belgrade, Yeltsin would explode with

anger during telephone calls with Clinton andsometimes slam down the phone.1

Yeltsin’s prime minister, Yevgeny Primakov,was flying to Washington on 23 March 1999. Hehad talks planned with President Clinton, Vice-President Al Gore and the International MonetaryFund. His mission was to secure multi-billion-dollar loans to help stabilise the Russian economy,still reeling from the financial collapse of August1998. According to Primakov’s assistant,Konstantin Kosachev, the prime minister calledGore during a refuelling stop at Shannon in Ireland,and asked: ‘Are you going to bomb Yugoslavia?’Gore replied: ‘I cannot tell you anything, nodecision has been made.’2

The government plane took off for the flightacross the Atlantic. In the back were Russianbusiness tycoons and officials, drinking vodka andplaying dominoes. Suddenly, after four or fivehours, Primakov received a call on a crackly,encrypted phone line. It was Gore telling him thatNATO air strikes were, in fact, about to begin.Primakov at once called Yeltsin, checked with the

pilot whether they had enough fuel to return toShannon, and then went through to the cabin toinform the businessmen that the trip wasabandoned: doing business with the Americans atthis moment would be inappropriate.

The reaction was telling. The tycoons, allowingtheir patriotism to outweigh their business acumen,broke into applause. ‘It was very emotional,’ saysKosachev. The decision to turn the plane around inmid-flight was meant to send a signal of Russia’sprofound displeasure. Over the next days the samefeelings spilled out onto the streets, as thousands ofRussians protested outside the US embassy inMoscow.

On his final presidential visit to Moscow a yearlater Clinton found the wound was still festering.Putin presented himself as a man who would nolonger allow Russia to be ignored or pushedaround. For two days he hammered home hiscriticism of America’s plans for a unilateralmissile defence shield. Then on the final morning,as they held a farewell meeting in the Kremlin,Putin issued a dark threat that if America went

ahead with its plans, Russia’s response would be‘appropriate’ and ‘maybe quite unexpected,probably asymmetrical’ – in other words, theRussians would not try to match the sophisticatedand costly US system but would take means torender it ineffective. That could mean anythingfrom building huge numbers of nuclear missiles tooverwhelm the proposed shield, to destroying theAmerican installations as soon as they were set up.

Clinton heard out Putin’s homily, then turned tohis aide, Strobe Talbott, and murmured, ‘I guessthat guy thought I didn’t get it the first time. Eitherhe’s dense or thinks I am. Anyway, let’s get thisthing over with so we can go see Ol’ Boris.’3

With relief, the Americans then drove out of theKremlin to bid farewell to Clinton’s friend, ex-President Yeltsin, now living in retirement in hiscountry dacha. There was a surprise waiting forhim. By the time he got there Putin had calledYeltsin and asked him to rub in the message evenharder. Russia, he said, would not put up with anyAmerican policy that threatened Russian security.When the tirade was over, Clinton steered the

conversation back to his own concerns aboutRussia’s future. His parting words, as related byhis adviser Strobe Talbott, were quite remarkable– and revealing of the American view of Russiaafter the fall of communism.

‘Boris,’ he said, ‘you’ve got democracy in yourheart, you’ve got the trust of the people in yourbones, you’ve got the fire in your belly of a realdemocrat and a real reformer. I’m not sure Putinhas that. You’ll have to keep an eye on him and useyour influence to make sure that he stays on theright path. Putin needs you, Boris. Russia needsyou ... You changed Russia. Russia was lucky tohave you. The world was lucky you were whereyou were. I was lucky to have you. We did a lot ofstuff together, you and I ... We did some goodthings. They’ll last. It took guts on your part. A lotof that stuff was harder for you than it was for me. Iknow that.’

As he left Yeltsin’s dacha, Clinton turned toTalbott: ‘That may be the last time I see Ol’ Boris.I think we’re going to miss him.’

Clinton’s mawkish words clearly suggest he

thought that under Yeltsin things had gone verywell in Russia and Russia was where Americawanted it to be. In fact, things were not going well,and Russia did not want just to go whereverAmerica wanted it to be. In reality, what Americawas going to miss was a Russian leader who wascompliant to the point of submissiveness. Putinwould be anything but that.

Yeltsin’s RussiaThe West’s handling of post-Soviet Russia hadbeen just about as insensitive as it could havebeen. With Western corporations salivating at theprospect of a huge new market, Harvardeconomists hired by the Russian government urgedit to introduce unrestrained capitalism at breakneckspeed, with scant regard for the sensitivities of –and consequences for – the Russian people. Theirideas were eagerly taken up by Yeltsin’s ownreformers, led by the economist Yegor Gaidar,who had been inspired by the ‘shock therapy’ thathad transformed countries like Poland a couple of

years earlier. Yeltsin had appointed him to ‘givethe people economic freedom, and remove allbarriers to the freedom of enterprises andentrepreneurship’. Within a few years millions ofRussians were reduced to extreme poverty, while ahandful of go-getters and former communistofficials turned themselves into billionaireoligarchs, snapping up the country’s resources fora fraction of their value.

Undoubtedly, under Yeltsin Russians enjoyedFreedom, with a great neon-lit, capital F, such asthey had never known in their nation’s thousand-year history. The 1990s were riotous years. Theysaw an explosion of energies that had been pent upfor 70 years of communism. Any Russian with a bitof cash and enterprise could set up a smallbusiness, if only a little stall selling Snickers barsand vodka. Russians were free to travel abroad, toread whatever they wished, say what they likedand demonstrate against their leaders. There werecompetitive elections and political parties.National television stations broadcast biting satireand no-holds-barred critiques of Kremlin policies.

New private banks sponsored ballets and concerts.Shops quickly filled up with consumer goods andfoodstuffs that Soviet citizens had only glimpsed inforeign films. After the dark decades of totalitarianrule, people now felt unafraid. There wasoptimism and hope. Certainly that’s how Russialooked to most Western observers. Evidently, it’show Bill Clinton saw things.

And yet, when I look back at my notebooks anddispatches from the time, I am reminded that mostRussians had a very different impression. Myreports for the BBC chronicled a decade of shameand humiliation.

Yeltsin’s Russia was a country that seemed tobe run by thugs. You saw them barrelling down thehighways in their cars with darkened windows, orordering thousand-dollar bottles of wine in the bestrestaurants and snarling contemptuously at thewaitresses, or shopping in horrendouslyoverpriced boutiques, and occasionally gunningeach other down in broad daylight. Contractkillings were commonplace, as Russia’s mafia-style gangs carved up territories and businesses.

The BBC’s offices were located in a hotel andbusiness centre part-owned by an American, PaulTatum. After a dispute with his Chechen businesspartner, Tatum was riddled with bullets fired froma Kalashnikov rifle – at 5pm as he walked into ametro station near the hotel. His killer was neverfound. On another occasion I found myself in atraffic jam, and as I slowly edged forward noticedthat a little hold-up was going on at the side of theroad – again in broad daylight. Several men werepointing their guns at the head of some poor guylying on the ground. On yet another ordinary day inMoscow a restaurant was raided, and we all threwourselves to the floor while arrests were made. Toget into my local supermarket, you had to walk pastguards wearing fatigues and cradling AK-47s. Allthe early new capitalism was accompanied byviolence and threats: whether you managed a five-star hotel or sold souvenirs from a trestle table onthe Arbat, you paid protection money to one mafiagang or another.

On the outskirts of the major cities, especiallyMoscow, the so-called ‘New Russians’ built

mansions with swimming pools, wine cellars andfashionable turrets, all hidden from view behind15-foot fences. They represented a tiny proportionof the population. Millions meanwhile wereimpoverished by the economic reforms that startedin 1992. The sudden liberalisation of prices led tosoaring inflation. Ordinary Russians lined thepavements selling off their belongings. The verycentre of Moscow became a huge flea-market. Ivividly remember one man in particular – amiddle-aged scientist with a PhD – selling oldrusting padlocks and other bric-a-brac.

Other scientists emigrated in search of work thatwould give them a decent wage, many of themtaking Russia’s strategic knowledge and secretswith them, leaving their country devoid of its bestbrains just when it needed them.

Railway stations filled with beggars andhomeless people. The Kursky vokzal – Moscow’smain station for southern destinations – became aDickensian dosshouse full of pickpockets and sickpeople. Amputees from the first Chechen war(1994– 96) began to clump around metro carriages

asking for alms.Business, of sorts, spread everywhere – most

visibly in the shape of tiny kiosks sellingsuspicious-looking alcohols and foodstuffs. Meat,unfit for human consumption, was sold atmarketplaces that sprang up spontaneously onpieces of waste ground, which became breedinggrounds for rats and disease.

Desperate people sank their savings intopyramid schemes that invariably collapsed,leaving them penniless. In 1992 the governmentissued privatisation vouchers to every citizen. Theidea was that these could be exchanged for sharesin enterprises being privatised. In practice millionsof people just sold them or gave them away andthey ended up largely in the hands of a few shrewdentrepreneurs or state enterprise managers whothereby became Russia’s new capitalist owners.

Industry collapsed. Workers were not paid, orwere paid several months in arrears, and oftenwith goods – towels or soap or tampons – ratherthan money. Enterprises themselves traded witheach other by barter. A once proud country

received shipments of food aid – sugar andmargarine from the European Union’s surplusstocks and US army rations left over from the GulfWar. A superpower was now holding out abegging bowl.

Flying to Vancouver in April 1993 to askPresident Clinton for help, Yeltsin pointed out:‘Remember that East Germany needed $100 billionto get rid of the communist monster.’ He returnedwith the promise of just $1.6 billion, much of it inthe form of credits and food aid. Some wonderedwhether the West lacked imagination. Did Russianot need a ‘Marshall Plan’ to rebuild its decrepitSoviet-era infrastructure, which was in little bettershape than Germany’s after the Second WorldWar?

Western consultancies probably profited morefrom Western aid packages than the Russians did. Iremember interviewing the manager of a smallMoscow bakery who had been on a month-longmanagement course, paid for by Westerngovernments, with some consultancy in England.‘All I really needed,’ she told me, ‘was the money

to buy some top-class bakery equipment. I knowhow to manage my company!’

Russian society was truly battered by the abrupttransition from communism. People had literallylost their own country: the Soviet Union, a land of250 million people in 15 national republics,splintered. Twenty-five million Russians suddenlyfound themselves residents of foreign countries,stranded in what became known as the ‘nearabroad’. Inhabitants of Siberia could no longerescape to holiday in the Crimea (now in Ukraine)or even in Moscow, because air fares were beyondtheir reach. I was astonished, on a trip to Siberia,to hear people calling European Russia the‘mainland’, as though they were marooned on aremote island in the middle of an ocean.

There was little sign that the Kremlin’s Westernadvisers understood how to handle this dislocatedsociety. Western governments didn’t seem tonotice the chaos and squalor – or they didn’t care,so obsessed were they with the vision of buildingcapitalism, regardless of its immediate impact.Western corporations only saw a massive new

marketplace for their goods. A strange Russianphrase, Produkt kompanii Prokter end Gembl(produced by Proctor and Gamble), boomed out atthe end of every other TV ad like some newpolitical slogan. I think Russians must have beendriven mad by those words. They seemed toreplace ‘Long live the Communist Party’seamlessly, but instead of promising a radiantfuture they promised Head & Shoulders andPampers, which few Russians could yet afford.

American consultants in sharp suits swarmedaround, cooing over Nizhny Novgorod’sprivatisation projects and its pioneering youngreformers. The city on the Volga, previouslyknown as Gorky, was the first to sell off majorchunks of the state’s assets to ordinary people. Inmany ways it really was inspiring. I rememberwatching go-ahead Russians, keen to set up theirown private businesses, inspecting 195 state-owned trucks and vans, many of them in a dreadfulcondition, and then bidding for them at an auction.The problem for me, and I suspect for manyRussians, was the sight of so many foreigners

supervising the process. To all intents andpurposes it looked as if America was selling offRussia.

For those who took the leap – ‘collectives’ ofshop-workers who got together to buy and run theirown stores, for example – it really worked. Asproprietors, desperate to attract customers, they setabout transforming their businesses with a zeal thatsoon swept away the drab Soviet shoppingexperience. But for those on the other side of thecounter, whose savings and pensions wereobliterated by hyper-inflation, it was a verydifferent story. Life-expectancy plummeted,alcoholism rose and thousands of quack doctors,psychics and ‘white witches’ stepped in to takeadvantage of the general mood of desolation.

And then there was the Chechen war. Yeltsinhad encouraged Russia’s regions to assert theirown powers, but Chechnya, a small Muslimrepublic in the northern Caucasus, went so far as todeclare itself independent. To accept this mighthave created a precedent which could lead to thebreak-up of the Russian Federation, so in

December 1994 Yeltsin ordered an invasion of therepublic. It was an all-round disaster. Thousandsof poorly trained Russian troops died, andhundreds of thousands of Chechens were eitherkilled or displaced to neighbouring republics. Thecapital, Grozny, was reduced to rubble. TheChechens became radicalised and embittered,rekindled their Islamic faith, which had beendormant in the Soviet period, and thousands of menjoined the separatist militias – who eventuallyforced the Russian army out of their country. It wasan ignominious defeat, which led to Chechnya’s defacto independence by the end of 1996. The rebelsalso took to staging terrorist attacks inside Russiaitself: in the summer of 1995 they seized more thana thousand hostages in a hospital in the southerntown of Budyonnovsk. The authorities tried tostorm the hospital (leading to the deaths of at least130 people) but then allowed the hostage-takers toescape.

By early 1996 Boris Yeltsin’s popularity hadslumped to a barely measurable level. Not onlywere his reforms unpopular and the war in

Chechnya a disaster, but the president himself hadbecome an embarrassment on account of hisfrequent drunken appearances. There is little doubtthat the communist leader Gennady Zyuganov couldhave been elected president in that summer’selection if it had been fair. Instead, the country’snew oligarchs – billionaire businessmen whofeared losing their new-found wealth if thecommunists came back – banded together to ensurea Yeltsin miracle. These were men who in a ‘loansfor shares’ scheme initiated in 1995 acquiredRussia’s largest state industries, including most ofits oil and gas reserves, for a fraction of theirworth, in exchange for bailing out the pennilessgovernment. Now they bankrolled Yeltsin’scampaign and used the national television stationsthey owned to skew election coverage entirely inhis favour. Yeltsin swept back to power – and theWest sighed with relief. For Clinton and otherWestern leaders, ‘democracy’ and the ‘freemarket’ had been saved in Russia. And that was allthat mattered.

What most Western leaders failed to appreciate

was the psychological trauma that Russians, asindividuals and as a nation, were going through.Vladimir Putin was far more in tune with it.

As the American scholar Stephen F. Cohenwrote, the received wisdom in the US was that‘since the end of the Soviet Union in 1991, Russiahas been a nation ready, willing, and able to betransformed into some replica of America’.4 Leaveaside the immense cultural and historicaldifferences that make Russia unlikely ever tobecome a ‘replica’ of America. The fact is thatRussians were thrown in at the deep end, with notime even to adjust to freedom.

The celebrated Soviet-era poet and singerVladimir Vysotsky predicted the disorientationway back in 1965, at a time when he could onlydream of what it might be like to be released fromthe communist straitjacket:

They gave me my freedom yesterday,What on earth am I going to do with it?

The West assumed that Russians would simply

know how to use their liberty, as if it wassomething totally natural – as if Russians were justAmericans who had been lumbered withcommunism for a few years: take away theconstraints, give them a free market and everythingwill be fine. Toby Gati, Clinton’s Russia adviserwho prepared the first aid package to Russia,admits: ‘Perhaps we in the US had a very narrowview of Soviet society and we overestimated theRussians’ desire to live by our rules. We startedwith the assumption that the transformation wouldbe quick and the chaos, which, incidentally, wasnot seen as chaos but as a transitional period,would soon be replaced by normal life.’5

But in the 1990s many Russians foundthemselves drowning in the tide of capitalismrather than riding it. Moreover there was a deepresentment at the sense of being instructed byoutsiders in how to be ‘civilised’. It is true thatcommunist ideology was paper-thin, and mostRussians jettisoned it easily. But they did not losecertain ways of thinking that predate the communistera and lie deep in the Russian psyche. It was

common, and still is, to hear Russians regret theloss of the ‘togetherness’ they felt undercommunism. The ‘collective’ was not a Sovietinvention, but had roots in Russian history. But itrubbed against the grain of the individualistWestern mores being forced upon them now.

The picture I have described above is a bleakone, perhaps a little bleaker than the overallsituation, because undoubtedly there were greatjoys and advances under Yeltsin too. But it is thedarker side of life in the 1990s – so easilyoverlooked in the West – that provided the fertilesoil into which Putin would plant his ideas.

From kommunalka to KremlinThis is a book about Putin in power, not abiography, but a glance at his earlier years isrevealing. His background and path to the highestoffice give clues to the contradictory behaviour hewould exhibit as president: the democrat whodoesn’t trust democracy; the Westerniser whoseunderstanding of the West is flawed and limited; a

man who believes in the free market but whoseworld view was formed in the communist past; afiery believer in the Russian state, with the icy,ruthless attitude of the ex-KGB man towards its‘enemies’.

Vladimir Vladimirovich Putin was born in 1952in Leningrad, a city still being rebuilt from therubble of the Second World War, when it wasbesieged and bombarded by the Germans for 900days. His childhood was spent in a kommunalka, acommunal flat, in which his family had one roomand shared the kitchen and toilet with otherfamilies – an experience with bitter-sweetmemories for many Russians. On the one hand theconditions were awful – there was no bathroom,no hot water, and rats in the stairwell; on the otherhand, communal living and the shared experienceof post-war reconstruction did much to reinforcethe optimistic communist ideology of the day. Theyoung Putin’s thinking would have been shapedentirely by crude Soviet propaganda. His was not adissident or intellectual family which might havelistened to foreign radio broadcasts or indulged in

subversive discussions. At school he learned thatthe West was an evil world where capitalistsexploited the workers and prepared for waragainst the USSR; life in his own country, he wastold, was immeasurably happier, thanks to the wiseleadership of the Communist Party. Even the brief‘Thaw’ under Nikita Khrushchev, after Stalin’sdeath, was over by the time Putin was 12, so hissecondary school years passed under the aegis ofLeonid Brezhnev – a period marked by growingmilitarism, confrontation with the West, politicalrepression and ideological rigidity. It was duringthese years that the young Putin showed an interestin joining the party’s enforcement machine, theKGB, an ambition he realised only after graduatingfrom Leningrad’s law school in 1975.

Putin says he did not even think about the massterror inflicted by the KGB’s predecessor, theNKVD, under Stalin. Indeed, he probably knewnext to nothing about it. ‘My ideas about the KGBwere based on romantic stories about the work ofintelligence agents,’ he says. ‘Without anyexaggeration you could say I was the successful

product of a Soviet patriotic upbringing.’6

He would have known exactly what the KGB gotup to, however, when he spent his first decade asan officer in Leningrad during the late 1970s andearly 1980s. This was the period when itincarcerated dissidents in labour camps and mentalasylums, confiscated foreign literature, jammedforeign broadcasts, controlled all contacts withforeign visitors, vetted the few Soviet citizensallowed to travel abroad and in every possibleway helped the Communist Party to exercise totalcontrol over society. Abroad, its task was tosubvert Western democracies, steal military andindustrial secrets, spread communism todeveloping countries and help the secret servicesof the ‘fraternal socialist states’ of Eastern Europeto crack down on dissent. We do not know exactlywhat Putin did during those years, but one can inferfrom his work in counter-intelligence and inmonitoring foreigners in Leningrad that he wastotally committed to the Soviet cause and vigilantto the dangers of Western subversion. To this dayhe is crushing in his contempt for those who

‘betray the motherland’ and (as we saw in 2010when he welcomed home ten Russian spies whowere uncovered in the US) full of admiration forthose who follow his own career path as a secretagent.

Sergei Roldugin, a family friend, recalls thatwhen he asked the young Putin at the time exactlywhat he did in the KGB in Leningrad, he repliedenigmatically: ‘I am a specialist in mingling withpeople.’

In 1985, promoted to the rank of major, Putinwas sent to mingle with the people of communistEast Germany. He was based in Dresden, and sayshis job was ‘political intelligence’ – recruitinginformants and gathering information aboutpolitical figures and about the plans of ‘enemynumber one’ – NATO. At this stage he must stillhave been ideologically driven, and still he had nofirst-hand experience of the West. Neither did heexperience at first hand the remarkable awakeningof the Soviet Union under Mikhail Gorbachev’spolicies of perestroika (restructuring) andglasnost (openness). While Moscow newspapers

and theatres were tearing up the falsified images ofthe Soviet past and slowly dropping the clichésabout Western villainy, Putin was based in one ofthe communist bloc’s most repressive states. TheEast German leader, Erich Honecker, resisted thewinds of change blowing in from Moscow to thelast. Putin would have witnessed the gatheringunrest in East Germany, however, whichculminated in the fall of the Berlin Wall in late1989. Indeed, in the weeks leading up to thecollapse of communist power, it was precisely inDresden that the peaceful revolution began, withdemonstrators taking to the streets to protest – rightunder Putin’s nose.

So Russia’s future leader had an unusual vantagepoint from which to observe the collapse ofcommunism. While missing the Gorbachevrevolution at home, he saw at close quarters howEast Europeans seized their destiny and wrestedthemselves free of the Soviet orbit. In his KGBrole he was also scrutinising NATO’s response,and will have been keenly aware of the verbalpromise allegedly given to Gorbachev by the US

secretary of state, James Baker, during the Germanreunification process, that the alliance would nottake advantage of the collapse of communism toexpand into the former Soviet bloc.

When the game was up for the East Germancommunists – and for the Soviet Union’s hegemonyover the country – Putin frantically incinerated allthe most sensitive files in his Dresden office, andhad to brandish a pistol to fend off a rioting crowdthat was intent on ransacking the place, havingalready stormed the offices of the East Germansecret police, the Stasi. Later Putin claimed hecould understand the crowd’s reaction to the Stasi:‘They were tired of the Stasi’s absolute control.Society was totally intimidated. They saw the Stasias a monster.’ (There is no indication that herecognises that Russians had the same view of theKGB.)

For Putin the most vexing part of the wholeepisode was that when the angry crowd wasthreatening his offices, and he called the Sovietmilitary chief in the Dresden district for help, hewas told they could do nothing without a green

light from Moscow. ‘But Moscow,’ says Putin,‘was silent. I had the sense that the country didn’texist any more. It was plain to see that the SovietUnion was sick. And the sickness was a deadly,incurable one called paralysis. The paralysis ofpower.’

Putin says he understood that Soviet controlover half of Europe, based as it was on repressionand barbed wire, could not go on for ever. But headmits he resented the loss of influence andregarded it as a national humiliation. ‘We justabandoned everything and left.’

It was at this point that Putin made an abruptlife-change that introduced him for the first time tooutlooks and influences that would challengeeverything he had believed in as a schoolboy, as astudent and as a KGB agent. In January 1990 hereturned from Germany to his home city, whichwould soon be renamed St Petersburg. Whileremaining at first on the KGB’s payroll, he foundwork in the foreign relations department ofLeningrad University, and then as assistant to thechairman of Leningrad City Council, a former

economics professor named Anatoly Sobchak. Oneof the leading free thinkers of the perestroikaperiod, Sobchak was soon elected mayor of StPetersburg, and in June 1991 he put Putin in chargeof the city’s foreign relations at a time when it hadpretensions of becoming a major financial andinvestment centre. Sobchak later appointed Putinhis deputy.

The former perfect ‘product of a Soviet patrioticupbringing’ thus became exposed not only to thedemocratic views of Sobchak but was alsoplunged into the alien world of Western trade andfinance. When communist hardliners (includingPutin’s KGB chief, General Kryuchkov) staged acoup against Gorbachev in August 1991, Putin sayshe was at Sobchak’s side, drumming up resistancein support of democracy. He said later he believedthe plotters’ intention, of preventing thedisintegration of the USSR, was ‘noble’, but theyin fact achieved the exact opposite. By the end ofthe year the Communist Party had been swept frompower and the Soviet Union broke up. It was awatershed for Putin: ‘All the ideals and goals I had

when I joined the KGB collapsed.’Putin’s tenure as deputy mayor was not without

controversy. Deputies at the city council tried tohave him dismissed for corruption following ascandal concerning food imports. He survived, butwhen Sobchak was voted out of office in 1996Putin too found himself without a job.

Through a combination of luck andacquaintances, Putin soon found himself inMoscow, quickly working his way up through theranks of the Kremlin bureaucracy.7 He becamedeputy chief of staff to President Yeltsin in March1997, director of the KGB’s successororganisation, the FSB, in July 1998 and(simultaneously) head of the National SecurityCouncil in March 1999.

His patrons were the group of people known asthe Family – President Yeltsin’s inner circle ofadvisers, which included his daughter Tatiana, hisformer chief of staff (and later Tatiana’s husband)Valentin Yumashev, Yeltsin’s current chief of staffAlexander Voloshin, and the influential businesstycoon Boris Berezovsky, who owned 49 per cent

of Russia’s main state television channel, ORT,and effectively controlled it.

Just as the Family had arranged Yeltsin’s re-election in 1996, so they would soon securePutin’s appointment as prime minister – with theintention of moving him into the presidency asYeltsin’s successor. They had been impressed byPutin’s loyalty. As head of the FSB he effectivelystymied criminal investigations into large-scalecorruption and money laundering, in whichmembers of Yeltsin’s family and senior Kremlinofficials were allegedly implicated. (One of theofficials, Pavel Borodin, was accused ofembezzling fabulous sums during the refurbishmentof Kremlin buildings. He happened to be the manwho had brought Putin from St Petersburg andgiven him his first job in the administration.) Putinalso helped his former mentor Sobchak evadeprosecution on corruption charges. Loyalty wouldlater turn out to be a striking feature of Putin’smake-up. Just as he found his own loyalty to theFamily repaid, so he as president would richlyreward those most loyal to him – and punish those

who opposed him. The Family were not let down:Putin’s first move on becoming acting president in2000 would be to sign the decree granting Yeltsinand his family immunity from prosecution.

In the summer of 1999 Yeltsin’s coteriedispatched Berezovsky to talk with Putin, who wason holiday with his family in the French resort ofBiarritz, and offer him the job of prime minister.Putin demurred, apparently unsure of his abilities,but when he returned to Moscow President Yeltsinwould not take no for an answer.8

During this dizzy year of his career, Putin foundhimself dealing with events that would leave adeep impression on his thinking. In March 1999three former members of the Soviet bloc, Hungary,Poland and the Czech Republic, joined NATO.Whatever the truth about the alleged guaranteesgiven to Gorbachev that NATO would not moveeastwards (and American officials firmly deny thatsuch a promise was made), this was the first stageof what Russia regarded as an unnecessary andthreatening advance of a military alliance towardsits own borders. The issue would dog the next

decade of Putin’s rule.Just 11 days after NATO’s enlargement, the

organisation launched its air strikes against Serbia,with all the repercussions described earlier in thischapter. And in August the troubles in Chechnya,which had been smouldering quietly for the pasttwo and a half years, suddenly burst into flames –igniting a visceral fury in Putin that would informhis actions at home and abroad for many years.Fighting terrorism became an obsession.

Since the withdrawal of Russian troops fromChechnya at the end of 1996, the republic hadenjoyed de facto autonomy and becomeincreasingly lawless. Its relatively moderateelected government was undermined by warlordssuch as Salman Raduyev and Shamil Basayev, theman who had been behind the hostage-taking inBudyonnovsk. Kidnapping became commonplace.After the murders of six Red Cross workers andfour kidnapped telecoms workers, foreignersscarcely dared set foot in the republic. Islamicfundamentalism took hold, and some of thewarlords developed links with Middle Eastern

extremist groups, including al-Qaeda.On 7 August 1999 Basayev and a Saudi-born

Islamist, Ibn Al-Khattab, launched a well-plannedinvasion of some 1,500 men into Chechnya’sneighbouring republic, Dagestan. Their aim was toestablish an Islamic state there – a first steptowards the creation of an Islamic superstatethroughout Russia’s northern Caucasus region. Theattack also catapulted Putin to the highest office.The next day Yeltsin appointed his steely securitychief as prime minister to tackle the problem.

Putin’s sudden emergence from nowhere as thecountry’s future leader was astonishing. He wasstill virtually unknown in the country, and indeedto most of the political elite. But in the months thatfollowed he became the new face of Russia –tough, energetic and ruthless in responding to evermore audacious Chechen terrorist attacks.

In the space of two weeks in September fourbomb explosions destroyed apartment blocks in thecities of Buynaksk, Moscow (twice) andVolgodonsk. Almost 300 people were killed. Theattacks were blamed on Chechens and, together

with the invasion of Dagestan, provided Putin withthe excuse, if he needed one, to launch the secondChechen war. At a meeting with Bill Clinton on 12September an agitated Putin drew a map ofChechnya and described his plan to annihilate theseparatists. ‘These people are not human,’ hesnarled to the press afterwards. ‘You can’t evencall them animals – or if they’re animals, they’rerabid animals ...’

The apartment bombings were so convenient inproviding Putin with the pretext to go to war, andthereby to improve his ratings, that some Russiansbelieve they were carried out by the FSB.Conspiracy theories are so rife – and so outlandish– in Russia that you would have to rewrite historyif you believed them all. But real suspicions wereraised by a fifth incident, in the city of Ryazan,where police acting on a tip-off foiled an apparentplot after discovering three sacks of white powder,which they identified as explosive, together withdetonators, in the basement of a block of flats.Thousands of local residents were evacuatedwhile the sacks were removed and made safe.

Putin himself praised the vigilance of the peoplewho had spotted the sacks being carried into thebuilding. When men suspected of planting thebombs were arrested, however, they turned out tobe FSB agents. The FSB chief then claimed it hadall been an ‘exercise’ to test responses after theearlier explosions and that the bags only containedsugar. The local FSB in Ryazan knew nothingabout such an exercise, however, and issued astatement expressing surprise.

Several other mysterious circumstancessurround the apartment bombings. For example, thespeaker of the State Duma announced to parliamentthat he had just received a report of the apartmentbombing in Volgodonsk on 13 September – the dayof one of the Moscow bombings, but three daysbefore the Volgodonsk explosion. Had someonewho knew in advance about all the planned attacksgot the dates mixed up? But attempts to have theincidents properly investigated in Russia havebeen thwarted, and the Kremlin reacts with fury toquestions on the subject. Moreover, two membersof an independent commission that tried to

establish the facts were murdered and a third waskilled in a car accident, while the commission’sinvestigating lawyer was arrested and jailed foralleged illegal arms possession. The journalistAnna Politkovskaya and the former KGB agentAlexander Litvinenko, both of whom investigatedthe bombings, were murdered in 2006.

The second Chechen war was intended toavenge the humiliation suffered by Russia in thefirst, and to put a halt to what Putin apparentlyregarded as an Islamist threat to the entire country.One of his closest advisers told me on condition ofanonymity that Putin feared his tenure as primeminister might last only a few months (like that ofhis predecessors) and he wanted to use the time toprevent Russia from falling apart. ‘The Checheninvasion into Dagestan was a signal from thebandits that they could go further, along the Volgariver into some of our Muslim republics –Bashkortostan and Tatarstan.’

I have never heard Putin (or any other Russianleader) speak about the real grievances of theChechen people – their mass deportation from their

homeland to Central Asia under Stalin, theswamping of their culture and language by theRussians during the Soviet period. Nor is theremuch awareness of the fact that it was the brutalRussian invasion in 1994 that radicalised theChechen fighters and encouraged Islamicfundamentalism – of which there was not a whiffwhen I visited the republic before the first war. Itwas the war, and the atrocities committed byRussian forces, that turned mere separatists intoideologically driven terrorists. Without thatunderstanding, Putin’s new war was bound to makematters even worse.

He soon began to reveal the sharp tongue andearthy language that became his trademark. Askedabout the ferocity of the Russian campaign, hereplied, on 24 September: ‘We’ll pursue theterrorists wherever they are. If they’re in an airportwe’ll get ’em there. If we catch ’em – excuse theexpression – in the toilet ... we’ll wipe ’em outright there, in the outhouse. End of story.’

Putin’s campaign quickly raised him out ofobscurity. But he was not yet the country’s most

popular politician. One of his predecessors asprime minister, Yevgeny Primakov, had publiclydenounced the corruption in Yeltsin’s entourageand declared his intention of running for president.Together with the mayor of Moscow, YuriLuzhkov, he created a political bloc, Fatherland–All Russia, which looked set to do well inparliamentary elections in December, giving him aspringboard for the presidential election scheduledfor June.

It was at this point that Boris Berezovskystepped in to ensure the victory of the Family’scandidate, Putin. Berezovsky threw the entireweight of his ORT channel behind him, whilemounting a sustained smear campaign againstPrimakov and Luzhkov. He hired a well-knownpresenter, Sergei Dorenko, who specialised inscandal, sensation and brazenly biasedcommentary. Berezovsky was delighted to let himtake fire at Primakov, who as prime minister hadhad his companies raided and threatened to jailbusinessmen like him for economic crimes. Nightafter night, Russia’s main TV channel harped on

about Primakov’s old age and infirmity andLuzhkov’s alleged corruption, while glorifyingPutin’s heroics in Chechnya.

Meanwhile the inner circle – Berezovsky,Yumashev and Tatiana Dyachenko – met secretlyat the dacha of Alexander Voloshin, Yeltsin’s chiefof staff, to create a political force to support Putin.In September, three months before the Dumaelection, a new party was born, called Yedinstvo(Unity). It had no roots, no philosophy, practicallyno policy other than its support for Putin, but it didhave the unabashed endorsement of Berezovsky’sORT and several of his newspapers. On 19December it won almost twice as many votes asFatherland–All Russia. The scene was now set forYeltsin to resign on New Year’s Eve and handover power to his prime minister and chosensuccessor.

The day after the Duma election was ‘ChekistsDay’. Continuing a Soviet-era tradition, mostprofessions in Russia have one day in the calendarin their honour, and this was the day of homage tothe country’s present and former secret police

(originally known as the Cheka). In the morningPutin restored a plaque on the wall of the FSBheadquarters, the Lubyanka, in memory of YuriAndropov, the KGB chief when Putin joined up.The plaque had been removed in the de-Sovietising Yeltsin years. At a gala ball in theevening the prime minister made a speech to hisformer colleagues, and joked: ‘I want to report thata group of FSB operatives, sent to workundercover in the government, is successfullycarrying out the first stage of its mission.’

The second stage was about to begin. Ten dayslater, Yeltsin resigned and Putin assumed supremepower in Russia.

2

COURTING THEWEST

‘I want Russia to be part ofEurope’

Russia’s relations with NATO had been frozenever since the allied bombing of Yugoslavia inMarch 1999. ‘NATO’s representative in Moscowhas been told to pack his bags,’ announcedRussia’s foreign minister, Igor Ivanov. ‘There willbe no contact with NATO, including its secretary

general, until the aggression against Yugoslaviastops.’

But at the beginning of 2000, shortly afterVladimir Putin became acting president of Russia,the telephone rang in the secretary general’s officeat NATO headquarters in Brussels. It was noneother than Igor Ivanov, and George Robertson, thenew NATO chief, was taken aback. He had arrivedin Brussels in October and had decided one of hisfirst tasks should be to get Russia ‘back into thesecurity fold’, but until now nothing had happened.

‘If you were thinking of coming to Moscow,’said Ivanov, coyly warming to his theme, ‘I want tosay that you might find that this would bewelcomed.’1

And so it was that Robertson became the firstmajor Western politician to meet the new Russianpresident. He flew into Moscow in February on aplane provided by the German air force.

Putin seemed to be tickled by the idea, and thesight of a Luftwaffe jet in Moscow helped to breakthe ice.

‘Why did you come on a German plane?’ he

asked.Robertson quickly realised that the word

‘Luftwaffe’, emblazoned across the side of hisplane, evoked a certain sensitivity in Russia inview of the horrors its bombers had inflicted in theSecond World War. He explained that NATOitself had no planes, so he had to borrow from themember states.

‘Hmm,’ said Putin, practising his English.‘Maybe next time, secretary general, you shouldcome in a British plane.’

Robertson had brought a gift for him – a book inEnglish about the tsarist court, which he had foundin an antiquarian bookshop. The Russian leaderwas delighted. It turned out that he was making aserious effort to learn English, now that hisprofession of ‘mingling with people’ wouldinclude a great many foreign leaders.

‘I like to read these English books out loud topractise,’ he told Robertson, and then added, ‘sonow my dog is fluent in English.’

There was substance to the charm offensive aswell as jokes. Robertson recalls Putin being quite

blunt and to the point: ‘He was less confident thanhe was eventually to be. He was very new to thejob. He wasn’t even in the job – he was still actingpresident.’

‘I want to sort our relationship out,’ said Putin.‘It’s not constructive at the moment, and I want toresume relations with NATO. Step by step. It can’thappen overnight – and a lot of people disagreewith me on this.’ Putin gestured at his defenceminister, Marshal Sergeyev, and his foreignminister, Igor Ivanov. ‘But I know what I want, andI want Russia to be part of Europe. That’s whereits destiny is. So let us work out how best we cando that.’

The British ambassador told Robertson he wasimpressed by such a bold, early foreign-policydecision. The relationship had been so fractiousthat for him to say ‘we are going to resume it’ wasa big thing. Robertson sensed that Putin wanted tohave ‘an uncluttered relationship’ – to sweep asidethe inherited obstacles and talk about the bigissues. ‘They wanted to be taken seriously as amajor player in the world.’

One other world leader was keen to oblige.Prime Minister Tony Blair saw a chance to makeBritain Russia’s ‘partner of choice’ in Europe anddecided to ‘get in early’ with a trip to Russia in thefirst half of March – before Putin was even electedpresident (the election was due on 26 March). Hewas more willing at this stage to turn a blind eye toPutin’s ruthless campaign against Chechnya thaneither Chancellor Gerhard Schröder of Germany orPresident Jacques Chirac of France. The ForeignOffice, too, was wary of the ex-KGB man whowas apparently presiding over what manyconsidered to be atrocities in Chechnya. ButBlair’s own advisers in Downing Street arguedthat he was a new type of leader, someone worthinvesting with early. ‘In my experience,’ saidBlair’s chief of staff, Jonathan Powell, ‘KGBofficers were the more outward looking membersof the old Russian nomenklatura. We decided toreach out to him actually during the electioncampaign rather than wait till after when therewould be a long queue of people wishing to seehim. It was risky, but we thought it was the right

thing to do, and it did work.’2

Powell says Blair scarcely focused on theChechnya problem until he was on the plane andstarted reading his briefs. ‘The brief produced bythe Foreign Office got him increasingly irritated –because even at that stage Tony was concernedabout Islamic terrorism, and he could see thedanger of it and thought we were being a bit“double standards” in the way we were dealingwith the Russian approach to it. So he decided onthe plane to cut Putin some slack on Chechnyawhen we did the press conference.’

Putin was delighted, and laid on a full tour of hishome town, St Petersburg, for the prime ministerand his wife, Cherie: the Hermitage art gallery,talks at the tsar’s glittering summer palace,Peterhof, and evening at Prokofiev’s opera Warand Peace at the Mariinsky Theatre. The only sourmoment came during the talks at Peterhof, when theBritish ambassador, Sir Roderic Lyne, sat downheavily on a spindly-legged antique chair andshattered it.

‘You’ll be paying compensation for that, I

hope,’ quipped Putin – ‘not entirely in jest’,according to one witness.

The visit achieved everything Blair wanted it to.Powell admits that Britain had felt excluded fromthe cosy relationship Yeltsin had had with theFrench and Germans (not to mention Bill Clinton),and now Blair had ‘inserted himself’. As soon asthe presidential election was out of the way – amere formality, which Putin won with 53 per centof the votes – Blair followed up by bringing him toLondon. There was an uproar in the press as the‘Butcher of Grozny’ was invited to meet the Queenat Windsor Castle.3

Blair did appear, for a time, to become Putin’schief Western contact. In November, when theAmerican presidential election hung in the balanceas ballot papers were recounted in the state ofFlorida, Putin called Blair for advice aboutwhether he should call George W. Bush tocongratulate him. Powell recalls: ‘Tony suggestedhe hold off for the moment until things were clear,and he was very grateful and didn’t make the call.It was interesting. It illustrated a sort of

relationship you wouldn’t normally have had withthe Russian president, and it made us feel ourinvestment had been worth it.’

Part of the calculation, of course, was thatBritish business would benefit from closerpolitical ties, so during his April visit to LondonPutin was taken to meet a group of leadingindustrialists. Lord John Browne, CEO of BP, wasimpressed: ‘He was a refreshing change.’ Thebusinessmen listened to Putin promising laws thatwould be stuck to, and a crackdown on corruption– and his cold, impassive demeanour made themfeel he meant it. Three years later, watched byPutin and Blair at a ceremony in London, BP and amajor Russian oil company, TNK, signed a dealfor a 50-50 partnership. At the time, BP’s $6.75billion outlay represented the biggest ever foreigninvestment in Russia. Both sides were happy –though there would be a bumpy road ahead, asPutin began to have second thoughts about sellingoff his nation’s strategic assets to foreigners.

Seeing Putin’s soulAs for America, Putin had already decided to sitout the rest of the Clinton term, and started puttingout feelers to George W. Bush’s team. TheRussians had long expected a Bush victory. Theyeven sent a team to the Republican PartyConvention in Philadelphia at the end of July 2000.One of its members, Mikhail Margelov, a Russiansenator and PR expert who had worked in Putin’selection team, said it was part of the new UnitedRussia’s outreach to ‘conservative parties all overthe world’, designed to create a right-of-centre‘brand’ for Putin’s party. They met CondoleezzaRice and other members of the Bush team – not forlong, but long enough to get invited back to theinauguration in January.4

On the day of the inauguration Rice sought out aRussian diplomat to convey a positive message onbehalf of the new administration to Putin. Rice wasa Russian-speaker and Soviet specialist, whowould be central to Bush’s Russia policy over thecoming years. Her message held out the prospect

of good, friendly relations – but certainly not of areprise of the Bill ’n’ Boris Show. Rice’s viewwas that Clinton’s cosy relationship with Yeltsinhad become too personalised, and far too softwhen it came to calling the Russians to book fortheir behaviour in Chechnya. In an article thatappeared in The Chicago Tribune on 31December 2000 she delivered a scathingdenunciation of the Clinton policy:

The problem for US policy is that the Clintonadministration’s ongoing embrace of Yeltsin andthose who were thought to be reformers around himquite simply failed. Clearly the United States wasobliged to deal with the head of state, and Yeltsin wasRussia’s president.

But US support for democracy and economic reformbecame support for Yeltsin. His agenda became theAmerican agenda.

America certified that reform was taking place inRussia where it was not, continuing to disbursemoney from the International Monetary Fund in theabsence of any evidence of serious change.

Thus, some curious privatization methods were hailedas economic liberalization; the looting of thecountry’s assets by powerful people either wentunnoticed or was ignored. The realities in Russiasimply did not accord with the administration’s scriptabout Russian economic reform.

On top of that, Rice knew there were tough timesahead because Bush was planning to press muchharder than Clinton ever did to pursue the goal ofbuilding a missile defence shield. She recalled inan interview: ‘Bush had been very clear that areorientation in the offence-defence relationship inarms control was going to be very important tohim, and that the ABM treaty was an impediment tomissile defence.’5

Still, for Putin the change of occupancy in theWhite House augured well, and the Russianslooked forward to getting on with building a newrelationship with George W. Bush after hisinauguration in January 2001.

The Russians were in for a nasty shock. InMarch the Americans announced they wereexpelling 50 Russian diplomats who were working

undercover as spies in Washington and New York.What the Russians did not realise – and to this day(judging from our interviews) apparently still donot realise – is that the expulsions also came as anasty surprise to the incoming Bush administration!The Russians assumed Bush had decided to send atough signal right from the start of his presidency.But in fact, he was merely clearing out a probleminherited from his predecessor.

The FBI chief, Louis Freeh, had identified the50 diplomats some time earlier, but the Clintonadministration had declined to expel them for fearof spoiling the special relationship with Yeltsin,just at the end of Clinton’s term. So now, with anew man in the White House, and knowing that hehimself would soon be leaving his job, Freehdecided to get this last piece of business out of theway.

Stephen Hadley, deputy national securityadviser to the new president, recalled in aninterview: ‘Freeh was very strong about the needto take action against this Russian network in theUnited States. My sense was that it’s something he

had wanted to do for a long time, but for a lot ofreasons in their last year of office, the Clintonadministration felt the timing was not right, whichmeant it was an issue that the new president had toconfront. Our judgement was that it could not beignored. Action needed to be taken and it needed tobe swift and early. These were real spies. Theywere not just diplomats. This was not being donefor political purposes, or to send a signal. Thedecision was made. It was not going to get anyeasier by kicking a can down the road.’6

The task of telling the Russians fell to Bush’ssecretary of state, Colin Powell. He called in theRussian ambassador, Yuri Ushakov, ostensibly fora courtesy call, a chance to meet the new secretaryof state. Powell opened with some banter: ‘Do youwant the good news or the bad news?’

‘Good things are for dessert,’ replied Ushakov.Powell served the hors d’oeuvre. He politely

explained that while there was a gentleman’sagreement that each side could have a certainnumber of spies in its embassies, the Russians hadgone way over the score. ‘We’ve identified about

50 of them. And you will get notice tomorrow ofwho they are and they will be asked to leave thecountry within the next few days. So I need you togo back to the embassy, crank up your fax machineand let Moscow know about this right away.’7

Ushakov at once informed his foreign minister,Igor Ivanov, who hit the roof. ‘It was completelyunprecedented,’ he recalls. ‘It was a politicallymotivated action. That was our assessment. Andwe thought it was done to show who rules theworld.’8

When the news reached the Kremlin, it could nothave hit a sorer spot. This was the job that Putinhimself had done for 16 years; these were hisfellow Chekists. He called a meeting of hisSecurity Council – the ministers in charge ofmilitary, foreign and security matters. Theydecided to mirror exactly what the Americans haddone – but make it worse for them. The head of theSecurity Council, Sergei Ivanov (also a formerSoviet foreign spy), called the US national securityadviser, Condoleezza Rice, and told her: ‘Ourreply will be very cynical. We will expel 50 of

your diplomats, but we will not do it immediately.We will spin it out over a period, and we will bevery careful to choose not only real spies but“clean” diplomats as well. We will cause chaos inyour embassy.’9

The tit-for-tat expulsions began. But the Bushteam was anxious to move on. This had not beentheir initiative. Powell called his counterpart,foreign minister Igor Ivanov, to suggest that it wastime to close the matter.

‘It’s not something we can just close,’ repliedIvanov. ‘We will expel 50. And if you expel more,so will we, soon we’ll have no diplomats left andit’ll just be you and me handling our bilateralrelations.’

They agreed to call a halt. Ivanov flew toWashington on 18 May bearing a letter from Putin.The Russian leader was looking beyond the currenttiff, stressing the same things he had spoken of withNATO’s Robertson: he wanted to restart therelationship, with a new type of partnership.Powell and Ivanov agreed that the two presidentshad to meet. They chose a neutral venue – Slovenia

– and a date – 16 June 2001.It was here, in the sixteenth-century Brdo Castle,

just north of the capital Ljubljana, that Bush andPutin had their blind date. Putin has a tremendousability to mimic his interlocutor and win theirconfidence – the facility that made him a goodKGB ‘mingler’. A well-connected Kremlinjournalist, Yelena Tregubova, for whom Putin hada soft spot, described being taken out to a sushirestaurant by him when he was director of theFSB: ‘He is a brilliant communicator ... a virtuoso... able to reflect like a mirror the person he iswith, to make them believe he is just like them. Hedoes this so cleverly that his counterpartapparently doesn’t notice it but just feels great.’10

In Brdo Castle Putin worked his magic on Bush.The American brought up an incident in Putin’s lifethat he had been briefed on, concerning a Christiancross which his mother had given him, and he hadhad blessed in Israel. Putin quickly understood thatthis resonated with Bush. ‘It’s true,’ he replied,according to Bush’s own account to the Americanjournalist Bob Woodward.11

Bush says he told Putin he was amazed that acommunist, a KGB operative, was willing to weara cross. (Putin was not wearing the cross at thismeeting, though he did bring it to show Bush atGenoa a month later.) ‘That speaks volumes to me,Mr President,’ Bush said. ‘May I call youVladimir?’

Putin then described how his family dacha hadburned down and the only thing he wanted torecover from the ashes was the cross. ‘I rememberthe workman’s hand opening, and there was thecross that my mother had given me, as if it wasmeant to be.’ He had Bush hooked.

The two presidents’ aides, waiting outside,were getting nervous as the private talks continued.Colin Powell, Bush’s secretary of state, chattedwith his opposite number Igor Ivanov. Powellrecalled later: ‘Igor and I and the rest of thedelegations were busy sitting round pretending tohave a conference and discussing vital issues, butwe were all just sitting there tapping our thumbsand our fingers on the table wondering what thesefellows were doing.’12

Eventually the presidents emerged to hold apress conference. One journalist asked Bush akiller question: ‘Is this a man that Americans cantrust?’ Still under the spell, Bush waxed lyrical: ‘Ilooked the man in the eye. I found him to be verystraightforward and trustworthy. We had a verygood dialogue. I was able to get a sense of hissoul.’

Putin could hardly believe it. He turned to Bushand said in a quiet, boyish voice in English, ‘Thankyou, mister ...’ Bush’s aides gasped. Condi Ricemurmured to a colleague, ‘Oh my goodness, we’regoing to have some explaining to do over that one.’

Colin Powell later took the president aside andsaid: ‘You know, you may have seen all that but Istill look in his eyes and I see K-G-B. Rememberthere’s a reason he’s fluent in German, he used tobe the rezident [agent] in Germany and he is achief KGB guy.’

Bush’s claim to have ‘seen into Putin’s soul’would haunt him for the rest of his presidency.

Fighting the Taliban togetherIn less than three months the friendship would beput to the test. When terrorists mounted the world’smost devastating attack on the United States on 11September 2001, Putin was the first world leaderto call Bush and offer condolences and help.

Watching the coverage of the planes smashinginto the World Trade Center and the Pentagon,Putin was shocked but not entirely surprised. Onlythe previous day he had called Bush and told himhe believed ‘something serious’ was in the making.This followed the murder of Ahmed ShahMassoud, the leader of the anti-Taliban NorthernAlliance in Afghanistan, on 9 September, whichRussian intelligence interpreted as a harbinger ofworse to come. Russia had supported the NorthernAlliance with arms and cash for several years inan effort to contain the spread of Islamicfundamentalism.

Putin at once called his security chiefs to theKremlin and asked them what they could do tohelp. The first thing that occurred to them was to

postpone a major naval exercise that was about toget under way in the Pacific, since this could be anunnecessary distraction for the US military. Putincalled the White House, but could not speak toPresident Bush who was still aboard Air ForceOne, moving to a secure location. CondoleezzaRice took the call. She was in the White Housebunker, where a decision had just been taken to putUS forces on the highest level of alert, DEFCON3.

Rice recalled later in an interview: ‘I toldPresident Putin our forces were going on highestalert, and I remember him saying, “I know,” and itoccurred to me, of course they know, they’rewatching our forces go on alert! He said, “We arebringing ours down, we’re cancelling allexercises.” And at that moment I thought to myself,you know, the Cold War’s really over.’13

The Americans soon decided on their responseto the attacks, which had been sponsored by Osamabin Laden’s al-Qaeda organisation operating out ofAfghanistan with the support of the fundamentalistTaliban government there. When Putin asked what

else he could do to help, the answer was clear: theonly suitable places to launch an assault onAfghanistan, apart from US aircraft carriers in theregion, were in former Soviet republics of CentralAsia. And those republics – Uzbekistan,Tajikistan, Kyrgyzstan – while nominallyindependent, were states where Moscow had greatinfluence.

Putin’s instinct was to ask the Central Asians tocooperate, and indicated this to the Americans. Butthen he ran up against unexpected oppositionwithin his own government. The hardline SergeiIvanov, now defence minister, was one of Putin’sclosest allies – like him, a former KGB spy, butmore urbane and better versed in Western ways.He was also Condoleezza Rice’s main channel ofcommunication in Moscow. When she came tooffice as Bush’s national security adviser, Ivanovwas her opposite number, and, even though he hadbecome defence minister in March 2001, Riceliked him and (despite diplomatic protocol, whichshould have linked her with the new Russiannational security adviser, Vladimir Rushailo) she

retained the link. At the Ljubljana summit,according to Rice, Bush asked Putin, ‘Who shouldwe call if we can’t get you and we need a trustedagent?’ Putin said, ‘That would be Sergei Ivanov.’And Bush said, ‘That would be Condi.’

Just three days after the terrorist attacks, Ivanov,the ‘trusted agent’, suddenly went way off messagewith regard to Russia’s willingness to help. ‘I seeabsolutely no basis,’ he said while on a visit toArmenia, ‘for even the hypothetical possibility ofNATO military operations on the territory of theCentral Asian states.’

The Americans were confused by the conflictingsignals. Suddenly the presidents of the CentralAsian states, not counted among the world’sgreatest democrats, became everybody’sfavourites. Putin sent his national security adviser,Vladimir Rushailo, to sound them out. Bush senthis under-secretary of state, John Bolton, to theUzbek capital Tashkent to win over PresidentIslam Karimov, a man accused of some of theworld’s most heinous human rights violations. TheAmericans were in no mood to quibble about such

things now. Rice recalled later: ‘With Uzbekistanit just became a problem of what would be theprice. Karimov needed money and he knew he hadus over a barrel.’ And indeed, Bolton apparentlyfound him bending over backwards to oblige: ‘I[was] all prepared for how hard it will be and hesaid, “Why aren’t you asking for a permanentbase?” ’14

That was precisely what the Russians, and notjust Sergei Ivanov, were worried about: theprospect of an American ‘presence’ – limitedaccess to Central Asian bases for the purposes oftheir campaign in Afghanistan – turning intosomething more permanent, something morepolitical.

Ivanov recalls: ‘We were concerned that oncethe Americans had a presence in the region, then“democracy promotion” would start. We knowthose countries very well – they were part of thesame country [the Soviet Union] – and as we say inRussia, “the orient is a very intricate place”. Wewere afraid that political processes that were notvery advantageous to us could start. And that

proved to be true later. The leaders of thosecountries – Kyrgyzstan, Uzbekistan, Tajikistan –started complaining to us, because they had giventhe Americans everything they needed, but thenthey started working with opposition groups,building democracy.’15

This was one of the earliest indications thatunder Putin Russia considered the prospect ofdemocracy on its borders threatening.

On Saturday 22 September Putin called hisdefence and security chiefs together for six hoursof crisis talks at his dacha, hidden in the woods ona cliff-top overlooking the Black Sea at Sochi.Putin argued that it was not only in Russia’sinterest to help America, but also in Russia’s self-interest. For one thing, Moscow had long beendisturbed by the rise of Islamic forces in theCentral Asian republics, fomented in part fromAfghanistan. Russia itself could never again putmilitary boots on the ground in Afghanistan after itscatastrophic war there in the 1980s, but if theAmericans were going to do it for them why shouldRussia oppose? Sergei Ivanov recalls: ‘We were

counting on getting help in return. We knew wherethe training camps were in Afghanistan. I mean, weknew the exact map coordinates. Those campstrained terrorists – including those from Chechnyaand Dagestan, as well as Tajikistan and Uzbekistan... We were counting on the Americans to liquidatethose camps. Or they would capture the terroristsand send them to us.’

Secondly, Putin linked the 9/11 attacks to thesame worldwide terrorist threat that he faced inChechnya. Supporting the Americans could onlyhelp garner support for (or at least mute criticismof) his own campaign against terrorism. TheRussian leader had already spoken to theAmericans about the links between al-Qaeda andthe Chechen Islamists – indeed he claimed thatOsama bin Laden himself had twice been toChechnya. Now the Russians had a chance to helpthe Americans wipe out some of the sources oftrouble within Russia itself. ‘We all have tounderstand,’ Putin told his team, ‘that the situationin the world has changed.’

The hardliners were won over. ‘Even the

doubters agreed,’ Putin said in an interview. ‘Newcircumstances meant we had to help theAmericans.’

After four hours, Putin left the meeting to call theAmerican president and inform him of theirdecision. ‘It was a substantive conversation,’ Putinrecalls. ‘We agreed on concrete steps to be takenstraight away, and in the long term.’ He offeredRussian logistical help, intelligence, search-and-rescue missions if American pilots were downedin northern Afghanistan, and even the right tomilitary flights over Russian territory forhumanitarian purposes. Most importantly, he toldBush: ‘I am prepared to tell the heads ofgovernment of the Central Asian states that wehave good relations with that we have noobjections to a US role in Central Asia as long asit has the object of fighting the war on terror and istemporary and is not permanent.’16 The lastwords were crucial. Ten years later (despite aRussian attempt to have them evicted in 2009),American forces still operate out of the Manas AirBase in Kyrgyzstan.17 They were asked to leave

their base in Uzbekistan in 2005.The American campaign was mainly going to

involve air strikes, while the Afghans themselves(the anti-Taliban Northern Alliance) would bedoing the fighting on the ground. Rice says that sheand Sergei Ivanov were given responsibility forgetting supplies to the Northern Alliance andpreparing them to fight. Even as Putin was callingBush from Sochi, Russia’s chief of staff, GeneralAnatoly Kvashnin, was holding talks with aNorthern Alliance leader in Tajikistan.

Russia, it seemed, was now totally aligned withthe US in the war on terror. Sergei Ivanov claimsthat some days after the war began, Russian borderguards on the Tajik frontier with Afghanistan wereapproached by representatives of the Taliban.‘They said they had authority from Mullah Omar topropose that Russia and the Taliban join forcesfighting the Americans.’ Putin referred to the sameincident when the US defence secretary, DonaldRumsfeld, visited Moscow. ‘We gave them onlyone answer,’ said Putin in English, showing acrude Russian hand-gesture, a fist with the thumb

pushed between the forefinger and middle finger.‘We do it a little differently, but I get the point,’laughed Rumsfeld.18

The American assault began on 7 October. Itwas Putin’s birthday. Together with the guests athis party, he watched the news of the first airstrikes on television. Defence minister SergeiIvanov turned to him and raised a glass of vodka:‘Vladimir Vladimirovich, it’s a birthday presentfor you.’

The George ’n’ Vladimir showIt seemed that Putin had now answered thatjournalist’s question in Ljubljana: was this a manAmericans could trust? Delighted to be seen to beacting in concert with the West rather than againstit, Putin now kept up the charm offensive,travelling first to Germany, where he impressedhis hosts by making a speech to the Bundestagentirely in German.

He emphasised his country’s cooperation in the

war on terror, and contrasted this with the slap inthe face Russia had felt over the bombing of Serbia– an event now more than two years old but stillrankling. ‘Decisions are often taken without ourparticipation, and we are only urged afterwards tosupport them. After that they talk again aboutloyalty to NATO. They even say that suchdecisions cannot be implemented without Russia.Let us ask ourselves: is this normal? Is this truepartnership?’

‘We cannot have a united Great Europe withoutan atmosphere of trust,’ he said, laying out a grandvision to put an end finally to the Cold War.‘Today we are obliged to say that we arerenouncing our stereotypes and ambitions and fromnow on will jointly ensure the security of thepopulation of Europe and the world as a whole.’

Chancellor Gerhard Schröder fully supportedPutin’s idea of involving Russia in ‘jointly’ensuring Europe’s security. Even before this visitthey had begun to think the unthinkable: that Russiamight even become a member of NATO. Schröderrecalled later in an interview that they had

discussed what he called a ‘fairly visionary’approach to foreign policy: ‘I had discussions withPutin about whether it would make sense forRussia to join NATO – and I thought that it madeperfect sense, a good prospect for Russia and alsofor NATO.’19

A week later Putin was in Brussels for ameeting with NATO secretary general GeorgeRobertson, ready to push his luck. Robertson wastaken aback when Putin opened the meeting byasking, ‘When are you going to invite Russia tojoin NATO?’20

Putin’s adviser Sergei Prikhodko insists it wasjust a ‘figure of speech’, but Robertson took itseriously.21 He patiently explained that this wasn’thow things were done. He recalled: ‘I said, “Well,Mr President, we don’t invite people to joinNATO. You apply for membership. You then haveto go through a process to show that you can beintegrated within NATO, and then an invitation tomembership is issued.” So he sort of shrugged andsaid something to the effect of “Russia is not going

to stand in a queue with a lot of countries that don’tmatter.” So I said, “Well in that case can we stopthis diplomatic sword dance about membershipand actually get down to building a practicalrelationship and let’s see where that takes us?” ’22

Undeterred, Putin continued to woo the Westwith conciliatory gestures. On his return fromBrussels to Moscow he approved the closure oftwo Soviet-era military facilities abroad – a navalbase at Cam Ranh Bay in Vietnam and a listeningpost at Lourdes in Cuba. In private, Russianofficials admit that these had become expensivewhite elephants that they were glad to get rid of.But still they hoped they would be seen asgoodwill signals that deserved to be reciprocated.Moscow was looking for accommodation on anumber of longstanding concerns. An AmericanSoviet-era law, known as the Jackson–Vanikamendment, was introduced in 1974 to restricttrade with the USSR until it lifted restrictions onJewish emigration. The problem had long sincevanished, but Jackson–Vanik was still on thestatute books, despite Russian pleading (and

American promises to repeal it). Russia alsowanted to join the World Trade Organisation tofacilitate the growth of its economy, but the USblocked its application and increased tariffs onRussian steel imports. Above all, Putin was stillhoping that his good behaviour might earn areprieve for the ABM treaty and even persuade theAmericans not to go ahead with a missile shield.

Such hopes were soon to be dashed. George W.Bush had campaigned for the presidency on apromise to build an American national missiledefence system, and the ABM treaty stood in hisway.

The issue was top of the agenda when Putinmade a state visit to the USA in November 2001.The Americans tried to convince the Russians thatthey had nothing to fear from a missile shield,since its aim was to protect the United States frommissiles that might be developed in the future by‘rogue states’ such as Iran, Iraq and North Korea(countries he would soon refer to as the ‘axis ofevil’). As such the defence system would notdestabilise the US–Russian strategic balance.

Colin Powell recalls: ‘The president wanted toconvey to President Putin that he, Bush, understoodthat the Cold War was over and that we had toavoid looking at the Russian Federation through thelens of the Cold War.’23

According to deputy national security adviserStephen Hadley, Bush said, ‘My preference wouldbe that we both agree to leave the ABM treaty andwe announce cooperation on ballistic missiledefence. If it’s better for you, Vladimir, for me justto go unilaterally, so that you’re not part of it – andmaybe even criticise it a bit – that’s okay.’24

It was the Americans’ turn now to try to seducePutin with some good mood music. He was invitedto the Bush family ranch at Crawford, Texas. Putinfelt rarely privileged. He explained that he hadnever been to the home of another world leader.The atmosphere was cosy. While a thunderstormraged outside, a log fire burned inside. VanCliburn – a hero in the Soviet Union, where hewon the Tchaikovsky Piano Competition back in1958 – played for the guests. Condoleezza Ricedanced and Putin’s foreign minister, Igor Ivanov,

chatted in Spanish with President Bush. He recalls:‘I speak Spanish because I used to work in Spain,and when Bush found this out he always used tochat to me in Spanish. He called me “Iggy”. “Hey,Iggy,” he would say, “Como estas?” ’25

But nothing could remove the log-jam over theABM treaty – and Putin certainly did not intend toprovide a fig-leaf by agreeing to abandon it jointlywith the Americans. The most that could be agreedwas that Bush would not embarrass Putin byannouncing the withdrawal while he was still inthe States.

In December Secretary of State Powell flew toMoscow to bury the treaty. In three days’ time, hetold Putin, President Bush would publiclyannounce America’s unilateral withdrawal fromthe ABM. He described the curious reaction he gotfrom Putin. ‘Putin looked at me with those steelyeyes of his and started to complain: “This isterrible, you are kicking out the legs from under thestrategic stability, and we will criticise you forthis.” I said, “I fully understand that, MrPresident.” And then he broke into a smile, and he

leaned forward to me and he said: “Good! Nowwe won’t have to talk about this any more. Nowyou and Igor [Ivanov] get busy on a new strategicframework.” And I said. “Yes, sir.” ’26

Within five months a new strategic armslimitation treaty had been cobbled together. It wasrather less imposing than its predecessors, theSALT treaties of the Cold War era and the STARTtreaties signed by Gorbachev and Yeltsin withGeorge Bush Senior. Covering just a couple ofsides of A4, it was pretty thin, and though itreduced each side’s nuclear arsenals, it lacked anyverification provisions or even any obligation todestroy arsenals permanently. But both Bush andPutin needed it for its symbolism. These twoleaders were getting on like a house on fire, andthey needed a treaty to prove it.

After the signing, Putin and his wife showedGeorge and Laura Bush around the Kremlin, andthen took them home to their dacha, where they didsome fishing in a pond. Putin was repaying theCrawford experience. The next day they flew toPutin’s home town, St Petersburg, where they

visited the city’s massive war memorial, theHermitage gallery and the university. Putin thensnuck off to attend a judo competition. And in theevening the presidential couples, with ministersand advisers in tow, went to a performance of theNutcracker ballet at the celebrated MariinskyTheatre.

Here something curious happened. CondoleezzaRice and Sergei Ivanov had struck up a greatfriendship. And while both were lovers of ballet,neither of them wanted to sit through three hours ofthe Nutcracker. When the lights went down,Ivanov leaned over to Rice and said: ‘Condi, doyou really want to watch the Nutcracker?’

‘What do you have in mind?’‘I have an alternative. Have you heard of the

Eifman ballet?’Rice had heard of it. Boris Eifman was an

avant-garde choreographer, much more to her taste.‘Let’s go,’ she said.

Ivanov and Rice slipped out of the Mariinskyand headed for Eifman’s studio. They sat side byside in the rehearsal studio, transfixed, sole

viewers of a thrilling performance (apart from asomewhat disgruntled looking Vladimir Rushailo,the national security adviser, who had been sent asa chaperone).

‘I could see she loved it,’ Ivanov recalled later.‘You can’t fake that sort of thing.’27

They got back to the Mariinsky just before thelights went up, just in time to join the officialdelegations for a midnight canal trip around StPetersburg.

‘Personal relationships do matter,’ Riceconfided in an interview. ‘I came to trust thatSergei Ivanov was someone who was going todeliver on what he said he would do, and I think hebelieved the same about me.’28

It truly seemed like the dawn of a new era. Whocould have imagined that it would all soon begin todisintegrate?

3

THE BATTLE FORECONOMIC REFORM

Putting a new team togetherIt wasn’t just Putin’s foreign policies thatimpressed the West. At home, he launched a raft ofeconomic reforms that won plaudits abroad, asthey appeared to be aimed at stimulating theeconomy, entrenching the free market andconsigning the last vestiges of communism to thedustbin.

While still prime minister – before he was even

acting president – Putin recruited a new team ofWestern-oriented reformers to draw up aprogramme. Some, like German Gref and AlexeiKudrin, he knew from his St Petersburg days.Andrei Illarionov was an outspoken liberaleconomist and Arkady Dvorkovich, a young whizz-kid, was just back from studies at Duke University.Putin himself was still an economic novice,willing to listen and learn, and convinced thatthings had to change. Kudrin described him in aninterview as ‘a man of the next generation, whounderstood modern demands’.1

Under Yeltsin major projects had been carriedout that had already transformed the economy,particularly mass privatisation and theliberalisation of prices. But the country did notenjoy sustainable economic growth, inflation washigh and the new private sector workedinefficiently. Above all, the country’s industrialbase remained almost entirely focused on theextraction and sale of raw materials – oil, gas,aluminium, timber – while there was scarcely anymodern manufacturing.

At the end of 1999 Putin put Gref, a 35-year-oldlawyer-turned-businessman, in charge of a newCentre for Strategic Research, which became theengine room of the reforms. Gref, a bustling manwith a pointed beard like Trotsky’s, was noeconomist, but few doubted he was the right manfor the task. Deputy finance minister Kudrindescribed him as ‘bright and brave ... he was atank, an engine, and totally committed to thereforms’.

Gref’s Centre was a kind of brains trust. Herecalled in an interview later: ‘You know, whatwe were trying to do was to have consensus insociety. We wanted to shape the programme withmaximum input from intellectuals, academics,researchers, managers, economists. Part of thereason why we wanted public consultation was sonobody would think that it came from nowhere, soeverybody would help to implement it. So the firsttask was to involve as many people as possible.’2

Not all the ideas that came flooding in wereexactly what he had in mind. Gref smiled wryly ashe recalled one contribution. ‘We received all

sorts of ideas, and some of them were prettyexotic, to be honest. One of the institutes of theAcademy of Sciences offered us a set of measureswhich in effect would have brought backsocialism. I remember their idea was to create anational fund for the payment of all salaries andthen to standardise them all.’

Over the next six months the team held scores ofbriefings and brainstorming sessions, graduallysifting through all the proposals and pullingtogether a plan. Putin would occasionally attend,mainly listening and asking questions, often raisingthe question of how the reforms would impact uponsocial welfare. He also had his own economicsguru, Andrei Illarionov, whom he used as asounding board, and in some regards as acounterbalance to the Gref team.

Gref had invited Illarionov, the director of theInstitute of Economic Analysis, to join the Centre,but according to Illarionov it was ‘too Keynesian’for his liking, so he declined. Illarionov was, andremains, something of an oddball, a maverick wholikes to challenge conventional wisdoms. Today he

is a leading climate-change sceptic. In the late1990s he had been fiercely critical of the policiesthat led to the country’s financial crisis and defaultin August 1998. Perhaps it was his willingness tospeak out that attracted Putin’s attention (thoughsome years later it would cost him his job). On 28February 2000 the acting president called him andasked him to come out to his dacha at Novo-Ogaryovo, just outside Moscow, to ‘chat’.

The two men spent all evening discussing theeconomy – or rather, economics. ‘He didn’t justwant to know about interest rates and so on,’Illarionov said in an interview. ‘He wanted to geta general understanding of economic reforms, whatkind of economy we needed, what should be done,and how it should be put together. He was clearlylearning a lot in a very narrow area that was nothis speciality.’3

At one point they were interrupted by an officerwho handed Putin a piece of paper. The actingpresident was delighted: it was news that therebel-held town of Shatoy in Chechnya had justbeen retaken by Russian forces. Illarionov was

quick to pour cold water on Putin’s celebration. Alongstanding opponent of Russia’s intervention inChechnya, he told him bluntly that what was goingon there was ‘a crime’. Illarionov says he arguedthat Chechnya should be allowed to becomeindependent, that it could never be crushedmilitarily and that the response would be anupsurge in terrorism which would backfire on theRussian people.

They had a furious argument. Putin insisted therebels had to be annihilated. ‘His voice evenchanged,’ said Illarionov, ‘from the normal onehe’d used when discussing economics. Suddenlysome sort of iron, or ice, came across. It was akind of transformation of the personality in front ofyour eyes – like seeing a completely differentperson. It seemed we could fall apart at anymoment, without any possibility of reconciliation.’

After about half an hour, when it was clear therecould be no meeting of minds, Putin suddenlyannounced: ‘OK, that’s enough. We will not talkany more about Chechnya.’ Illarionov recalled:‘He just stopped this conversation, and for the rest

of our meetings and relations over the next sixyears, he never mentioned Chechnya in mypresence or discussed it with me. And after this,we resumed talking about economic reforms.’

By 10.30 it was time for Illarionov to leave, andafter their spat over Chechnya he assumed it wouldbe their last meeting. But Putin asked him to comeback again the following day. Their economicstutorials became a regular occurrence, and on 12April Putin officially appointed Illarionov as hischief economics adviser and later as his ‘sherpa’,or representative, to the G8 group of leadingindustrial nations.

By May the Centre’s reform plan was almostready, and it turned out to be, in Gref’s words,‘ultra-liberal’. ‘If we set the private sector free,we could see good growth,’ said Kudrin. As thework neared fruition they produced a thick volume– far too dense to be presented to the actingpresident. As they had no experience in producingslide presentations they brought in a topconsultancy, McKinsey, to help them. ‘We spent aweek at their Moscow office,’ says Gref, ‘putting

together a short version for public presentation anda more professional version to show to ministriesand departments explaining what they would haveto do.’

On 5 May, two days before Putin’s inauguration,the team went to his Sochi residence to give him a‘full immersion’ in the project. The youngreformers were buzzing with excitement. ‘I waseuphoric then,’ said Kudrin, ‘because it was allgoing according to plan.’ From morning till nightthey held sessions, interspersed with meals andwalks in the warm sunshine. The economists talkedthrough every point with Putin, who requestedmore work to be done here and there but approvedthe general thrust. It became known as the ‘GrefPlan’. Implementing it was to prove even harderthan writing it.

Privatising the people’s landOver the coming years the Gref Plan transformedmany aspects of economic life. Personal incometax was reduced from as much as 30 per cent to a

flat rate of just 13 per cent. Corporate tax wentdown from 35 to 24 per cent. A new land codemade it possible to buy and sell commercial andresidential land – for the first time since thecommunist revolution of 1917. There was a newlegal code, measures to curb money laundering,and an attempt to break up some of the great statemonopolies: electricity production was split offfrom the supply network, for example.

The income tax reform was needed becausemillions of Russians, whose wages were alreadymiserly, simply avoided paying, as the rates werecrippling. The same was true of company taxation:some 80 per cent of businesses were avoidingpaying taxes. Gref’s proposal of a single, lowincome tax rate for everyone, and a much-reducedcompany tax, was audacious. The idea was tolower the rates but increase collection. But ifpeople continued not to pay, the state could finditself with an even bigger hole in its budget. Thepoint was not lost on Putin. Gref recalls aparticular meeting that he and Kudrin had with him.

‘The president asked us: “Are you sure that our

total tax revenue isn’t going to decrease if welower taxes?”

‘We said: “Yes.”‘He asked: “What if you are wrong?”‘I said: “Then I will resign.”‘“I’m sorry,” said Putin, “but I am not going to

approve your plan on that basis! You haven’tthought this through. What makes you think yourresignation is somehow going to make up for allthe money we are going to lose from the budget?Politically, the one doesn’t compensate for theother.” ’4

Gref and Kudrin went away, did their sums oncemore and re-presented their plan to Putin. Thistime he agreed.

The International Monetary Fund was lesshappy. ‘At that time we were still working closelywith the IMF mission here, and they refused toapprove our plans,’ says Gref. ‘We had difficultmeetings in the residency outside Moscow. Thenwe said to the IMF, “Thank you very much for youradvice, but we are still going to lower taxes.” ’The IMF subsequently left the country. But Gref

describes the reform as ‘the key, correct decision,which allowed our economic growth to take off’.

The proposed land reform was even morecontentious – this time because it affrontedmillions of communists and others who believedthat land ought to belong to ‘the people’. Yeltsinhad never dared to oppose them. As Gref preparedto present his Land Bill to the State Dumathousands took to the streets with red banners andanti-capitalist slogans.

At the last minute the government made a fewconcessions, tightening the regulations regardingthe sale of agricultural land, but it made nodifference. There was an uproar in the Duma asGref was asked by the Speaker to take the floor, topresent his bill. Deputies from the CommunistParty (who had a quarter of the seats) swarmedaround him to prevent him from leaving thegovernment benches and reaching the podium.Some of them tried to grab him physically. The dinwas so loud that the Speaker could not makehimself heard, so he called Gref on his phone andtold him just to present his bill from where he was.

‘No one can hear you anyway,’ he said, ‘butyou’ve got to do it, otherwise we can’t hold thevote.’

So Gref made his speech, as quickly as hecould, while communist deputies hammered theirfists on their desks and drowned him out with theirchants. The vote was held, the law was passed ...and the chamber instantly turned into a battlefield.Opposing deputies punched, kicked and head-butted each other.

‘It was a historic moment,’ Gref reminiscedlater with a smile. ‘That’s how we won the right toown land in Russia.’

Hands off GazpromThe initial effect of the package of reforms wasimpressive. Russians did start to pay their taxes.Inflation fell from 20 per cent in 2000 to 9 per centin 2006. The economy grew steadily at around 6–7per cent a year. With the help of rising worldprices for oil and gas (Russia’s principal exports)the government did not just balance its books but

went into surplus. It began paying off its hugeforeign debt, which amounted to 130 per cent ofGDP in 1998, reducing it by 2006 to just 18 percent.

As petrodollars poured into the exchequer, thegovernment faced a dilemma. There was those,including Gref, the economy minister, who wantedto spend the windfall on infrastructure: roads,railways, education and the healthcare system.Kudrin, the finance minister, on the other hand,feared that this could fuel inflation. He proposedinstead the creation of a Stabilisation Fund, whichwould soak up surplus liquidity and build up asubstantial cushion to protect the country if theprice of oil should slump in the future. Mostministers wanted money straightaway for theirindustries. Regional governors complained to Putinthat Kudrin was depriving the economy of cash.‘We had hot discussions about this,’ said Gref. Inthe end both were satisfied. An Investment Fundwas set up, which would plough up to $3 billioninto infrastructure each year. ‘It was a public–private partnership,’ said Gref. ‘If there was

private money, the state financed it. It allowed bigfactories, power stations and so on to be built withprivate money.’

But the big winner was Kudrin with hisStabilisation Fund, which reached 522 billionroubles ($18.5 billion) by the beginning of 2005,allowing Russia’s debts to the IMF ($3.3 billion)to be paid back in full. Oil revenues continued topour in. By August 2006 Russia had also paid backits entire Soviet-era debt of almost $40 billion tothe Paris Club of foreign government creditors –saving $7.7 billion in servicing costs. Even withthese massive outlays, the Stabilisation Fundcontinued to accumulate as oil prices soared,giving Russia a healthy cushion to fall back onwhen prices slumped during the world economiccrisis of 2008.

Putin’s prime minister for most of his firstpresidential term was Mikhail Kasyanov, acharming, English-speaking free-marketeer with abooming voice, who oversaw the implementationof the Gref Plan. He has since become one ofPutin’s fiercest critics and a leader of the

opposition. In 2008 he tried to run for president,but the Kremlin machine put paid to his plans bydiscovering alleged falsifications in the twomillion signatures collected to back hiscandidature. Back in the days of the ‘Putin spring’,however, he and the president saw eye to eye onalmost everything. Even today he admits that Putinwas at that time fully signed up to liberal reforms:‘It seemed to me that Vladimir Putin and I wereallies, building – maybe not without mistakes – ademocratic state with a market economy.’5

Only in one major endeavour did the reformersfail – and it proved to be highly significant. Askedwhether Putin interfered much in the day-to-daywork of the government, Kasyanov replied: ‘In 90per cent of cases he didn’t interfere. The other 10per cent concerned Gazprom and almost everythingconnected with it.’6

Gazprom was the country’s largest company,and the biggest natural gas producer in the world.Created from the former Soviet Ministry of Gas, itwas privatised under Yeltsin, but the state retained40 per cent of the shares. It was in a parlous state,

a hotbed of corruption, asset-stripping and tax-evasion.7 Putin came to power vowing to sortthings out, and appointed two St Petersburg cronies– Dmitry Medvedev and Alexei Miller – as newchairman of the board and CEO respectively.Miller knew next to nothing about the gas industry:according to Kasyanov, he spent his entire firstyear in the job learning. But that was only half thetrouble. For the Gref team, the main problem wasthat Gazprom was a Soviet-era behemoth whosegrip on the entire process of exploration,extraction, distribution and sales stifledcompetition. The oil industry, by contrast, had beenbroken up into a large number of competingcompanies in the 1990s.

Vladimir Milov was the young deputy energyminister who was tasked with reforming the gassector. The idea, Milov said in an interview, wasto ‘break up the monopoly, separating distributioncompanies from production companies, turningthem into smaller businesses, which weresupposed to be privatised and compete with eachother.’8 Putin supported similar plans for the de-

monopolisation of the electricity industry, despiteprotests from his own adviser, Illarionov. ButGazprom was different.

In the autumn of 2002 Milov drafted a plan forthe reform of Gazprom. It won Gref’s approval,and Kasyanov’s. ‘It used to seem to a lot ofpeople,’ says Kasyanov, ‘that splitting up theproduction and transport of gas could lead to thedisintegration of the whole sector, which was suchan important part of the country’s life-supportsystem. They still try to frighten people, saying thatwithout Gazprom in its existing form, the whole ofRussia would collapse. That was just scare-mongering. In fact, all competent economists andindustrialists knew that you could carry out a gasreform safely and painlessly. Everything was readyfor that.’

According to Milov, the plan was sent toGazprom’s CEO, Alexei Miller, who at onceraised it directly with Putin: ‘He wrote Putin afurious memo, saying it would be disastrous andwe were threatening national security. Putin thenwrote on the letter, “I basically agree with Mr

Miller. Mr Kasyanov please take that intoaccount.” ’

Milov says he expected nothing else. ‘Putin hadshown a very specific interest in Gazprom sincehis early days. It was quite clear that he thinks ofthis company as one of the ultimate attributes andsources of power.’

Kasyanov tried to present the plan three times tohis cabinet, but Putin insisted that it needed morework and the prime minister should discuss itfurther with Miller. ‘Listen to Miller, listen to himpersonally,’ he told Kasyanov. ‘Don’t listen tothese people who’re egging you on.’

Finally, in 2003, Putin simply ordered Kasyanovto drop the subject. ‘Literally five minutes beforethe start of the cabinet meeting he called me andtold me to remove the item from the agenda.’Gazprom, as we will see in later chapters, wouldbecome one of Putin’s most effective levers ofpower – in the media, economy and foreign policy.

The good life

Putin’s first term as president, largely thanks to theeconomic reform package, saw the first signs ofgrowing foreign investor confidence. On theconsumer side, giant multinationals, such as theFrench supermarket chain Auchan and the Swedishfurniture outlet IKEA, pioneered huge retail parksin the Moscow suburbs. Each new IKEA store cost$50 million to open – but they hoped to recoup theinvestment quickly because, astonishingly,Muscovites seemed to have the cash to spend inthem. The only thing that held back even greaterinvestment was the vast amount of red tape andcorruption that all entrepreneurs still faced inRussia – and few foreigners had the stamina orknowhow to overcome. (Chapter 12 will look atthe crushing effect of corruption in Russia.) Still,IKEA’s huge blue and yellow furniture stores werelike flags of modern life, fluttering all around theMoscow suburbs – and soon in other cities too.

In terms of Russian psychology – to the extentthat this can be gauged – the shock of the 1990sseemed to be wearing off. I had the feeling (totallysubjective, I admit) that people felt less patronised

by the West than they had in the Yeltsin era. Theforeign advisers were gone, and much of the newgrowth had a home-grown feel to it. Supermarketsfilled up with Russian produce – but not thesubstandard Russian produce that used to be sold,packaged in identical brown bags; now it came inshiny packaging to match Western products.Russians went back to their old preferences –Vologda butter instead of Lurpak; molochnayakolbasa (‘dairy sausage’) instead of importedGerman wurst. Wages were being paid again. Thetens of thousands who lined the streets in the early1990s selling their possessions had vanished.Moscow was brash and vulgar, but it had avibrancy too, with new buildings going upeverywhere and businesses opening up every day.

There were causes for optimism. The reasonpeople were shopping at IKEA, after all, wasbecause they were refurbishing their apartments,finally throwing out those ancient cracked tiles andSoviet-era fittings. Only now were many people(at least in the big cities) seeing the real break withcommunism, after a decade of uncertainty and

poverty.By the summer of 2002 things were looking

relatively good. Vladimir Putin and George W.Bush were best friends, and Putin’s team wasturning Russia into a booming market economy.

But there were darker forces at work too. Theythreatened both Russia and its relations with theWest.

4

THE DARKER SIDE

Muzzling the mediaBoris Yeltsin is rocking a baby Vladimir Putin in acradle. The baby is wailing. Yeltsin tries to singhim to sleep.

‘Oh, oh,’ sighs Yeltsin. ‘You’re so ugly. And –God forgive me – your origins are so dark ... andyour looks so ... murky ... Oh, Lord, why did I – ademocrat to the marrow – give birth to this?’

A fairy appears above him. It is BorisBerezovsky, the oligarch who helped bring Putin topower at the end of the 1990s. ‘Yes,’ he says,

‘your first-born were prettier.’Yeltsin yawns and puts his head down, saying,

‘Oh, I am so exhausted. I am going to take a well-earned rest.’ He falls asleep.

‘Poor man,’ says Berezovsky. ‘He’s wornhimself out.’

Suddenly the baby starts crying out loud: ‘Wipe’em out in the outhouse,’ he shouts. ‘All of ’em ...wipe ’em out in the toilet!’

‘Sssh,’ says Berezovsky. ‘Not all of them ...Calm down, lad. We’ll make a human out of you.’

The scene is based on a fairy tale, Little Zaches,by the German writer E.T.A. Hoffmann, the storyof an ugly dwarf who has a spell cast on him by afairy so that others find him beautiful. It was justone episode in the brilliant satirical puppet showKukly (Puppets) which used to be shown on theindependent television channel NTV.

Putin had to endure such mockery week in weekout at the start of his presidency. He hated it. The‘wipe ’em out in the toilet’ line was, of course, areference to his notorious threat to annihilateChechen terrorists. Berezovsky was the oligarch

who used his television channel to ‘beautify’ Putinand paper over his KGB past to make himelectable. And the dwarf? Well, every Russianviewer understood the reference to Putin’s lack ofinches.

The scriptwriter of Kukly was ViktorShenderovich, an impish, bearded writer with anirrepressible sense of humour and disdain forauthority. He is sure Putin never forgave them forLittle Zaches. ‘Several people told meindependently that Putin went mad after thisprogramme.’1

But Kukly was not the only thing on NTV thatoffended Putin. When the channel started up underYeltsin it quickly gained a reputation as a free-thinking outlet, which broadcast unvarnishedreports about the war in Chechnya (including theshocking truth about Russian atrocities and thedemoralised state of Russian conscripts). Sundayevening’s Itogi, a political chat-show hosted bythe channel’s leading journalist, YevgenyKiselyov, was unmissable viewing for everythinking Russian.

Russian broadcasting was still in its infancy.Western traditions of balance and independencehad not taken root. NTV was used quite openly byits owner Vladimir Gusinsky to further his owninterests, as was the main channel, ORT, by itsprime shareholder Boris Berezovsky. They hadboth helped to get Yeltsin elected in 1996, whentheir business interests could have been threatenedby a communist comeback. But in the December1999 Duma elections, while Berezovsky’s ORThad thrown its weight behind Putin’s Unity Party,NTV had campaigned for his rivals.

Now, two days before the presidential electionin March 2000, NTV broadcast a programme thatcaused apoplexy in the Kremlin: an investigationinto the murky circumstances surrounding theapparent failed apartment bombing in Ryazan theprevious summer and a discussion of the possibleinvolvement of the FSB (see Chapter 1).Gusinsky’s deputy, Igor Malashenko, was told bythe information minister, Mikhail Lesin, that NTVhad now ‘crossed the line and were outlaws intheir eyes’.

From this moment, it seems, NTV was doomed.Gusinsky’s business empire, Media-Most, whichowned NTV, was in deep financial trouble. In the1990s it had borrowed hundreds of millions ofdollars to implement extravagant plans to extendits reach. It had even launched its own satellite, athuge expense, hoping that the emerging middleclasses would soon buy NTV receivers andprogramming. Gusinsky was preparing to float thecompany on the New York stock market, to raisecapital to repay the debts. But after the August1998 crisis, those plans evaporated, as did the TVadvertising market in Russia, and Media-Mostfound itself saddled with loans it could not repay.Its main creditor was the state-owned gasmonopoly, Gazprom – and this gave the Kremlingreat leverage when it decided to throttleGusinsky. According to Kiselyov, Gusinsky hadbeen in talks with Gazprom about restructuring thedebt, but when Putin became president he orderedthe gas company to demand immediate repaymentof the entire debt – and, if Media-Most refused, toseize NTV’s assets. On 11 May, four days after

Putin’s inauguration, dozens of armed and maskedtax police and FSB troops stormed Media-Most’sheadquarters. By the end of the day they had cartedout hundreds of boxes of documents, cassettes andequipment. Malashenko described the raid as‘purely political in character, an act of revenge andintimidation’.

There was, perhaps, still a slim chance tosurvive. At around the same time, Malashenkoreceived an offer directly from the Kremlin: fulfilcertain conditions and the reprisals would stop.The conditions, according to Shenderovich, were:to stop investigating corruption in the Kremlin, tochange their coverage of Chechnya and, above all,to ‘remove the “First Person” from Kukly’ – inother words, Putin’s latex physiognomy had todisappear from the show.

To Shenderovich, this was a red rag to a bull.He responded by writing a hilarious episode ofKukly that lampooned the edict itself. Since theycould not show Putin, they showed a burning bushinstead. Moses – in the form of Putin’s chief ofstaff, Alexander Voloshin – receives tablets from

his invisible leader with the Kremlin’s ‘tencommandments’. At the end the leader is referredto as ‘Gospod Bog (The Lord God), GB for short’(which for every Russian means KGB). In Englishit sounds convoluted. In Russian, it could not havebeen more direct, or more provocative.

Two weeks later, on 13 June, Gusinsky wasarrested. Putin feigned complete innocence whenasked about it by a television reporter. ‘It wasunexpected for me,’ he said, barely able to stop alittle smile playing on his lips. ‘I hope theauthorities who made this decision – I suppose itwas the prosecutor’s office, yes? – have goodreasons to justify their action.’

Gusinsky was given a choice: sell his mediaempire to Gazprom or face prosecution for large-scale fraud. It was blackmail. He agreed and fledthe country. Russia’s freest media group was nowunder Kremlin control.

The other big media tycoon, Boris Berezovsky,fared no better. He had been accused of fraudunder the premiership of Primakov, but the chargeswere dropped when Putin became prime minister,

and he was seen as by far the most powerfuloligarch – with a media empire as well as massiveindustrial and commercial assets, including the oilcompany Sibneft and the airline Aeroflot. As hewas gradually squeezed out of Putin’s inner circle,so his media became ever more critical. In June hecriticised plans announced by Putin for arecentralisation of power, and the day afterGusinsky’s arrest the public prosecutor announcedhe was extending an investigation into Aeroflot’sfinances. Berezovsky was suspected of fraud andmoney-laundering on a massive scale.

Just before his election in March, Putin hadpledged to outlaw the oligarchs: ‘Those peoplewho fuse power and capital – there will be nooligarchs of this kind as a class.’ The phrase sent achill down many spines, as it recalled Stalin’spolicy of liquidating the kulaks, or rich peasants,‘as a class’. What he objected to was the idea thatwealth (especially fabulous, ill-gotten wealth)should render political influence. Even thoughBerezovsky had helped him come to power, Putinresented the influence he wielded through his

media empire (which included not just ORT butanother channel, TV-6, and several newspapers).

As in Gusinsky’s case, Berezovsky’s downfallmay have been triggered, or hastened, by atelevision programme. When the Kursk nuclearsubmarine sank in the Barents Sea on 12 August2000, leading to the deaths of 188 crew members,ORT excoriated Putin for his tardy response. Thestation’s top presenter, Sergei Dorenko – theattack-dog taken on to help Putin’s party win theelection at the end of 1999 – now poured his bileon the president. Putin had remained on holiday inSochi for a full five days following the accident,and it was another four before he visited thenorthern garrison town and met the deadservicemen’s families. He had also turned downoffers of help from Britain and Norway. Dorenkodissected an interview given by Putin to justify hisresponse, and sneered at every phrase, as thoughhe had nothing but contempt for the country’spresident. For example, Putin was shown sayingthat foreign help was offered only on the 16th.Dorenko heaved a big sigh and retorted: ‘I’m

sorry, but in fact they offered to help on the 15th,and they would have offered earlier if we hadn’tbeen lying to the world that everything was OKand we didn’t need help.’ Dorenko also broadcasta secret recording of a meeting Putin held behindclosed doors with relatives of the dead, in whichhe was heard blaming the media for the disaster:‘They’re liars. They’re liars,’ he said. ‘For the lastten years television has been destroying our armyand navy, that people are dying in today ...’

Dorenko’s show was axed. And soon it wasBerezovsky’s turn to follow Gusinsky into exile.At the end of August Berezovsky went to theKremlin to see Putin’s chief of staff, AlexanderVoloshin, who gave him an ultimatum: to transferhis ORT shares to the state or ‘follow Gusinsky’ –that is, face prosecution. The next day Berezovskywas received by Putin himself, who accused thebusinessman of deliberately trying to destroy him.They had a furious row. According to Berezovsky,Putin said to him: ‘You should return your sharesunder my personal control ... I will manage ORTon my own.’ Berezovsky vowed never to do that,

and stormed out.In fact Berezovsky did surrender his control of

the station, selling his stake to fellow oligarchRoman Abramovich, who meekly transferred hisvoting rights to the state, thus completing thegovernment’s takeover of the channel. But this didnot stop the attacks against Berezovsky. On 1November the state prosecutor accused him ofdefrauding Aeroflot of hundreds of millions ofdollars. Berezovsky was abroad at the time anddecided to stay there. From the safety of exile heclaimed that the money he was alleged to haveembezzled was partly used to finance Putin’selection campaigns.

Berezovsky has lived in London ever since,despite repeated Russian attempts to have himextradited, and was granted political asylum inSeptember 2003. Putin personally intervened to tryto persuade Britain to send him back, and in sodoing betrayed his lack of understanding ofWestern systems. He asked Prime Minister TonyBlair to put pressure on the courts to extraditeBerezovsky. According to a well-informed source,

Blair explained that this was impossible in the UK:it was a magistrate’s decision, not thegovernment’s. Putin, unable to fathom theindependence of the courts, took offence.1 Thiswas the KGB man speaking, the product of aSoviet upbringing unwittingly applying his ownundemocratic standards to a Western country.

There is no reason to think that Putin wasdissembling; rather, it seems clear that he actuallybelieves that it is normal for Western politicians toinfluence the courts in the same way as Russianleaders can. His belief that governments controlthe media is similar: in 2005 he accused PresidentBush to his face of personally ordering the sackingof the veteran CBS news anchor Dan Rather. Andon another occasion he told a journalist whoquestioned why Russian police routinely beat uppeaceful protestors that in the West it was ‘normal’for demonstrators who found themselves in thewrong place to be ‘beaten around the head with abaton’.

The vertical of powerThe crackdown on the free media was not the onlyreason why the West’s admiration for PresidentPutin’s first steps in foreign policy and economicreform, described in the first two chapters of thisbook, was tempered from the start by warinessabout his understanding of democracy.

One of Putin’s earliest decisions as presidentwas to start creating what he called the ‘vertical ofpower’ – the gathering-in of all political power tothe centre, and effectively into his own hands. Hebelieved that lack of central control lay at the heartof Russia’s woes, that Yeltsin’s weak leadershiphad allowed crime and corruption to flourish,oligarchs to amass power and the country’s regionsto spin off into separate orbits. Yeltsin hadencouraged the regions to ‘take as muchsovereignty as you can swallow’, which had hadthe unwanted effect of allowing governors quietlyto ignore or even sabotage edicts from the centre,threatening the disintegration of the federation.Many regions passed laws that contradicted the

Russian constitution, withheld taxes from thecentre and struck bilateral agreements with foreigncountries. Some of them could have survived wellas independent countries: the republic of Yakutia,for example, produces one-quarter of the world’sdiamonds (and has a population of less than half amillion); Khanty-Mansiisk (population 1.5 million)is the world’s second largest oil producer.

On 13 May – just six days after his inauguration– Putin announced that the country’s 89 regionswould be placed under the control of seven ‘super-governors’ personally appointed by the president.Five of Putin’s seven enforcers turned out to besiloviki2 – men with careers in the securityservices and armed forces. They included ViktorCherkesov, first deputy director of the FSB, whosework in the past had included the persecution ofSoviet dissidents.

Six days later Putin initiated a reform of theupper chamber of parliament (the FederationCouncil or ‘senate’). Previously, elected regionalgovernors and heads of regional legislativecouncils were ex officio senators; now the regional

bosses were replaced by nominatedrepresentatives, allowing the Kremlin to fill theFederation Council with ‘friendly’ senators.

Putin then moved to centralise the collection anddistribution of taxes, which had been about 50–50between the centre and the regions, to 70–30 infavour of the central government.

The apex of the new vertical of power was notthe federal government, however, but rather Putinhimself – something he achieved by appointingtrusted colleagues from the security services orfrom his home town, St Petersburg, to keypositions. Many of them, moreover, were alsogiven directorships in state companies, therebyenmeshing the country’s political and businessstructures in a vast spider web, at the centre ofwhich sat Putin.

Igor Sechin had the perfect pedigree: he hadworked with Putin in St Petersburg, and by someaccounts may also earlier have been a spy,working undercover as a translator in Portuguese-speaking African countries. He became Putin’smost trusted adviser, and followed his master from

St Petersburg to Moscow in 1996. When Putinbecame acting president he retained Yeltsin’s chiefof staff, Alexander Voloshin, but immediatelyappointed Sechin as deputy chief of staff,controlling the flow of papers that crossed hisdesk, and in effect running the energy industry. In2004 he also became chairman of the board ofRosneft, the state oil company.

Viktor Ivanov, from the Leningrad KGB, becamePutin’s deputy chief of staff in charge of personnelmatters – and also chairman of both the Almaz airdefence corporation and Aeroflot. Sechin andIvanov were considered the most powerful silovikiin Putin’s circle.

Dmitry Medvedev, another former colleague ofPutin’s from St Petersburg, came to Moscow in1999 to become a third deputy chief of staff, andalso chairman of the state gas monopoly, Gazprom.

Putin brought his St Petersburg colleague AlexeiMiller to Moscow to become deputy minister ofenergy and then CEO of Gazprom.

The two chief economic reformers, GermanGref and Alexei Kudrin, also came from St

Petersburg. Gref served on the board of Gazprom,and Kudrin became chairman of both VTB bankand the diamond producer Alrosa.

Sergei Naryshkin, another Leningrader andformer colleague at KGB school, was promoted inPutin’s second term to government chief of staff, aswell as chairman of the board of Channel Onetelevision and deputy chairman of Rosneft.

Another old Leningrad KGB colleague, NikolaiPatrushev, became chairman of the FSB, followingPutin himself.

Rashid Nurgaliyev worked under Putin in theFSB and then became interior minister. Cherkesov,mentioned above, was another subordinate ofPutin’s in the FSB.

Sergei Chemezov, a fellow spy with Putin inDresden, was brought in to run Rosoboronexport,the country’s chief arms exporter. And another‘Chekist’, Vladimir Yakunin, was brought in to thetransport ministry and eventually became head ofRussian Railways.

Yakunin has another link to Putin: they are bothfounding members of a so-called ‘dacha

cooperative’ known as Ozero, which managestheir adjacent country houses on Komsomolskoyelake near St Petersburg. All of Putin’s other friendsfrom the Ozero group (as we shall see in Chapter12) now hold top positions in government, bankingand the media.

The Chechen war and thebacklash

During Putin’s first years as president events inChechnya cast a long shadow over his claims to bebringing Russia into the ‘European family’. I spentseveral months in Chechnya during the earlier war(1994–96) and saw for myself how the republicwas ravaged by Russian forces. It seemed to methat there was more than sufficient evidence ofserious war crimes and human rights violations,which I and scores of other journalistsdocumented, but the international community –perhaps because it was preoccupied with thesimultaneous wars in the Balkans – did nothing

about them. The total devastation of the capital,Grozny, and the deaths of tens of thousands ofcivilians, whose apartment blocks were literallypulverised by Russian air power and artillery,could not be justified by the alleged purpose ofdestroying ‘bandits’, as the rebel forces wereknown. I interviewed survivors of Russian‘filtration camps’ – notorious prisons whereChechens were tortured to extract confessions, orjust for fun. I visited huge open graves, filled withhundreds of bodies, some with their hands tiedbehind their backs. I met dozens of grievingfamilies, saw murdered women and children,hundreds of homes destroyed in villages all acrossChechnya, streams of refugees fleeing fromRussian troops, people cowering in basementsfrom air attacks. I met defenceless, bedridden oldpeople, all but freezing and starving to death in therubble of their homes. But this was under BorisYeltsin’s presidency, and the West, besotted withhis alleged devotion to democracy, offered onlylimp condemnation, considering the conflict to bean ‘internal affair’.

The second war, unleashed by Putin in 1999,was by all accounts even more brutal. But fewerWestern journalists covered it, because it wassimply too dangerous. At least in the earlier warthe Chechens had been generally well disposed tojournalists; since then the republic had turned intoa lawless quagmire, where the risk of kidnappingand murder were just too great. The rebel fightersthemselves were now as barbarous as the Russianshad been. It was left mainly to courageousjournalists like Anna Politkovskaya of Novayagazeta to bring the truth to the world this time.(And even so no Western leader has called for anyRussian commander or politician to be tried forwar crimes.)

In the first war it was relatively easy forjournalists to move around in Chechnya. It was thisthat led to the highly critical coverage – not only inthe West but in Russia too, especially on NTV. Theauthorities learned their lesson, and the secondtime around tried to restrict access to the war zone.One Russian journalist, Andrei Babitsky, whoworked for Radio Liberty, was even kidnapped by

federal forces in early 2000 because of his criticalreporting. They then handed him over to Chechenfighters in exchange for Russian prisoners of war,as though he himself were a combatant – a fallacyapparently supported by Putin, who indicated thathe saw nothing wrong with the swap becauseBabitsky – a journalist, let’s not forget – was atraitor: ‘This was his own decision,’ Putin told thenewspaper Komsomolskaya Pravda. ‘He went tothe people whose interests he effectively served.’2

If Putin believed that critical reporting wastantamount to serving the enemy, then there couldbe no doubt about what he must have thought ofPolitkovskaya. After the taming of NTV shebecame the most important chronicler of Russianbarbarity in Chechnya, a patient listener to thecries of pain that the Kremlin wished to stifle.

The authorities maintained that the campaign inChechnya was a ‘security operation’, aimed solelyat eliminating terrorists. Politkovskaya spoke toeyewitnesses of Russian ‘security sweeps’, menlike 45-year-old Sultan Shuaipov, a refugee fromthe Grozny suburb of Novaya Katayama. He told

Politkovskaya how he had personally gathered up51 bodies from his street and buried them. Here isjust part of his story.

When 74-year-old Said Zubayev came out of No. 36on Line [street] 5 he ran into the federals and thesoldiers made him dance, firing their rifles at his feetto make him jump. When the old man got tired, theyshot him. Thanks be to Allah! Said never knew whatthey did to his family.

At about nine at night, an infantry fighting vehiclebroke into the Zubayevs’ courtyard, taking the gatesoff their hinges. Very efficiently and without wastingwords the soldiers brought out of the house and linedup by the steps 64-year-old Zainab, the old man’swife, their 45-year-old daughter, Malika (the wife ofa colonel in the Russian militia); Malika’s littledaughter, Amina, aged eight; Mariet, another daughterof Said and Zainab, 40 years old; their 44-year-oldnephew, Said Saidakhmed Zubayev; 35-year-oldRuslan, the son of Said and Zainab; his pregnant wifeLuiza; and their eight-year-old daughter Eliza. Therewere several bursts of machine-gun fire and theywere all left dead in front of the family home. Noneof the Zubayevs survived except for Inessa, Ruslan’s

14-year-old daughter. She was very pretty, and beforethe massacre the soldiers carefully set her to oneside, then dragged her off with them.

We looked desperately for Inessa but it was as if shehad vanished into thin air [Sultan says]. We think theymust have raped her and then buried her somewhere.Otherwise she would have come back to bury herdead. That same night Idris, the headmaster of SchoolNo. 55, was killed. First they battered him against awall for a long time, and broke all his bones, thenthey shot him in the head. In another house we found,side by side, an 84-year-old Russian woman and her35-year-old daughter, Larisa, a well-known lawyer inGrozny. They had both been raped and shot. The bodyof 42-year-old Adlan Akayev, a Professor of Physicsat the Chechen State University, was sprawled in thecourtyard of his house. He had been tortured. Thebeheaded body of 47-year-old Demilkhan Akhmadovhad had its arms cut off too. It was one of the featuresof the operation in Novaya Katayama that they cutpeople’s heads off. I saw several bloodstainedchopping blocks. On Shevskaya Street there was ablock with an axe stuck in it, and a woman’s head in ared scarf on the block. Alongside, on the ground, alsoheadless, was a man’s body. I found the body of a

woman who had been beheaded and had her stomachripped open. They had stuffed a head into it. Was ithers? Someone else’s?3

Despite all the documented cases of brutality,only one senior officer has ever been brought tojustice. Colonel Yuri Budanov was accused ofkidnapping, raping and murdering an 18-year-oldChechen woman, Kheda Kungayeva, in a drunkenrampage. She was dragged from her home bysoldiers and abducted in an armoured personnelcarrier, allegedly because they thought she was asniper. The rape charge was eventually dropped,and in court Budanov admitted strangling thewoman, though he claimed to have beentemporarily insane at the time, enraged whileinterrogating her. At first he was found not guilty,but then, after a retrial, was sentenced to ten yearsin prison. He was released in January 2009, 15months early, and then murdered in a Moscowstreet in June 2011.

The payback for the Russian campaign was adecade of Chechen terrorist attacks across Russia

– in aeroplanes, underground trains, schools andstreets. On 18 April 2002, in his annual state-of-the-nation speech, President Putin declared the warover. But six months later terror struck right at theheart of the Russian capital. In October 2002, up to50 armed Chechens, many of them women, strodeinto the Dubrovka Theatre during a performance ofa musical called Nord-Ost, and took the playersand the 850-strong audience hostage. They werearmed with guns and explosives and the women puton suicide belts. They demanded the immediateand unconditional withdrawal of Russian troopsfrom Chechnya – within one week, otherwise theywould start shooting hostages.

For the next three days Putin was locked inalmost constant crisis meetings with his securitychiefs. At the first session the siloviki proposedstorming the building, while the prime minister,Mikhail Kasyanov, sharply disagreed, calling fortalks with the terrorists in order to avoidcasualties. According to Kasyanov, the securitychiefs argued there was no point in makingconcessions because casualties would be

unavoidable in any case. Putin was scheduled totravel to Mexico for a summit of Asian and Pacificleaders, but sent Kasyanov in his place. Some havesuggested the decision was taken in order toremove from the process the only man opposed tousing force to free the hostages, but even Kasyanovconcedes that there was no way Putin himselfcould have left the country at that point (especiallyin the light of the criticism he earned over hisresponse to the Kursk disaster).4 President Yeltsinhad gone to a G7 meeting in Halifax, Canada, inthe middle of the Budyonnovsk hostage crisis in1995, leaving his prime minister, ViktorChernomyrdin, to negotiate with the captors andallow them to escape. Putin certainly was notgoing to repeat that mistake.

A number of politicians and journalists(including Anna Politkovskaya) did try to reasonwith the hostage-takers, but to no avail. In the endthe siloviki did it their way. Special forcespumped an anaesthetic gas into the theatre to sedatethe terrorists (and the hostages), and thencommandoes stormed in. There was a gun-fight, in

which all of the terrorists were killed, includingthose who had already been knocked out by thegas. But 130 hostages also died – mostly from theeffects of the toxic chemical and the failure toprovide them with immediate medical care whenthey were brought out of the building. There wasmuch criticism of the action, including the fact thatthe chemical composition of the gas used was sosecret that even medics attending the scene werenot told what it was or what antidote could beused, almost certainly worsening the death toll.

Putin later defended his actions, saying hundredsof lives had been saved. And in truth, nogovernment in the world has ever worked out aperfect way to cope with such a situation. But hadthe strongmen really taken enough care to protectthe hostages’ lives? Or were they more intent onkilling the terrorists? When the Kursk sank it isassumed that Putin turned down foreign offers ofhelp primarily because he did not want NATOrescuers poking around a top-secret Russiannuclear submarine. The chemical agent used to endthe theatre siege was also a military secret, the

exact formula of which was never revealed.The big issue that the Russian authorities refuse

to face up to is what motivates the terrorists. Is it,as Putin always claims, part of an internationalIslamist movement, with its roots in Pakistan andAfghanistan, or is it a vengeful response toRussia’s vicious attempts to subjugate Chechnyasince 1994? The answer can be found in some ofthe gunmen’s answers to Anna Politkovskayaduring the theatre siege. She asked one of thecaptors to release the older children from thetheatre (the younger ones had been released).‘Children?’ came the response. ‘There are nochildren in there. In security sweeps you take oursfrom 12 years old. We will hold on to yours.’

‘In retaliation?’ Politkovskaya asked.‘So that you know how it feels.’Politkovskaya asked if she can at least bring

food for the children.‘Do you let ours eat in the security sweeps?

Yours can do without too.’

Taming the oligarchsIn his first address to the nation, 12 hours afterbecoming acting president, Putin had pledged torespect freedom of speech, freedom of the massmedia and property rights. On 28 July 2000 he hada showdown with the country’s top 20businessmen and bankers to explain what he meant,and set out the new rules of the game.

These were men who had acquired vast fortunesduring the Yeltsin years by exploiting everyloophole, breaking and bending laws, bribery,thuggery, extortion, and, most simply of all, byhelping themselves to companies and resourcesoffered to them in exchange for ensuring Yeltsin’spolitical survival. They owned the country’s majoroil and gas companies, pipelines, aluminiumsmelters, telecoms and advertising, automobileplants, iron and steel works, a brewery and the topbanks. Mingling with them in a grand, columnedKremlin hall as they waited for the president toarrive were the government’s young team ofreformers – Kasyanov, Kudrin, Gref – who above

all needed the tycoons to pay their taxes so theycould get the country’s finances in order. Theoligarchs themselves had other concerns, havingheard Putin threaten their existence ‘as a class’.They had just seen their colleague Gusinskyeffectively stripped of his wealth and hounded outof the country. His fellow media tycoon BorisBerezovsky was nowhere to be seen.

The oligarchs were seated democraticallyaround a huge doughnut-shaped table. But when thepresident joined them in the circle there was nodoubt about who was in charge. The meeting lastedtwo and a half hours, but Putin’s offer was simple:there would be no reversal of the privatisationprocess, on two conditions – that the oligarchsstarted paying their taxes, and that they kept out ofpolitics. Putin was careful not to put it in the formof an ultimatum, but that is what it was.

In an interview, German Gref summed up whathappened: ‘Putin sent a strong message that nonationalisation or expropriation of property wasplanned. He put it to them like this: “We aremaking a gesture to you, we are sharply decreasing

taxes, we are creating a favourable investmentenvironment and defending property rights. Butplease, since we are lowering the taxes, youshould pay them. And secondly, if it’s businessyou’ve chosen, then do business.” ’5

The businessmen emerged from the meetingalmost singing with relief. Most of them had nodesire to get into politics anyway, and paying taxeswas a small price to pay for their fortunes.Vladimir Potanin, president of the mining andmetals conglomerate Interros, sounded almostrepentant: ‘The oligarchs had set themselves up asan elite, but society doesn’t accept this elite. Wehave to behave better.’

The initiative for this meeting had come fromBoris Nemtsov, the former governor of NizhnyNovgorod who had helped to kick-start theprivatisation process in the mid-1990s and nowheaded a political party, the Union of Right Forces,to defend the interests of the nascent middle class.He described the event as a watershed – the pointwhere (he put it, with irony, in Marxist terms) ‘theten-year history of the primitive accumulation of

capital’ came to an end. In other words, this wasthe moment when Russia’s ‘robber barons’ weregiven the chance to turn into respectablebusinessmen.

For the most part, the oligarchs went along withthat. Gusinsky and Berezovsky went into exile –the former quietly, the latter continuing to wagebattle against Putin from abroad. RomanAbramovich, the owner of the oil giant Sibneft, didbecome a member of the Duma, and also governorof the remote region of Chukotka. But he did notuse his political influence to challenge Putin. Hewas far more interested in his British football club,Chelsea, which he bought in 2003.

Only one oligarch refused to toe the line –Mikhail Khodorkovsky. His intransigence wouldland him in a Siberian prison camp for many yearsand turn him into one of the greatest sources oftension between Russia and the West.

The Khordorkovsky affairKhodorkovsky had taken his earliest steps in

business almost as soon as it was possible, back inthe days of Mikhail Gorbachev’s tentativeperestroika reforms. As a communist youthfunctionary, he used his connections to set up acafé, an import business and, eventually, one ofRussia’s first commercial banks – Menatep. Fromthen on his rise was vertiginous. In 1995, in the‘loans for shares’ scheme designed to bail out thebankrupt Yeltsin government, he acquired a majorstake in Russia’s second-largest oil company,Yukos. The following year he bought the shares –effectively from himself – and ended up with amajority stake in Yukos for just $309 million, afraction of its real value. Within months thecompany was worth $6 billion. None of this brokethe law: the scheme was devised by thegovernment itself.

There is no doubt that Khodorkovsky was adevious wheeler and dealer as he built his empire.In his excellent study, The Oligarchs, theAmerican journalist David Hoffman confesses thateven after painstaking investigation he could notfathom some of Khodorkovsky’s manoeuvres and

schemes, involving offshore transactions, frontcompanies and ‘sleight of hand’.6

But once he had complete control of Yukos heunderwent something of a conversion and decided(largely because he wanted to attract foreigninvestors) to adopt squeaky-clean Westernstandards of accountancy and transparency.Khodorkovsky became the darling of the Westbecause he, more than any other oligarch, seemedto epitomise a new breed of Russian capitalist –not just a money-grabbing shark, but aphilanthropist too. He adopted a corporategovernance charter at Yukos, and was the firstbusinessman to introduce US-standard accountingpractices. He used some of his fortune to set up alyceum on an eighteenth-century estate outsideMoscow to provide education to 130underprivileged children. His Open RussiaFoundation distributed more than $15 million ayear to civic projects and charities involved ineducation, public health, leadership programmesand cultural development.

And yet there is no name more certain to bring

that look of icy contempt into Vladimir Putin’seyes. Khodorkovsky would end up in jail foreconomic crimes – tax evasion, fraud,embezzlement. But asked about him at pressconferences, Putin would not shrink from throwingin a few other accusations – ‘political’ crimes,even murder.

To be sure, Khodorkovsky was no saint. JohnBrowne, the chief executive of BP, was not wonover when Khodorkovsky visited him in Britain inFebruary 2002, to offer BP a 25 per cent share inYukos. Browne later described how the soft-spoken Khodorkovsky made him nervous. ‘Hebegan to talk about getting people elected to theDuma, about how he could make sure oilcompanies did not pay much tax, and about how hehad many influential people under his control. Forme, he seemed too powerful. It is easy to say thiswith hindsight, but there was something untowardabout his approach.’7

For the reforming Russian government‘untoward’ was an understatement. According toGerman Gref, ‘not a single draft went through

without Yukos’s say so’. In fact, the bribing ofmembers of the State Duma was commonplace –deputies pocketed fortunes from all sorts ofbusiness interests – but the oil companies weremost active, and Yukos most of all. When it cameto a new oil export duty that would have reducedthe oil company’s profits, things got heavy. Grefrecalls how he was visited on the eve of the Dumavote by Vasily Shakhnovsky, president of Yukos-Moskva. ‘Mr Gref,’ he said, ‘we very muchappreciate what you have done for thedevelopment of the market economy, but tomorrowyou’re going to introduce a law that contradicts ourinterests, so we would like you to know that, firstof all, this law will not get through. Everybodywill vote against it – we have agreed on that witheverybody. And the second point: if you insist onit, we will write a collective letter from all oilproducers asking for the resignation of you and MrKudrin for lack of professionalism. It’s nothingpersonal, but maybe you could just postpone thediscussion of this law, and we can come to somearrangement with you.’8

When Kudrin and Gref arrived in the Duma nextmorning they discovered a solid bloc, including thelarge communist faction, had been stitchedtogether, which defeated the bill. Gref later musedon the irony of it all: ‘The communists, supposedlythe champions of social policy, voted against a taxon the super-incomes of the oil companies!’

It was a dramatic blow for the reformers. ‘Wedidn’t have enough resources in the budget to payour debts,’ Gref recalled. ‘Oil prices were rising,but that was just making the oil companies richer.We got nothing from it.’ It took another year beforeGref managed to pass a diluted version of the lawthrough parliament.

Even more seditious, from Putin’s point of view,were Khodorkovsky’s political ambitions. Hefunded several opposition parties, including theliberal Yabloko, the Union of Right Forces, and theCommunist Party. In early 2003 he held secretmeetings with party leaders and offered to donatetens or even hundreds of thousands of dollars tofinance their campaigns in the coming DecemberDuma elections.9 According to the prime minister,

Mikhail Kasyanov, it was the financing of thecommunists that particularly infuriated Putin.Kasyanov said later he was astonished to discoverthat while supporting the two Western-orientedparties was ‘approved’, funding the communists –though perfectly legal – apparently required somespecial secret dispensation from the president.10

Khodorkovsky claimed that what he did wasnormal ‘lobbying’, as happens in any country, butthe Kremlin saw it differently: ‘He was buying upthe Duma!’ Putin’s spokesman, Dmitry Peskov,exclaimed to me, clearly as affronted by the ideaas his boss was. The Kremlin apparently fearedthat Khodorkovsky was planning to use hisinfluence in the Duma to change the constitution, toturn Russia into a parliamentary democracy – andperhaps even become prime minister himself,directly challenging Putin’s power.

People who know Khodorkovsky often point tohis reckless streak. It was on show at a dramaticand perhaps fateful meeting of leading businessmenwith Putin in St Catherine’s Hall in the Kremlin on19 February 2003.11 The main item on the agenda

was corruption. Khodorkovsky was the mainspeaker, and he was planning to say someextraordinarily provocative things about corruptionhe suspected was going on in the top circles ofgovernment. He was nervous, and called his vice-president, Leonid Nevzlin, for advice. ‘Do youthink my presentation is dangerous?’ he asked.

‘Well,’ Nevzlin conceded. ‘What if Putinhimself is actually mixed up in these deals?’

‘Come on!’ exclaimed Khodorkovsky. ‘Thepresident controls the state budget. Do you thinkhe’d get involved for a few million dollars ofkickback?’12

Khodorkovsky cleared his presentation withPutin’s chief of staff, Voloshin, and prime minister,Kasyanov. He went into the meeting armed withgraphs and bar charts to illustrate his points.

Much of his presentation was based on opinion-poll findings: 27 per cent of Russians believedcorruption to be the most dangerous threat to thenation; 49 per cent believed most state officialswere corrupt (15 per cent thought all officialswere); a large majority felt the government either

could not or would not do anything to combatcorruption.

‘If you look at the next slide,’ Khodorkovskywent on, ‘you can see that the level of corruption inRussia is in the region of 30 billion dollars – that’s10 to 12 per cent of GDP.’

Another slide showed that 72 per cent ofRussians had no faith in the justice system becausejudges were institutionally corrupt. AndKhodorkovsky raised a remarkable fact aboutapplications for Russian university places. Youngpeople were less interested in studying to becomeengineers or oilmen than ... tax inspectors! Theirsalaries would be low, but the opportunities tosupplement them through bribery were enormous.‘If we are setting our young people on this course,it’s something we should think about,’ saidKhodorkovsky.

‘Well, there is food for thought there,’ retortedPutin, ‘but let’s not apply the presumption of guiltto our students!’

But Khodorkovsky was only warming up. Nowhe moved on to a specific case of corruption that

involved people in Putin’s closest circle –specifically his deputy chief of staff and confidantIgor Sechin, who effectively controlled the stateoil sector. (He would soon become chairman of thegovernment-owned Rosneft.)

Khodorkovsky referred to Rosneft’s purchase,the previous month, of a smaller oil company,Severnaya Neft, for $600 million – far in excess ofits true value. ‘Everyone believes that this dealhad, so to speak, an ulterior motive.’

For everyone listening the implication wasclear. As Andrei Illarionov, Putin’s adviser,recalled later: ‘It was obvious that the differencebetween the sale price and the actual price was apure and simple kickback – corruption.’13 In otherwords, the huge excess payment to the smallcompany was shared by its owners with thegovernment officials who had authorised it.

‘Yes, corruption is spreading in our country,’Khodorkovsky continued. ‘And you might say thatit started right here with us ... but it has to stopsome time!’

Putin shot back, asserting that as a state company

Rosneft was obliged to buy assets such asSevernaya Neft in order to increase its reserves.As for Khodorkovsky’s own company, Putin hintedthat he had acquired it illegally: ‘Some companieslike Yukos have huge surpluses of oil. How theyacquired them is precisely what today’s meeting isabout! And let’s not forget the question of thepayment – or non-payment – of taxes. Your owncompany [Yukos] had problems with non-paymentof taxes. I have to give you your due – you came toan agreement with the tax authorities and the casewas closed, or is being closed. But how did theseproblems arise in the first place?’

And Putin ended with a clear threat. ‘So I ampassing the buck back to you,’ he said. It meant:you talk to me about my people being corrupt, andmy people will start looking at your corruption.

Kasyanov, who was sitting next to the president,says the oligarchs around the table ‘nearly climbedunder the table in fear’. Was Putin reopening thewhole issue of how Russia’s strategic industrieswere privatised in the 1990s?

Kasyanov says he went to see Putin in his office

afterwards. ‘Naively, I thought the president didn’tknow the details of the Rosneft deal. I said, “Youshouldn’t have reacted so sharply. Khodorkovsky’sright.” ’ But Putin shot back, insisting that it wasRosneft’s right as a state company to increase itsassets and there was nothing wrong with the deal.Kasyanov was taken aback: ‘He started citingvarious figures that even I, the prime minister,didn’t know. He knew more about the affair than Idid.’14

To try to pre-empt the reprisals at which Putinhad hinted, Khodorkovsky came to Kasyanov twoweeks later with a plan. Speaking, he said, onbehalf of his fellow oligarchs, he proposed a newlaw, under which the tycoons who had bought upstate enterprises on the cheap in the 1990s –businesses that were now worth billions of dollars– should pay compensation to the state, a sort ofone-off tax to cover the massive increase in theirworth. The windfall would go into a special fundto finance ‘important reforms’. Kasyanov liked theidea, which could have given the government anextra $15–20 billion to spend on new highways,

high-speed rail links, power lines, airports and thelike. He asked Khodorkovsky to draw up a draftlaw, which he did within a week. Kasyanovpresented it to President Putin. And that was thelast that was heard of it.15 Putin was alreadythinking of other ways to make Khodorkovsky pay.

Leonid Nevzlin remembers receiving disturbingnews from a contact in Russia’s intelligenceservice. ‘I was given information that there was aspecial group answerable only to the FSB chiefPatrushev and his deputy Zaostrovstsev, whose jobwas to build a criminal case against Yukos andwatch its managers and shareholders.’

In the early summer a think-tank known as theNational Strategy Council published an analyticalreport entitled ‘The State and Oligarchy’, writtenby an influential thinker, Stanislav Belkovsky, whowas regarded as close to the siloviki. He arguedthat the oligarchs were preparing nothing less thana creeping putsch, which would bring the Dumaunder their control, leading to the rewriting of theconstitution and the crowning of Khodorkovsky asall-powerful prime minister, with the presidency

emasculated.At Putin’s annual press conference a few days

later, a reporter was primed to ask a questionabout the Belkovsky report, and the president wasready with a chilling reminder of how he dealtwith his political enemies: ‘I am absolutely surethat the appropriate separation of business andpower has been established ... Those who disagreewith this policy, as the saying goes, either nolonger exist, or have been sent far away.’

Putin had many reasons to fear or resentKhodorkovsky. For two and a half years he haddefied the president’s instruction to the oligarchsto keep out of politics. But even Khodorkovsky’spurely business activities challenged the siloviki.They regarded the country’s natural resources,particularly oil and gas, as vital strategic assets,not to be entrusted to private individuals – andcertainly not to foreign states. Khodorkovsky hadthe opposite view: the private sector could runthings more efficiently, and if foreign participationhelped, so much the better.

In April 2003 Yukos (now Russia’s largest oil

producer) agreed to merge with RomanAbramovich’s Sibneft to form what would be theworld’s fourth biggest oil company, worth $35billion. (It was this deal that allowed Abramovichto buy Chelsea football club.) Khodorkovsky thentook a further step towards disaster – by startingtalks with both ChevronTexaco and ExxonMobilabout selling one of them a major stake in theRussian company. The prime minister Kasyanovgave his approval for the deal. But the silovikiwere incensed.

Through the summer of 2003 events moved fast.In June Yukos’s security chief, Alexei Pichugin,was arrested and accused of murder. Thefollowing month Khodorkovsky’s partner, PlatonLebedev, chairman of Group Menatep, the holdingcompany that controlled Yukos, was also arrested.Prime Minister Kasyanov immediately condemnedit and pointed out that arresting entrepreneurs onsuspicion of economic crimes was bound toundermine the country’s image and deter investors.

Leonid Nevzlin expected the worst. ‘Lifebecame intolerable. They didn’t even bother to

disguise the cars they watched us from. Every nightI went to sleep with a bag packed so that if theycame for me at five in the morning I’d have what Ineeded for prison.’ He left Russia for Israel. ButKhodorkovsky ignored the warnings to the last.

In October armed police raided Khodorkovsky’sorphanage near Moscow and took away itscomputers. And a few days later the president ofExxonMobil, Lee Raymond, came to Moscow foran economic conference and talks with thepresident. He appears to have given Putin the –probably wrong – impression that Khodorkovskyplanned to sell the American company not just 25per cent but a controlling 51 per cent of Yukos-Sibneft. Khodorkovsky’s deputy, AlexanderTemerko, concedes, ‘a company like Exxon cannotbe a minority shareholder. Of course it says, we’llbuy 25 per cent, but we need an option for acontrolling stake.’

Putin was by now, it seems, incandescent withrage. BP’s John Browne recalled later: ‘Shortlybefore Khodorkovsky’s arrest, in a privateconversation, Putin made a passing but steely

remark to me: “I have eaten more dirt than I needto from that man.” ’

Putin called in the prosecutor general, VladimirUstinov, to arrange Khodorkovsky’s arrest. It cameon 25 October. The oil tycoon had flown toSiberia, quixotically ignoring a fax that had arrivedtwo days earlier, bearing Ustinov’s signature,summoning him to report to the prosecutor’s officein connection with ‘irregularities in the tax regimeof the Yukos oil company’. As his plane refuelledin Novosibirsk, armed FSB troops stormed it andled Khodorkovsky away in handcuffs. His defianceof the siloviki was about to cost him his freedomand his fortune.

The reactionThe headlines said it all: ‘Capitalism with Stalin’sface’ (Nezavisimaya gazeta), ‘A coup in Russia’(Kommersant). The New York Times wrote:‘Russia lurched toward a political and economiccrisis as the country’s stocks, bonds and currencyplummeted after the weekend arrest of Russia’s

richest man.’Khodorkovsky’s colleagues in the Union of

Industrialists and Entrepreneurs issued a statementcondemning the arrest: ‘Today Russian businessdoes not trust the law-enforcement system and itsleaders. Thousands of small and mediumenterprises suffer daily from their arbitrary rule.The authorities’ crude mistakes have thrown thecountry backwards by several years andundermined confidence in their statements aboutthe impermissibility of reversing the results ofprivatisation.’

Trading on the tumbling Moscow currencyexchange was suspended. Putin’s chief of staff,Alexander Voloshin, resigned. His successor,Dmitry Medvedev, publicly questioned thewisdom of the arrest, saying, ‘This is a dangerousthing, as the consequences of measures not fullythought out will have an immediate effect on theeconomy ... and cause indignation in politics.’16

Amid the turmoil, Putin rejected calls from otheroligarchs for a meeting, and demanded an end towhat he called the ‘hysteria and speculation’,

adding (as if he were a mere bystander) that for thecourts to arrest a man they must have had reasonsto do so. ‘There will be no meetings, no bargainingabout the work of the law enforcement agencies.’Government ministers, he said, should not getdragged into discussing the matter.

The prime minister, Kasyanov, tells a curiousstory about a certain appointment that the Kremlinwanted him to make around this time. ViktorIvanov, the former FSB general whom Putin hadtaken on as his chief head-hunter, called Kasyanovseveral times, urging him to appoint a certainyoung man as a deputy tax minister. Kasyanovdemurred, not understanding the urgency of theappointment and unsure why the man, who hadworked most of his career in St Petersburgfurniture stores, was qualified for the job. He wasnot aware at the time that Anatoly Serdyukov wasthe son-in-law of Viktor Zubkov, the first deputyfinance minister (and former St Petersburgcolleague of Putin). When Kasyanov was sacked inFebruary 2004, Serdyukov was immediatelymoved to the tax ministry – where he was put in

charge of the case against Khodorkovsky, andwithin two weeks promoted to be head of theFederal Tax Service. Putin now had a man hecould trust to assemble the most damagingevidence against his enemy.

The two faces of PutinThe events described in this chapter – the stiflingof the media, the establishment of the ‘vertical ofpower’ and appointment of Putin’s cronies to keyjobs, the war in Chechnya, the callous response tothe sinking of the Kursk, the taming of the oligarchsand the persecution of Khodorkovsky – all had asalutary effect on those in the West who haddecided from the outset to do business with Putin.The man who was stretching his hand out toWestern leaders, and implementing welcomeeconomic reforms at home, was at the same timeacting true to type, confirming his own phrase:there is no such thing as an ex-Chekist. His actionsstrengthened 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’ forPutin, and he must decide who he wanted to be. ‘Ishe the westward leaning ally of President Bush andTony Blair, or someone whose real affection is forthe bad old days of the Soviet Union? ... If MrPutin opts for the authoritarian path, then it is timefor London and Washington to reassessrelations.’17

But just as the West was disillusioned withPutin, so Putin was also becoming disillusionedwith the West he’d been so keen to court.

5

NEW EUROPE, OLDEUROPE

A foot in NATO’s doorIt was Tony Blair, perhaps, who best understoodthe ache that gnawed at Vladimir Putin’s KGBsoul. The two men continued to meet regularlyafter the ground-breaking first visit to StPetersburg before Putin was elected. As well asformal talks they had jeans-and-shirt-sleeves get-togethers at Chequers, the prime minister’s countryresidence, and tête-à-têtes over vodka and pickled

gherkins at Pivnushka, a Moscow beer hall. Blairtried to soothe the Russian’s anxieties aboutAmerican plans for a missile defence shield. Andbehind Putin’s bluster about how Moscow wouldhave to take counter-measures he sensed a deeperproblem.

One of Blair’s aides, in an off-the-recordinterview, put it in terms that were socondescending they would have incensed Putin hadhe known this was what Blair thought: ‘The mainthing Tony took away from those meetings was theneed to treat them seriously. Their problem wasthat they felt excluded from the top table andweren’t being treated as a superpower. You had toshow them respect. Even if they weren’t really asuperpower any more, you had to pretend theywere. This was the point Tony made to theAmericans.’

To put flesh on the idea, Blair came up with aproposal to create a new NATO–Russia Council(NRC), to bind the Russians more closely to theWestern alliance – stopping well short ofmembership, but at least giving them a sense of

belonging to the club. The NRC would represent asignificant upgrading of relations from theconsultative ‘Permanent Joint Council’ that hadexisted since 1997 and given Russia zero influenceover the alliance’s actions. Russia would nowhave a permanent ambassador at NATOheadquarters, who would participate in sessions ofthe NRC on a par with each of the 19 otherambassadors – not ‘Russia plus NATO’, in otherwords, but ‘Russia plus the US, France, Britain,Germany’, and so on.

Blair’s initiative went down well in Westerncapitals, where it was seen as a realisticalternative to the more fanciful vision of actualNATO membership, which some, including theGerman chancellor, had discussed. The idea soongot hijacked by the Italian prime minister, SilvioBerlusconi, who had also been striking up a bondwith Putin. The two men were rather similar intemperament – equally ‘blokeish’, equally vain andwith a similar taste in earthy or tasteless jokes.Putin also saw in Berlusconi’s media empire somejustification for his own control of Russian

television.One Friday evening early in 2002, NATO’s

secretary general, George Robertson, had just gotoff a plane at Edinburgh airport, heading for aweekend at home in Scotland, when his mobilephone rang. It was Berlusconi. He had decided thatItaly would host a special NATO summit to launchthe NRC.

‘Hang on, Silvio,’ said Robertson. ‘We haven’tquite got to that point yet.’

‘No, no,’ replied Berlusconi. ‘I have spoken toVladimir. 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 19countries in NATO and I have to consult all ofthem. 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 theothers to let Berlusconi stage the show. And ashow it was, with no expense spared. Berlusconitook a run-down air base at Pratica di Mareoutside Rome and transformed it into the Roman

equivalent of a Potemkin village – a palatialcanvas conference centre modelled on theColosseum, complete with ancient marble statues.

The historic agreement was duly signed on 28May. It would allow Russian generals for the firsttime to have permanent offices in NATO’sheadquarters. And while Russia would not be ableto veto alliance decisions, it would at least takepart in joint discussions about issues such aspeacekeeping, regional security, search-and-rescueoperations and the fight against internationalterrorism and nuclear proliferation. In practice,according to Blair’s chief of staff, JonathanPowell, the original idea – to give Russia a ‘realvoice’ – got watered down in the NATObureaucracy.2 Russia would later complain thatNATO representatives would usually meet aheadof any Council session, coordinate their positionand then effectively act as a bloc in their talks withRussia.

At the press conference after the signingceremony, Putin said something that startled someof those present with its frankness. ‘The problem

for our country,’ he said, ‘was that for a very longperiod of time it was Russia on one side, and onthe other practically the whole of the rest of theworld. And we gained nothing good from thisconfrontation with the rest of the world. Theoverwhelming majority of our citizens understandthis only too well. Russia is returning to the familyof civilised nations. And she needs nothing morethan for her voice to be heard, and for her nationalinterests to be taken into account.’

His words were so powerful that Robertsonremembered them and could almost recite themfrom memory nine years later. ‘That seemed to meto be quite a dramatic appraisal, a confession, by aRussian leader about the years of failure and whathe aimed to do in the future.’

Putin’s statement also confirmed exactly whatBlair had understood about his craving for respect.But there were many in the West who looked atwhat was going on inside Russia and refused tobelieve that she really was a repentant daughter‘returning to the family of civilised nations’.

Just what do we think ofRussia?

Within the Bush administration there were twodiametrically opposed views of what to do aboutRussia – plus many shades of opinion in between.Those, like national security adviser CondoleezzaRice, who spoke Russian and had a background inSoviet studies, were not necessarily the bestdisposed towards the new Russia. Several ofPutin’s advisers have described her to me as ‘aSoviet expert, not a Russia expert’. They felt thatshe still viewed Russia through red-tintedspectacles. She took a tough line on Russia’saggression in Chechnya, and an even tougher lineon any Russian interference in neighbouringcountries, which she took to be a sign of post-Soviet recidivism – but nonetheless she did try tounderstand the underlying causes of Russianpolicies.

Some of the Russia experts in the administrationargued that there was not enough consideration of

where Russia was coming from, that you couldn’texpect it to become ‘Westernised’ overnight (orperhaps at all), and that the way to win Putin roundwas to understand his fears (the Blair view) andaccept that Russia had a legitimate right to expectits voice to be heard and its interests to be takeninto account. This view was represented moststrongly at the highest level by Secretary of StateColin Powell. According to one insider, speakingoff the record, President Bush himself, havingdeveloped a real friendship with Putin, tilted inthat direction, but policy tended to be shaped moreby those who simply did not trust Russia, the so-called ‘neo-cons’ such as Vice-President DickCheney, Defence Secretary Donald Rumsfeld,Under-Secretary of State John Bolton, Dan Fried,who handled European and Eurasian affairs at theNational Security Council, and Nick Burns, USambassador to NATO (and later under-secretary ofstate). Somewhere between the two camps werenational security adviser Condoleezza Rice andher deputy Stephen Hadley.

The insider went on: ‘Some of the policy makers

understood a lot, but they understood it from aparticular perspective. The real drivers behindRussia policy were people who had been workingon European security issues all the way through the1990s, and the goal was to continue the unfinishedbusiness of the 1990s – a Europe free, undividedand peaceful and all the rest of it. And there was aview that if you took in the Russia perspective youwere somehow affirming its right to assert certaininterests or privileges.’

So Bush’s Russia policy was largely forged bypeople who were above all concerned with thesecurity of Central and Eastern Europe, whobelieved the West had ‘won’ the Cold War, andwere determined to cement the former Sovietsatellites into the free West, including NATO andthe European Union – even at the risk of alienatingRussia in the process. Poland, the Czech Republicand Hungary had already joined NATO in 1999,and now the alliance was about to embark on asecond wave of enlargement, to include Slovakia,Slovenia, Bulgaria and Romania, plus – mostcontroversially as far as Russia was concerned –

the Baltic states of Estonia, Latvia and Lithuania,which had once been part of the USSR and stoodright on Russia’s present borders.

Dan Fried said in an interview: ‘It was notsustainable to argue that the interests and freedomsof other countries, which suffered under Sovietoccupation, should be held hostage to a Russiansense of deprivation of empire. I mean, to somedegree the Soviets had achieved a sphere ofinfluence in Europe thanks to Mr Molotov and MrRibbentrop, or if you prefer, Hitler and Stalin.’3

Over breakfast in a London hotel I put it to NickBurns that Russia might have legitimate concernsin seeing NATO expand right up to its doorstep,and America installing new weaponry there. Itwas, after all, their ‘backyard’. His answer wasquite uncompromising: ‘Tough! They lost that right.This was in the American national interest.’4 Itwas an answer that seemed to me to precludeaccommodating even a reformed, ‘democratic’Russia: it had ‘lost the right’ to influence affairs inits backyard, apparently by having inherited thesins of the Soviet Union, whereas the USA did

have the right to influence affairs there because itwas ‘in the American national interest’.

He went on: ‘When it came to admitting theBaltic countries into NATO, there were reallyfurious arguments about it – both with theEuropeans and within Washington. Even GeorgeTenet [the CIA director], for example, was againstit. But many of us had essentially lost hope that wecould trust the Russians or integrate them into theWest. By 2002, there was a growing suspicion thatPutin wasn’t the person they thought he was, that hecouldn’t make Russia a reliable ally. Weconcluded that we wanted a good relationship withRussia, but the most important target in the region,post-Cold War, was the freedom and liberation ofEastern and Central Europe. There was lots ofopposition in the US, and we had to fight hard, butwe thought we had to be careful about theRussians. We thought it was more important tolock in the one real gain of the fall of the USSR.George W. Bush was a strong believer in thatargument.’

The neo-cons believed the policy of putting faith

in Russia in the 1990s had failed. ‘I knew Russiawould try to become dominant in Europe again,and we had to protect the Eastern and CentralEuropeans,’ said Burns. ‘Putin is all about bringingpower back to Russia. This was becoming clear bylate 2002.’5

That phrase was revealing: making Russiapowerful again was precisely what Putin wanted –and precisely what many in Washington could notstomach.

The administration’s ‘Russophiles’ found theirviews echoed in Western Europe, but not inWashington. One of them says: ‘There seemed tobe a viewpoint that by understanding and laying outthe Russian point of view you were endorsing itand legitimising it. This was not the view you findin Europe. This is why we were at odds with theGermans and even the UK because most of theEuropean interlocutors were trying to factor inwhat Russia felt about things, because they didn’twant an open confrontation.’

There were many reasons why France andGermany felt closer to the Russians than the

Americans. It was not that they underestimated theformer Warsaw Pact countries’ longing to join theWest’s structures and to protect themselves fromthe country that had oppressed them for 50 years.Germany, in particular, was still revelling in thejoy of reunification after the collapse of the BerlinWall. Nor was it just a matter of pragmatism andtrade, although the latter was important forGermany. Rather, there was an ill-defined sense,especially in European intellectual circles, thatRussia ‘belonged’ to Europe, that they shared ahistory and culture, and the time was right –whatever the shortcomings of Russian democracy –to welcome them ‘home’. Indeed, the argumentwent, welcoming them home would be preciselythe best way to improve democracy there.

President Jacques Chirac of France epitomisedthis view. He had a strong personal interest inRussia. His parents had had a Russian émigré intheir home in the 1930s, and Chirac himself hadlearned Russian and even translated Pushkin’snovel in verse, Yevgeny Onegin. According to hisdiplomatic adviser, Maurice Gourdault-Montagne,

Chirac felt there was something ‘eternal’ aboutRussia, that it was neither fully European nor fullyoriental. He had got on well with Yeltsin, whogave him the sauna and caviar treatment, andalthough he was cool towards Putin at first, he waswilling to put his reservations aside, evenregarding Chechnya.

‘Chirac said everything possible to help Putinand not to criticise him, and to help him appear onthe world stage as a responsible leader having todeal with enormous stakes – how to catch up fromSoviet times and become a modern country,’ saysGourdault-Montagne. ‘Chirac thought there was noevidence for Russia going back to Soviet times.They had jumped into a new world, but it was along task, and they had to be supported. And it wasin the interest of the West to help the Russians asmuch as possible because we have commoninterests. Chirac thought the stability of thecontinent was on the axis of Paris, Berlin andMoscow – hence all these trilateral meetings wehad until 2007. It was fascinating to see how thethree got on together.’6

German chancellor Gerhard Schröder, the thirdin the trio, was like most of his compatriotseternally grateful to Russia for withdrawing itstroops without fuss from Eastern Germany. As agesture of goodwill he later wrote off €6 billion ofdebt that Moscow owed the former GermanDemocratic Republic.

The relationship, it is true, did not get off to avery good start. During the German election of1998 Schröder had promised to stop pouring vastamounts of cash into Russia, as his predecessorHelmut Kohl had done. He wanted a pragmaticrelationship based on business interests and acertain diplomatic reserve – none of the bear-hugging that Kohl and Yeltsin had indulged in. Hisforeign minister, Joschka Fischer, almost caused adiplomatic incident during his first meeting withPutin in January 2000 by denouncing his Chechencampaign and demanding an immediate ceasefire.Schröder himself did not shy away from visitingthe three Baltic republics (something Kohl hadrefused to do for fear of offending the Russians)just a week before President Putin’s first visit to

Berlin in June 2000.But the visit itself changed things dramatically.

The two men talked for five hours, without aninterpreter, thanks to Putin’s command of German.Despite Tony Blair’s attempts to ‘get in therefirst’, it was clear that Putin regarded Germany asRussia’s paramount European ally. Schröderhimself understood that close collaboration withRussia was the best means to encouragedemocratisation: ‘Russia has always beensuccessful,’ he wrote, ‘when it has opened itself upto Europe, engaged in a lively exchange and linkeditself with the economic and intellectualdevelopment in the rest of Europe.’7 The two meninitiated something unique among the Europeannations: the St Petersburg Dialogue, an annualRussian–German event which combinedintellectual discussion with intergovernmentaltalks and intensive business-to-business deal-making. Soon Schröder would be drawn intoPutin’s sauna-and-vodka circuit. They becameclose friends, often visiting each other with theirfamilies. Putin would even fly out to the

chancellor’s home town of Hanover just tocelebrate Schröder’s 60th birthday with him. Putinenabled Schröder to adopt two children from StPetersburg. After leaving office Schröder becamechairman of Nord Stream, a Gazprom affiliate thatwould bring natural gas straight from Russia toGermany (which he had supported as chancellor),and dropped all criticism of Putin’s policies.(Chirac, by contrast, turned down Putin’s offer of ahighly paid job with Gazprom.)

In an interview, Schröder looked back at hisrelationship with Putin and described him as a‘man you can trust’. ‘He was open, and in contrastto his image he has a lot of humour. He is veryfamily-oriented, and he doesn’t let down hisfriends. He’s someone I would be glad to have abeer or glass of wine with even if I didn’t have todeal with him politically.’8 Those were clearly thewords of a man who had no intention ofdisparaging a colleague who was still in office andwith whom he maintained close business andpersonal ties. But that does not make themirrelevant. On the contrary, the close relationship

between Putin and Schröder – and between Putinand Chirac – was a major factor in the early 2000sas Russia tried to position itself in the world.

With the UK balanced somewhere between the‘European’ view and the American, compromiseshad to be thrashed out – among them NATO’s twomajor decisions of 2002. In May the NATO–Russia Council was set up, bringing Russia closerto the club. But six months later, at a historicsummit in Prague, NATO invited seven formerSoviet satellites to become members of the club. Itwasn’t quite what Putin had in mind whendemanding to be treated as an equal.

NATO’s sun shines on easternEurope

The lights go down in the seventeenth-centurySpanish Hall of Prague castle. On a stage twodancers perform a hilarious piece by a Czech-bornchoreographer, Jiří Kylián, to music by Mozart.The dancers are dressed (somewhat scantily) in

period costume and wigs. In one part of theperformance they leap about like fleas, performingcrazy mating rites on a huge four-poster bed. Butthe audience is not composed of President VáclavHavel’s bohemian buddies from a Prague theatre:they are the heads of state and 700 guests fromNATO’s present and future member states – not allof them expecting such a raunchy curtain-raiser tothe alliance’s enlargement process.

The Prague summit on 21 November 2002 wasHavel’s swansong as president of the CzechRepublic. The playwright-turned-politician wantedit to be remembered both for its artistic panacheand its historic significance. He had spent most ofhis life as a dissident, stubbornly resistingcommunist rule and protesting at the Sovietoccupation of his country. His own country wasalready a member of NATO; now he wanted tocelebrate the freedom of seven more nations.

It was hard for the Russians to understand thatthis really was about celebrating freedom (fromcommunism), not threatening Russia. The foreignministry spokesman, Alexander Yakovenko, spoke

darkly about ‘the appearance of NATO’s militarypotential at Russia’s borders, just a few dozenkilometres from St Petersburg’.

The foreign minister himself, Igor Ivanov, put apositive gloss on the event: ‘Moscow no longerconsiders NATO’s eastward expansion as a threat,since the alliance has undergone a radicaltransformation since the end of the Cold War andnow concentrates on the fight against globalterrorism.’ But the Russians did not reallyunderstand why enlargement was necessary. It wasnot just that they believed that Gorbachev had beenpromised it would not happen. They also could notunderstand why, if Russia was accepted as apartner, anyone should feel they needed protectionfrom them – and they understood perfectly wellthat despite all the protestations to the contrary,NATO would defend its new members againstRussia if necessary. After the handshake of theNATO–Russia Council, Prague came as a slap inthe face.

What the Russians failed to do was make anyconnection between their policies and behaviour at

home and the way they were perceived abroad.This was a problem I had to grapple with a fewyears later when I worked as a media adviser forthe Kremlin: my clients were unable to grasp thatthe key to improving their ‘image’ abroad was notbetter PR but better behaviour. (I will look at thisin detail in Chapter 9.) My impression fromworking closely with them is that they genuinely donot comprehend why many East Europeans – andparticularly the Balts – remain deeply uneasy abouttheir big neighbour.

Naturally no one at the Prague summit spokeopenly of their fear of Russia. But you did not haveto dig very deep into history to understand itsroots. Almost all of the East European leadersattending Václav Havel’s show had personally,like him, lived through the horrors of Sovietoccupation and life in a totalitarian regime. Therewere many open sores. The Poles felt the Russiangovernment had not done enough to acknowledge(far less apologise for) the murder by Stalin’ssecret police of thousands of Polish officers andintellectuals at Katyn in 1940. The Estonians,

Latvians and Lithuanians had not just beenoccupied by the Soviet army but incorporated intothe Soviet Union, where they had had to fight fortheir survival as nations. Thousands of their peoplehad been sent to the Gulag. Their tiny republicshad been swamped with Russian citizens, whobrought with them their language and culture, and aMoscow-based Communist Party bureaucracy thatturned them into second-class citizens. NativeLatvians comprised less than half the population oftheir own capital city, Riga. There waswidespread resentment of the Russian presence,and the three Baltic nations were the first to rise upagainst Soviet rule when Gorbachev’s reformsopened the lid a little in the 1980s.

But their independence, restored in 1991, didnot put an end to all the problems. Russia came toterms politically with the situation, but more than amillion Russians lived in Estonia, Latvia andLithuania, and the Kremlin felt it had a right andduty to protect them. The new independentgovernments did themselves no favours by notalways treating their Russian minorities with much

consideration. In their hearts, most Balts felt theRussians should never have been there in the firstplace: it was they who had colonised the Balticand subjugated its people, so they had onlythemselves to blame. Language and citizenshiplaws which rendered most Russians stateless inLatvia and Estonia were criticised by theOrganisation for Security and Cooperation inEurope, and the European Union demandedchanges as a condition for the two countries’accession. Over the years since independence,Russia had kept up a litany of complaints aboutcivil rights in Latvia and Estonia (Lithuania’sRussian population was much smaller and had fewcomplaints). At times the rhetoric was very hostile,so it should have come as no surprise to theRussians that Baltic nations were welcomed withopen arms into NATO.

By common consent, it was Vaira Vīķe-Freiberga, the Latvian president, who stole theshow at the Prague summit with a powerful,eloquent speech, delivered without notes. Sheherself had not personally endured the years of

Soviet rule, as she had escaped with her parents atthe age of seven, just as the Red Army ‘liberated’her country and imposed communism there. But herwords summed up what the event was all about:

Latvia lost its independence for a very long time, andit knows the meaning both of liberty and the loss ofit. Latvia knows the meaning of security and the lossof it. And this is why being invited in an alliance thatwill ensure our security is a momentous moment thatwill be writ large in the history of our nation.

We in Latvia would like to build our future on therock of political certainty, not on the shifting sandsof indecision. We do not want to be in some sort ofgrey zone of political uncertainty, we would like toenjoy the full sunshine of the liberties and the rightsthat NATO has been defending so long. We do notwant to be left out in the outer darkness, and wewould not wish this to happen to any other nation whohas expressed the desire to join those nations thathold the same values, that follow the same ideals, andthat are ready for the same efforts and the samestrivings. Our people have been tested in the fires ofhistory, they have been tempered in the furnaces ofsuffering and injustice. They know the meaning and

the value of liberty. They know that it is worth everyeffort to support it, to maintain it, to stand for it andto fight for it.

Her audience – all male heads of state – almoststopped breathing as she spoke. AlexanderKwaśniewski, the president of Poland, recalledlater in an interview: ‘I had tears in my eyes, to tellyou the truth. It was one of those touching momentsthat showed that the Second World War was reallyover. We were starting a new era. This feeling ... Isensed it through my skin, a shiver through mybody. The Second World War was finally over inPrague, in the palace that was previously used forcommunist meetings, where Václav Havel, nowpresident, was host.’9

Everyone present felt the same. Except, perhaps,the Russian delegation, which had turned up for abrief, pro forma session of the NATO–RussiaCouncil the next morning. The foreign minister,Igor Ivanov, recalled how he tried to explain to hisWestern partners that by ensuring their own‘security’ the new NATO members were making

Russia feel less secure: ‘What was the real interestof those states in joining NATO? Yes, there was apolitical interest, but where was the threat comingfrom? One should first formulate real threats andthen think in what way one can minimise orconfront those threats.’ And he added: ‘In realitythis does not add to anyone’s security, neither toNATO countries nor to Russia. It adds an elementof distrust. You want to think about your ownsecurity, but you don’t want to think about thesecurity of Russia.’10

The Americans had an answer to suchcomplaints. This is Nick Burns:

You know, by expanding NATO, we were also callingRussia’s bluff. The Russians had been saying, sincethe fall of the Soviet Union in December 1991, thatthey were different, that they also believed thatEurope should be a place where people should befree to decide their own futures without fear ofexternal domination. By inviting those sevencountries into NATO in November 2002, we weresaying: if you choose freedom in a future democracy,we can help to guarantee that and to sustain it. The

fact that many Russians subsequently said that thiswas a treacherous move by NATO, that this was anindication of bad faith by NATO, I think tells youeverything you need to know about those Russianleaders – that they didn’t believe in the promise ofdemocracy.

The Russians don’t, in the modern world, in the post-Soviet world, in the post-1991 world, the Russiansdon’t have a right to decide other people’s futures.They don’t have a right to impose their empire onother peoples in what they call their near abroad. Andif we had the strength, as we did, to see that otherpeoples could be free and democratic, it wascertainly the right thing to do to help them achievethat freedom.11

The ability of the Russians and Americans totalk at cross purposes was astounding. TheRussians could not understand why their ownbehaviour at home meant that their neighbourscontinued to fear them. The Americans and theirallies could not see that the Russians were upset bybeing cast in the role of potential aggressor.NATO’s two summits in 2002 were hailed as

ending the Cold War. In fact they helped to blowon its embers and start a new one. Seen fromMoscow, the old Iron Curtain, running through thecentre of Europe, was being replaced with a newone, much closer to home.

Putin’s tongue lets him downagain

In his state-of-the-nation speech in the spring,President Putin spoke as if he was already wherehe wanted to be – accepted as a respected voice onthe world stage, and virtually claiming jointleadership of the war on terror. ‘Russia is todayone of the most reliable guarantors of internationalstability,’ he said. It was ‘precisely Russia’sprincipled position’ that had allowed a durableanti-terrorist coalition to be created. By jointefforts, he said, ‘we’ liquidated the mostdangerous centre of international terrorism inAfghanistan.

He then went on to talk of Russia’s ‘numerous

concrete steps towards integration with Europe’and his goal of forming a ‘single economic space’with the European Union.

Fine words, but as so often with Vladimir Putin,he then blew it. On a trip to Brussels for a summitmeeting with EU leaders in November 2002, helapsed into the kind of language that labelled himnot as a world statesman but as a bar-room thug. Ata press conference a French journalist asked him adirect but not particularly offensive question aboutChechnya: why was Russia using anti-personnelmines and shells that were killing hundreds ofpeople? And did the president not think that bytrying to wipe out terrorism in this way he waswiping out the population of Chechnya?

Perhaps the poor Le Monde correspondent didnot know that this was Putin’s rawest nerve. Bymerely asking such a question, he was in Putin’seyes a terrorist sympathiser. ‘If you’re so keen tobe an Islamic radical,’ he railed at the journalist,‘and are happy to be circumcised, then I invite youto Moscow. We are a multi-faith country and havespecialists for this. And I’ll recommend they do the

operation so thoroughly that you have nothing leftto grow back.’

This happened just one week before the Praguesummit – a handy reminder to NATO’s old andnew members that Putin, perhaps, was not quiteready to join the civilised world.

Allies against the Iraq warHad President Putin deployed such crude languagewith regard to the Iraqi dictator Saddam Husseinhe might have earned a wry smile and some kudosin Washington. But the growing confrontation withIraq was to drive another wedge between Russiaand America, and demonstrate that, when it cameto pursuing its foreign policy goals, Washingtonscarcely pretended that Russia was a superpowerthat mattered: certainly they would court Putin totry to get his backing, but if they failed it would nothold them back. The Bush administration was nomore interested in taking Russia’s advice on Iraqthan Clinton had been on Yugoslavia.

The Iraq crisis had been deepening throughout

2002, as suspicions grew that Saddam Husseinwas continuing to produce and store weapons ofmass destruction, in defiance of United NationsSecurity Council resolutions. A new resolution,number 1441, passed on 8 November 2002 aftertwo months of tough negotiations, gave Iraq a ‘finalopportunity’ to disarm or face ‘seriousconsequences’. Weapons inspectors returned toIraq in late November. Over the coming monthsthey discovered no banned weapons, but Iraqfailed to prove they had destroyed stockpiles thathad previously been documented. The diplomaticconfrontation that now developed centred on twothings: whether the weapons inspectors should begiven longer to complete their task (as the chiefinspector, Hans Blix, wished), and what to do next– given that Resolution 1441 did not authorise theuse of force. It pitted the US and the UK, broadlyspeaking, against Russia, France and Germany.Since Russia and France were permanent membersof the Security Council with the power of veto, itwas clear that the US and Britain would not beable to push through a second resolution,

authorising military action. The Americansdisdainfully referred to the Putin–Schröder–Chiracalliance as the ‘axis of weasels’ – an ironicreference to Bush’s ‘axis of evil’ (Iraq, Iran andNorth Korea). US defence secretary DonaldRumsfeld inadvertently alienated France andGermany still further when he referred to themdisparagingly as ‘Old Europe’, as opposed to themore obliging ex-communist countries to the east –‘New Europe’ – which by and large supported theAmerican position.

Putin was implacably opposed to Americanplans to invade Iraq, for many reasons. Russia hadmajor business interests there; it worried that oilprices could slump if Iraqi oil flooded the marketafter the war; it bristled at what it saw as USunilateralism, overriding international decisions; itopposed the hidden agenda of regime change; it feltUN weapons inspectors should be allowed tocontinue their work searching for weapons of massdestruction; and it wanted to exhaust all of its owndiplomatic avenues to persuade Saddam Husseinto back down or resign from office. Putin was fully

signed up to the war on terror, but unlike Bush hedid not regard Iraq as a state that sponsoredterrorism.

The Russians were dismissive of theunconvincing presentation given by Secretary ofState Colin Powell to the Security Council on 5February 2003, purporting to prove the existenceof weapons of mass destruction in Iraq. ‘We wereshown photos taken from space,’ Sergei Ivanovrecalls, ‘huge trucks, juggernauts, carryingchemical weapons. They said that it was reliableevidence. We said, “Well, maybe you have thisintelligence, but we don’t.” ’12

Putin was not, however, initially inclined tospoil his budding relationship with George W.Bush by making a public stand. At first he stuck inhis public pronouncements to a position of guardedsupport for American efforts to ensure Saddam’sdisarmament. He told French journalists: ‘The onlytask facing the international community there is tosatisfy itself that Iraq has no weapons of massdestruction or to find them and force Iraq todestroy those weapons. In this connection we share

the position of our American partners which is thatwe must do everything in order that Iraq wouldengage in a full-fledged cooperation with the UNinspectors.’

When he travelled to Berlin on 9 February for ashort meeting with Chancellor Schröder, Putinwarned that the ‘unilateral use of force against Iraqwould only bring suffering to millions of peopleand further escalate tensions in the region’. But healso cautioned against stoking up anti-Americansentiments.

His line became much tougher when he movedon the next day to Paris for a state visit, duringwhich the three leaders issued a joint declarationcondemning the use of force. The tripartitedeclaration was a French–German initiative.Schröder and Chirac had forged a very closerelationship, which had culminated just theprevious month in celebrations at Versailles tomark the 40th anniversary of the historic Elyséetreaty of friendship between the two countries.According to Chirac’s adviser, MauriceGourdault-Montagne (known in diplomatic circles

as ‘MGM’), ‘we were close allies of the Germansand knew they shared the same assessment of theIraq situation, but we didn’t know about the otherpermanent members of the Security Council. TheBritish were with the Americans, but what wouldthe Russians and Chinese do? So it was utterlyimportant for us to know what the Russians woulddo.’ He says that until they met, neither Putin norChirac felt absolutely sure that the other would beprepared to veto a second resolution, and neitherwanted to end up doing it alone. Germany, as anon-permanent member of the Security Council,had a vote but no power of veto, so Schröder wasrelying on Chirac to cast the veto on his behalf –and to get Putin on board too.13

MGM and his German counterpart drafted ajoint statement and agreed that Chirac would try toget Putin to sign up when he arrived in Paris fromBerlin. The French laid on a lavish reception forhim at Charles de Gaulle airport – military band,red carpet, guard of honour provided by the threeservices and the National Guard. Chirac even wentto the steps of the plane to greet Putin and

presented him with an imposing bouquet offlowers. MGM says it was all designed to flatterthe Russian: ‘He wanted to show respect to Putin,to please him, and for the Russians to feel that theyare a great country, and that they are a full partnerin the international community.’ Flying into the cityon an air force helicopter, Chirac showed Putin thetext of the declaration, and he said yes right away,asking only for a few small changes. MGM andPutin’s diplomatic adviser, Sergei Prikhodko, wentoff to make the changes and agree them withBerlin. The declaration said: ‘There is still analternative to war. The use of force can only beconsidered as a last resort. Russia, Germany andFrance are determined to ensure that everythingpossible is done to disarm Iraq peacefully.’

But in essence, says Gourdault-Montagne, it wasa ‘pact’: ‘Putin, until that moment, had some doubtsabout France, because at that time there was a lotof talk to the effect that the French are showingtheir muscles, but at the last moment they willchange their minds and go with the US. Now Putinknew that Chirac would impose a veto, and we

knew the Russians would be with us. We knew thatwe were together.’

And Washington knew that if it went to waragainst Iraq it would have to be without theauthorisation of the United Nations. CondoleezzaRice admits: ‘We didn’t much like this spectacleof America’s closest allies standing with theRussians on a security interest of the UnitedStates.’14

In the month before the war started, Putinundertook two rounds of secret diplomacy to try toavert it. On 22 February he sent one of Russia’smost experienced politicians, Yevgeny Primakov,to Baghdad. Primakov for some reason oftenattracts the epithet ‘wily’, and perhaps he is: hehad opposed Putin’s rise in 1999 but latersupported him; before that he had served as headof the foreign intelligence service, foreign ministerand prime minister; most importantly, a MiddleEast expert, he had known Saddam Hussein foryears, so he was ideal for this mission. At the time,when news of his trip leaked out, there wasspeculation that he might have been trying to

persuade Saddam to destroy his Al Samoud 2missiles. The foreign ministry, forced to saysomething, said his purpose was to ‘explainRussia’s position on Iraq and receive an assuranceit would fulfil UN resolutions and cooperate“completely and unconditionally” with weaponsinspectors’.

In fact, his mission was much more dramaticthan that. Putin had charged him with only one task:to persuade Saddam to stand down and therebysave his country from invasion. Saddam listened toPrimakov, took notes, asked him to repeat themessage in front of his deputy prime minister,Tariq Aziz, then stood up, pressed his hand onPrimakov’s shoulder and left.

Primakov flew back to Moscow and reportedthe bad news – first to Putin, then to a full meetingof the Security Council in the Kremlin. They hadone last trick up their sleeves. It was agreed thatPutin’s chief of staff, Alexander Voloshin, shouldfly immediately to Washington to try one last timeto talk the Americans out of their plan for war.

He arrived late at night and went to a restaurant

with the Russian ambassador, Yuri Ushakov. Theydrank into the small hours, and then Voloshinsuddenly got a call to meet the CIA director,George Tenet, at 8.15. ‘I’d only just got to bed,’ herecalled later, with a smile. From the CIA he wastaken to the White House to meet CondoleezzaRice, and during their conversation President Bush‘dropped by’ (the only way diplomatic protocolallowed the president to meet someone ofVoloshin’s rank). ‘He made a ten-minute speechabout the threat of international terrorism,’ saysVoloshin. ‘He was very passionate, standing uprather than sitting. Then pleasantries. Twentyminutes in all. I told him we didn’t agree, but I felthe was not interested in my answers. He had madeup his mind already so he wasn’t much worriedabout the arguments – only in whether we wouldsupport him.’ An American official confirms that‘the president wasn’t there to listen to whatVoloshin had to say and reply’.

Voloshin was granted access to every topofficial – Vice-President Cheney, Secretary ofState Powell, the Senate leader. But it was his

meeting with commerce secretary Donald Evansthat astonished him most. Evans asked if they couldspeak privately, and they went to his office. Evanssaid: ‘You are close to Putin, I am close toPresident Bush, and he has asked me to put it toyou – what do you want in exchange for supportingus?’

Voloshin understood that they were offering abribe: Russia stood to lose billions of dollars’worth of contracts in Iraq, and Washington wasoffering to compensate. ‘We don’t want tobargain,’ Voloshin said. ‘This is a bad war whichwill harm everyone. And Iraq has nothing to dowith terrorism.’

In a final, rather pathetic, move the Americanstried to prove to Voloshin that there was aconnection between Saddam and Chechnya. AnAmerican official recalled in an interview: ‘Wethought this would be an issue that would catch theRussians’ attention, but Voloshin came out at theend saying, “That was totally uninteresting, there isnothing new in this presentation.” ’

Voloshin confirms: ‘They told me a long,

touching story about a terrorist who fought inChechnya and later turned up in Iraq. It was prettyprimitive, but they tried it on.’

Even scratching Putin’s rawest itch achievednothing. The two sides were poles apart.Operation Shock and Awe began on 19 March.

Putin snubbedFor Putin, Iraq was not the be all and end all.There were still important prizes to aim for: thecancellation of America’s missile defence plans,WTO membership, increased trade, and so on. Hedecided not to let his failure stand in the way of hisfriendship with Bush.

Another opportunity was coming to impress theworld with his openness and ‘Europeanness’. Atthe end of May, his home town of St Petersburg –built by Peter the Great as Russia’s ‘Window onthe West’ – would celebrate its 300th anniversary.No wall was left unpainted, no stucco ornamentungilded, as the city was refurbished for a longweekend of partying, to which every major leader

was invited. Putin planned to bask in the glory ofSt Petersburg’s Italianate avenues and palaces.

On the Friday he opened a Baltic youth festival,hosted a summit of Asian leaders on board a rivership, and took the leaders of Germany, Britain,France, Canada and Austria on personal guidedtours of the city. In the evening the MariinskyTheatre had never seen so many world leaders atone time. Next day he had talks with morepresidents, and a summit with the entire EuropeanUnion leadership. The world’s elite toured theHermitage art gallery, and attended a waterfestival on the Neva river.

And then, finally, on the second evening, GeorgeW. Bush turned up for the last supper. He haddecided to visit Poland first – New Europe, acountry that had contributed to the Iraq war. Putinwas insulted.

Maurice Gourdault-Montagne caught the Russianmood. ‘I think it was a tremendous disappointmentfor the Russians. It was surprising that Condi[Rice], with whom I have a good relationship andwho is supposed to know what is in the Russian

brain, gave Bush this terrible advice to go toWarsaw prior to St Petersburg. I just couldn’tunderstand it.’

MGM then heard Putin and Chirac inconversation, and registered that the love affairwith America was over. Putin was saying toChirac: ‘My priorities were the following: first arelationship with America, second with China,third with Europe. Now it is the other way around– first Europe, then China, then America.’

May 2002 had witnessed the triumphant signingof the Moscow treaty on nuclear arms reductionand the creation in Rome of the NATO–RussiaCouncil. One year later, the mood had changed.And things were about to get even worse.

6

PUTIN MARK II

Georgia looks WestOn the evening of Saturday 22 November 2003Russia’s leaders retired after their regular SecurityCouncil meeting to Genatsvale, one of the bestGeorgian restaurants in central Moscow. The solidoak table was laden with appetisers – hotkhachapuri cheese bread, pots of red and greenlobio beans, aubergine and walnut rolls, chickentsatsivi ... Smoke from the logs burning in thehearth curled under the wooden rafters, and vineswere growing on the timber walls. Waiters

hovered with Russian vodka and Georgian wine,serving Russia’s power elite: President Putin,Prime Minister Kasyanov, chief of staffMedvedev, security council secretary Rushailo,foreign minister Igor Ivanov, defence ministerSergei Ivanov, and FSB chief Patrushev.

The choice of venue had been influenced by theleadership’s discussions earlier in the day aboutevents unfolding in the Georgian capital, Tbilisi.For three weeks President Eduard Shevardnadze –the former Soviet foreign minister – had beenfacing down growing protests in the streetsfollowing parliamentary elections that everyonebelieved were fraudulent. Shevardnadze himselfwas due to rule as president for a further twoyears, but there was widespread dissatisfaction atthe corruption and misrule of his government.Opposition leaders were demanding hisresignation. Putin was no big fan of Shevardnadze,holding him partly responsible for the collapse ofthe USSR, but he did not like the idea of unrulycrowds trying to seize power in a country onRussia’s border. He was aware, too, that the

student protests, under the slogan ‘Kmara’(Enough) were modelled on the movement that hadbrought down Serbia’s president, SlobodanMilosevic, in 2000, and were supported byAmerican democracy groups, including the OpenSociety Institute of the billionaire philanthropistGeorge Soros, and the National DemocraticInstitute, an organisation dedicated to thestrengthening of democracy around the world (thekind of democracy Putin feared).

Suddenly an aide asked Putin to take a call on asecure telephone. It was Shevardnadze. Earlier thatSaturday events had finally spun out of his control.He had gone to the parliament, determined toconvene it and thereby legitimise the electionresults, but the main opposition leader, MikheilSaakashvili, told a huge rally in the main square:‘We have only one aim – to rid the country of thisman (Shevardnadze).’ Mayhem broke out as theopposition leaders swept into the debatingchamber, each carrying a rose, and Shevardnadzewas hustled out to safety by his bodyguards. Thespeaker of parliament, Nino Burjanadze, declared

that she was assuming presidential powers. It wasthe start of what became known as the RoseRevolution – the first of the so-called ‘colouredrevolutions’ that brought democracy to countrieson Russia’s borders, revolutions that Putin came toregard as a threat to Russia itself. Shevardnadzeretreated to his residence and declared a state ofemergency. And then he called Putin.

Back in the 1970s, when he was Georgia’sCommunist Party leader, Shevardnadze hadnotoriously affirmed his republic’s subservientposition to Russia in the USSR by saying: ‘For usin Georgia the sun rises in the north.’ Now, as hedesperately tried to cling to power in theindependent state of Georgia, he effectivelyconfirmed that little had changed, by turning toPutin for help. To the group seated around the tablein Genatsvale it was obvious which of them shouldbe dispatched to Tbilisi. Igor Ivanov, the foreignminister, had a Georgian mother and even knew asmattering of the language. He also knewShevardnadze from the 1980s, when he hadworked as his adviser in the foreign ministry. Putin

sent him straight to the airport, with a posse ofsecurity guards and clear instructions to dowhatever he could to avoid bloodshed in thestreets of Tbilisi and ensure things were done inaccordance with the Georgian constitution (whicheffectively meant: don’t let a mob overthrow thepresident).

‘You know,’ Ivanov said in an interview, ‘wedidn’t always have very easy relations withShevardnadze, but Putin was nonetheless quiteclear – he was the legal, legitimately electedpresident, and we must help him.’1

Ivanov flew into Tbilisi after midnight and had ameeting scheduled with Shevardnadze in themorning. But before then he wanted to test themood, so he took two bodyguards and set off towhere the protesters were camped out in the citycentre. He picked his way among the tents andcampfires trying to gauge how explosive theatmosphere was. ‘I don’t really understandGeorgian,’ he told us, ‘but you could get a sense ofthe place.’

Suddenly somebody recognised him, and a buzz

spread through the square: ‘Ivanov is here, Ivanovis here!’ The word quickly reached the ears ofZurab Zhvania, a popular politician and formerspeaker of parliament, who, together withSaakashvili and Burjanadze, was one of theleaders of the Rose Revolution. By now the crowdwas becoming restless, and Zhvania urged Ivanovto get up on to the podium and address them.Ivanov recalled: ‘I asked him how to say inGeorgian, “Long live friendship between Russiaand Georgia.” I repeated that a few times into themicrophone, and it seemed to go down well! I gotthe feeling that the people felt Russia could helpsomehow in resolving this conflict.’

Nino Burjanadze, the speaker of parliament andsince the previous afternoon self-proclaimedacting president, was in her office. ‘Zhvania andSaakashvili and I had been working till about fourin the morning,’ she recalled later, ‘and now I wasdozing in my armchair, when my secretary came inand said: “Ivanov is addressing the crowd.” Ithought I was dreaming! But I went downstairs, andsure enough there he was, even saying something to

them in Georgian!’2

Ivanov now ended up in the role of mediator,shuttling between the opposition and PresidentShevardnadze. In the small hours of the morning heheld talks with Saakashvili, Zhvania andBurjanadze to find out exactly what their demandswere. Retelling these events, Ivanov insisted that atno stage did anyone insist on Shevardnadze’sresignation; rather it was a question of re-runningthe parliamentary election that the opposition knewhad been stolen from them. Ivanov spent the rest ofthe night consulting Georgian friends anddiplomats, and came to the conclusion that ‘thependulum was swinging in the direction of theopposition’.

That was the message he took to PresidentShevardnadze in the morning. ‘I had known himsince 1985, and felt I could say to him quite openlythat I had met all these people, in the oppositionand in his own entourage, and sensed that he hadlost almost all support.’ Ivanov felt that he failedto convince Shevardnadze that he was so isolated,but he did persuade him to meet the opposition

leaders.Ivanov finally brought Zhvania and Saakashvili

to Shevardnadze’s residence for talks in theafternoon of the 23rd. At this point he felt he haddone all that was required of him. ‘I sat down atthe table. Shevardnadze and his assistant were onone side; Zhvania and Saakashvili were on theother. I said: “I think I have done what I came todo. President Putin asked me to help you find apolitical solution. That’s up to you now – to holdtalks and avoid bloodshed. So I will leave younow.” ’

Thereupon Ivanov left the residence and flew tothe city of Batumi in western Georgia, where hewas due to meet the local leader, Aslan Abashidze.The outcome he expected from the talks he hadarranged in Tbilisi was an agreement to re-run theelections, with Shevardnadze staying on aspresident, at least for the moment. But when he gotoff the plane in Batumi, Abashidze greeted himwith the words: ‘What on earth have you done?Shevardnadze has resigned!’

Looking back, Ivanov now laughs wryly at how

he inadvertently brought about the end ofShevardnadze’s rule, without ever understandinghow it happened. Of the triumvirate who led theRose Revolution, he speaks most warmly of ZurabZhvania, describing him as ‘wise, calm, balanced,and intent on having good relations with Russia’ –more or less the opposite of what he says aboutMikheil Saakashvili, the man whose charismamade him the pre-eminent leader of the opposition.‘Misha’, as he was universally known, was a big,ebullient bear of a man – Westernised in mentality(he had studied in Strasbourg and New York, andhad a Dutch wife), but at the same time oozingGeorgian charm and spontaneity. Aged only 36, heswept to victory in the early presidential electionheld on 4 January 2004. Taking 96 per cent of thevote, Saakashvili embodied the hopes not only ofthe thousands of demonstrators who had backed theRose Revolution but of the vast majority ofGeorgians, who saw the ballot as an opportunityfinally to turf out the corrupt Soviet-era regime andorientate their country towards the West anddemocracy.

I interviewed Saakashvili a year or so later,when his pro-Western policies were alreadyraising hackles in Moscow, and reminded him ofhis predecessor’s famous phrase about the ‘sunrising in the north’. Was he not afraid of provokingthe Russian bear, I asked? ‘Don’t worry,’ he toldme. ‘I also know where the sun rises. We want thebest relations with the West and with our greatneighbour to the north.’3

In fact, Saakashvili’s first moves as presidentwere uncannily like Putin’s at the start of his rule.He immediately pushed through constitutionalamendments that increased his presidentialpowers, while drastically reducing the role ofparliament. He replaced regional governors andbegan to impose state control over televisionstations.4 In a crackdown on corruption he hadformer ministers and businessmen arrested, and(unlike in Russia) carried out a radical overhaul ofthe police which dramatically reduced bribe-taking. He and his prime minister, Zurab Zhvania,transformed the economy by, among other things,slashing taxes and attracting major foreign

investments.Like Russia, Georgia also faced the threat of

separatism. After the country gained independencefrom the USSR in 1991, the provinces of Abkhaziaand South Ossetia both broke away and after briefcivil wars enjoyed de facto independence – withRussian support. A third ‘autonomous republic’,Ajaria, did not declare independence but wasruled like a personal fiefdom by its autocraticpresident, Aslan Abashidze. Regaining controlover Georgia’s lost provinces was as much of anobsession for Saakashvili as retaking Chechnyawas for Putin. On the eve of his inauguration aspresident on 24 January 2004 Saakashvilisolemnly swore on the grave of Georgia’s twelfth-century King David the Builder that, ‘Georgia willbe united and strong, will restore its wholenessand become a united, strong state.’

It was that resolve, that determination toreintegrate Georgia’s minority nationalities, thatfour years later would bring his country to warwith Russia.

Saakashvili also flaunted his love affair with the

West like a reckless divorcee, thumbing her noseat the bullying ex-husband. The US secretary ofstate, Colin Powell, was guest of honour atSaakashvili’s inauguration ceremony. He recalls:‘We all stood up when the national anthem wasplayed. And when it was over I was about to sitdown again when another anthem started up – itwas “Ode to Joy” and the European Union flagwas being raised. I thought: oh boy, I bet Igor[Ivanov, the Russian foreign minister] isn’tenjoying this part of the performance.’5

Igor certainly would not have enjoyed whatfollowed. Saakashvili invited Powell to come withhim into the City Hall, which was decorated withdozens of Georgian and American flags, side byside. ‘Then we went into the chamber where thecity legislature meets,’ Powell remembers, ‘andwe sat behind a table in front of all these people ...and we had a town hall meeting with the wholepopulation, televised throughout Georgia. JustPresident Saakashvili and the American secretaryof state, while all the other guests and seniorpeople from around the world, including those

from the Russian Federation, were outsidewondering what’s going on.’

Saakashvili did have the prudence to head north,not west, though, for his first presidential visitabroad. And remarkably, his trip to Moscow on10–11 February 2004 was a great success. IgorIvanov was present when the two presidents met inthe Kremlin, and recalls that – considering thehatred the men would later develop for one another– the mood was very positive: ‘Saakashviligreeted Putin very emotionally, very joyfully, andsaid that he greatly respected him as a politicianand had always dreamed of being like him. He saidhe would do everything in his power to developgood relations between our countries, and that theprevious leadership of Georgia had made manymistakes which he would try to put right.’

Saakashvili’s own foreign minister, TedoJaparidze, confirmed that the Georgian presidentemerged from the meeting almost bewitched byPutin: ‘He came out of it very much excited andthrilled with that encounter and with the manhimself: “He’s a real leader, a resolute and strong

man who controls everything – Duma, the massmedia and so forth.” These were his first wordswhen we were driving back to the airport.’6

Saakashvili himself described in an interviewwhat happened when the presidents left theirforeign ministers and retreated to a separate roomfor private talks. Having proposed that they takeoff their jackets and ties, Putin apparently launchedinto a tirade about the subject that worried himmost – Georgia falling into the all too warmembrace of the United States. It was not justAmerican involvement in supporting – or, as theRussians firmly believed, planning – the RoseRevolution that concerned Putin. The US had alsohad a small military presence in Georgia for twoyears. Ironically the American troops had beeninvited in by the previous president, Shevardnadze,to help him deal with a problem that was spoilinghis relations with Russia. After Putin had launchedthe second Chechen war at the end of 1999,thousands of Chechens, including armed militants(and foreign Islamist fighters), had moved over themountains from Chechnya into Georgia and settled

there in the Pankisi Gorge. Russia claimed thegorge was being used as a terrorist base andthreatened to bomb it. Alarmed at the prospect ofRussia attacking Georgia, Washington offeredinstead to help the Georgians themselves clearterrorists from the Pankisi Gorge by training theirarmed forces. Launched in May 2002, the GeorgiaTrain and Equip Programme involved only acouple of hundred American soldiers at first, but itgave the US its first foothold in the Caucasus.Attending Saakashvili’s inauguration two yearslater, Colin Powell remarked upon the marchingstyles on show in the military parade: ‘I was justfascinated to sit there and watch some Georgiantroops march by, marching like Soviet troops, theway they had been trained, and then the nextcontingent go by marching like American soldiers– 120 steps per minute just the way we teach oursoldiers. And I said, times they are a changing.’

So it was not surprising that Putin’s toughestmessage for the new Georgian president was tocool it on the American front. According toSaakashvili, Putin stressed on the one hand that

Russia was a friend of America and developingrelations with it, but on the other hand claimed thatEastern European countries had become ‘slaves toAmerica’, doing whatever ‘some second secretary’at the US embassy told them to do. ‘Basically, itwas all about America, a 20–25 minute tirade,until I finally politely stopped him and said, “Look,it’s very good you’re telling me about yourrelations with America, but I’m not here to talkabout America.” I said, “Do you really believe thatwhat happened in Georgia is an American plot?Do you really believe that our government is paidby Americans, or George Soros or, you know, thatwe are directed by them?” And he said, “No, no.Not you for sure. But some people in yourgovernment might be in that position, to be closelyworking with the Americans.” ’7

(In fact, Putin was almost certainly aware thatSaakashvili’s senior adviser was an American,Daniel Kunin, who previously worked for theNational Democratic Institute and was paid not bythe Georgian government but by the American,through the US Agency for International

Development. Kunin was the first port of call forWashington officials trying to contact – andinfluence – the Georgian leader.8)

Saakashvili says he proposed they should startfrom a clean sheet – that as a small countryGeorgia would do whatever it could toaccommodate Russia’s interests, in exchange forsome understanding of its own, much smallerinterests. He says Putin seemed very receptive.‘Actually I liked him. I cannot blame George Bushfor looking into his soul because my firstimpression was that I liked him. I thought, well,yeah, he comes from this KGB kind of background,he is very different from what I come from andwhat I believe in, but this seems to be a pragmaticguy. He likes his own country, and maybe hewould act on behalf of his county in a verypragmatic way and we can find someunderstanding. And you know, he was basicallyalso trying to show, by the end of our conversation,that he could go a long way to solving someissues.’

The good rapport led to regular telephone calls

and genuine efforts on both sides to mend fences.But it was never going to be easy for Saakashvilito balance his desire for good relations withMoscow with his two major obsessions – restoringthe territorial integrity of Georgia (ending the defacto independence of three provinces with closeties to Russia) and tethering his country to theWest’s great alliances, NATO and the EuropeanUnion.

On 25 February 2004 Saakashvili made his firsttrip as president to the United States, andimmediately raised the issue of Georgianmembership of NATO. He announced a new five-year deal under which US army instructors wouldtrain thousands more Georgian troops.

The honeymoon with Moscow lasted until May2004, when Putin did what he called his ‘lastfavour’ for Saakashvili. The new Georgiangovernment was close to civil war with theprovince of Ajaria – under its maverick Soviet-eraleader, Aslan Abashidze. Saakashvili did what hispredecessor Shevardnadze had done: he calledPutin for help. And once again, Putin dispatched

Igor Ivanov – now no longer foreign minister butsecretary of the National Security Council – to thescene. Ivanov flew first to the Ajarian capital,Batumi, planning to negotiate with Abashidze andthen fly on to Tbilisi. But as they had dinner thatevening of 5 May, Ivanov recalls, news came of aGeorgian armoured column heading for Batumi.Despite his call to the Georgian prime minister,requesting him to stop the advance, a fierce fire-fight soon broke out, right on the outskirts of thecity. ‘It was so intensive we felt the smell ofpowder in the palace.’ According to Ivanov,Abashidze told him he had sufficient militarypower of his own to confront the Georgian troopsand force them out of the region, but Ivanovreplied: ‘I have a plane at the airport. If you areprepared to leave with me to Moscow, you arewelcome to take this opportunity.’ Abashidzeseized the chance of political asylum in Russia,and fled, taking his son, who was the mayor ofBatumi, with him.

Within hours Saakashvili’s troops entered thecity, and Ajaria was reclaimed as part of Georgia.

The next day, Saakashvili himself made atriumphant appearance in Batumi and addressed ajubilant crowd in the city square: ‘You are heroicpeople,’ he told them. ‘You have achieved yourGeorgia. We have shown the world we are a greatpeople. Only we could have staged two bloodlessrevolutions in six months.’ Surrounded by jubilantsupporters chanting ‘Misha! Misha!’, he walked tothe Black Sea beach – out of bounds to Georgia’sleaders for many years – and splashed seawater onhis face. And he uttered the promise, or threat, thatthe restoration of central control over Ajaria wasonly the start of his mission: ‘We must startnegotiations, serious and peaceful negotiationswith Abkhazia and South Ossetia, about reunitingthe country and settling problems which are notsettled. We have proved in Ajaria that it ispossible to act peacefully but resolutely. Thismeans that Georgia will be strong and we willdefinitely get to Sukhumi [the capital of Abkhazia].Exactly when? We shall see.’

Aware of Moscow’s crucial role in defusing thecrisis and getting rid of Abashidze, Saakashvili

telephoned Putin to thank him. According to theGeorgian, Putin gave a tart reply: ‘OK, MikheilMikheilovich, we helped you on this one, butremember very well, there will be no more freegifts offered to you, on South Ossetia andAbkhazia.’ Russia had much deeper interests inGeorgia’s two breakaway territories than inAjaria. Abkhazia is a republic of some 200,000people (the figure is disputed) – less than half itspre-1992 population, since almost all theGeorgians fled in the civil war. Its Black Seacoastal towns – Sukhumi, Gagra, Pitsunda – usedto be principal holiday resorts for Russians duringthe Soviet period. South Ossetia is much smaller –less than 100,000 in Soviet days (roughly two-thirds Ossetian, and one-third Georgian), and onlysome 70,000 following the civil war of the early1990s. The majority Ossetians had close links totheir kinsfolk living in North Ossetia (a republicinside the Russian Federation). Both the Abkhazand the South Ossetians looked to Russia forprotection against the Georgians, and receivedlarge subsidies and other support. Since most of

them did not have, and did not want to have,Georgian citizenship, Putin introduced a policy of‘passportisation’ – issuing residents of the twoprovinces with Russian passports, which thenallowed the Kremlin to claim the right to protectits citizens. In both republics ethnic Russians heldimportant jobs, and in South Ossetia former KGBofficers were brought in to staff key governmentposts.

If Putin’s words about ‘no more favours’ weremeant as a warning – and they certainly were –Saakashvili paid little heed. Perhaps he evenmisunderstood a hint that Putin is said to havegiven during their first meeting in the Kremlin, tothe effect that he was prepared to do a deal overSouth Ossetia that would see it restored toGeorgian sovereignty. In May, Giorgi Khaindrava,a film director whom Saakashvili appointed as hisconflict resolution minister, saw maps hanging inthe deputy security minister’s office showing plansfor a military attack on South Ossetia. As he toldthe Caucasus expert Thomas de Waal, ‘All thedays were mapped out – they wanted to do an

exact copy of what they had done in Ajaria.’9 On26 May 2004, Georgia’s Independence Day,Saakashvili held a huge military parade in Tbilisiat which he addressed the Abkhaz and SouthOssetians in their own languages, urgingreintegration with Georgia. The South Ossetianpresident, Eduard Kokoity, a onetime wrestler andbusinessman with strong links to Russia, recalledin an interview that Saakashvili’s call forreintegration sent an unambiguous message: ‘I wantto emphasise that he did it in front of a column oftanks moving down Rustaveli Avenue. It was not acall but a threat for Ossetians. And everyone inOssetia regarded this call as a threat.’10

Five days later Saakashvili moved troops to theSouth Ossetian border to launch a massive ‘anti-smuggling’ operation. Ostensibly, the aim was toclose down a huge market at the village of Ergneti,through which vast quantities of goods passedillegally between Russia, South Ossetia andGeorgia. The Georgian attack caused the worstfighting in the region since 1992. Perhaps the realaim was to trigger the collapse of the South

Ossetian government, but it had the opposite effect.Kokoity’s position was strengthened, and anti-Georgian attitudes hardened among ordinary SouthOssetians, for whom the Ergneti market hadprovided their only source of income.

With the Russian ministry of foreign affairsissuing a warning that ‘provocative steps’ mightlead to ‘extremely negative consequences’,Saakashvili headed to Washington for help. Butthere too, his actions were seen as impulsive anddangerous. The secretary of state, Colin Powell,recalled: ‘I think the president over-reached tooearly. I had to make clear to him that, “You mightthink this is in your vital national interest – we’renot so sure it is. But it isn’t in our vital nationalinterest. So don’t get yourself into a situation thatmay overwhelm you and think we are going to racein to rescue you from any difficulties you get into.So be careful.” ’

Saakashvili took note, and in August Georgiantroops were withdrawn.

Election nightThroughout history, Moscow has been afflicted byfires. The original wooden structures of theKremlin – the fortress at the heart of the capital –burned down time after time. In the sixteenthcentury Tatar invaders torched the city. In 1812, asNapoleon’s Grande Armée entered Moscow, agreat conflagration destroyed almost everything,leading to the city being rebuilt virtually fromscratch.

On the evening of Sunday 14 March 2004, theManezh exhibition hall, the former tsarist ridingschool which stands right next to the Kremlin,caught fire in unexplained circumstances andblazed for hours into the dark night sky.11 VladimirPutin climbed to a vantage point inside theKremlin’s dark red walls and observed the scene.Television pictures showed him staring out at theinferno, then turning and walking away, with a lookof apprehension in his eyes. Perhaps he saw it assome of kind of omen. It was election day. Pollingstations had closed just a few hours earlier, and he

had been chosen as Russia’s president for a secondfour-year term, with 71 per cent of the vote.Napoleon had seen his prize burn down before hiseyes. Would Putin’s vision also be destroyed byforeigners, encroaching on Russia with their alienconcepts of democracy?

I have no idea whether such thoughts really ranthrough the president’s mind at that moment. Butevents a few months later in the south of Russiawould show that Vladimir Putin, the strongman,was haunted by almost paranoid illusions ofweakness and external danger. Another bloodyterrorist attack, which ended with the deaths ofhundreds of children in a school, apparently servedas proof for Putin that his grip on the country wastoo feeble, and that Russia was an emasculatedrump state surrounded by enemies. Cornered, hewould lash out to prove his strength. Putin Mark IIwould be an angry phoenix, born in fire.

Beslan and the ‘constitutionalcoup’

The tragedy began on 1 September, the dayRussian children traditionally return to school afterthe summer holidays. In Beslan, a small town of36,000 people, just north of the Caucasusmountains and less than an hour’s drive west ofChechnya, children turned up at school No. 1 incheerful mood and fresh uniforms. Just after 9o’clock, as they held a ceremony with their parentsin the schoolyard, a group of armed fightersscreeched up to the school in an army truck, firingtheir guns into the air, and herded more than 1,100people – children, parents and teachers – into theschool building. It was a repeat of the Moscowtheatre tragedy – except that the terrorists hadlearned lessons that made it even harder for theauthorities to deal with the crisis. The hostage-takers had planned the attack meticulously andknew every inch of the school. A dozen hostageswere shot within the first hours, and over the nextthree days the country watched horrific eventsunfold, as the gunmen laid trip-wires andexplosives around the school and refused to allowfood, water or medicine to be brought into the

building. Once again, President Putin faced themost awful dilemma – how to free hostages andsave lives without giving in to the terrorists’demands, which as usual included outrightindependence for Chechnya. Negotiations with adoctor who had helped during the theatre siege andwith a local government leader got nowhere.Packed into the school gymnasium, in swelteringheat, the children were traumatised and parched.On the third day, special forces stormed the schoolfollowing two unexplained explosions. The rebelsfought back. Twenty-eight terrorists were killed,but so were 334 hostages, mostly children.

It was the bleakest day yet in Russia’s failingbattle against terrorism on its own soil. The abilityof gunmen and suicide bombers to wreak havocalmost at will demonstrated the impotence of theauthorities and the nonsense of Putin’s claim tohave ‘won’ the fight. The Beslan tragedy was thesixth major terrorist incident in 2004 alone.

In February 41 people were killed in a bombattack on the Moscow underground.

In May the pro-Moscow president of Chechnya,

Akhmat Kadyrov, was assassinated at a VictoryDay parade in the capital, Grozny.

In June a group of terrorists from Chechnyaattacked the capital of the neighbouring republic ofIngushetia. They killed 95 people and captured alarge cache of weapons which were later used atBeslan.

In August 90 people died when two aircraftwere simultaneously blown up in mid-air bysuicide bombers.

And at the end of the same month, just the daybefore Beslan, a woman blew herself up in aMoscow metro station, killing herself and tenpassers-by.

Vladimir Putin finally addressed the nation ontelevision on the evening of Saturday, 4September, a day after the violent end to the schoolsiege and a few hours after travelling to the sceneto meet some of the survivors. He looked deeplyshaken, and spoke slowly and emotionally aboutthe ‘terrible tragedy on our soil’. Like a priestaddressing a funeral service, he asked people ‘toremember those who perished at the hands of

terrorists in recent days’, and dropped his head insorrow. But then he quickly moved on from theimmediate crisis to draw far-reaching and startlingconclusions that in many ways defined the rest ofhis presidency.

‘Russia has lived through many tragic events andterrible ordeals over the course of its history,’ hesaid. ‘Today, we live in a time that follows thecollapse of a vast and great state, a state that,unfortunately, proved unable to survive in arapidly changing world. But despite all thedifficulties, we were able to preserve the core ofwhat was once the vast Soviet Union, and wenamed this new country the Russian Federation.’

The style was odd – a history lesson deliveredat the nation’s moment of grief, evoking thegreatness of the USSR. In his next words Putinbetrayed his nostalgia for the iron fist of thecommunist police state, which had been replacedby laxity:

We are living through a time when internal conflictsand interethnic divisions that were once firmly

suppressed by the ruling ideology have now flared up.We stopped paying the required attention to defenceand security issues and we allowed corruption toundermine our judicial and law enforcement system.Furthermore, our country, formerly protected by themost powerful defence system along the length of itsexternal frontiers overnight found itself defencelessboth from the east and the west. It will take manyyears and billions of roubles to create new, modernand genuinely protected borders. But even so, wecould have been more effective if we had actedprofessionally and at the right moment.

In an intimation of the crackdown that wouldsoon follow, Putin went on: ‘We showed ourselvesto be weak. And the weak get beaten.’

Putin was putting a whole new spin on theterrorist attack. There was no mention of his ownforces’ brutality in Chechnya – the main factor thatlay behind all the home-grown terrorism. In fact,he did not mention the word ‘Chechnya’ at all.Instead he was blaming the West! He couched hisaccusation in strange, ambiguous terms:

Some would like to tear from us a ‘juicy piece of

pie’. Others help them. They help, reasoning thatRussia still remains one of the world’s major nuclearpowers, and as such still represents a threat to them.And so they reason that this threat should beremoved. Terrorism, of course, is just an instrumentto achieve these aims.

The attack on Beslan, Putin seemed to be saying,was part of a Western conspiracy to dismember theRussian Federation. Foreign governments wereusing terrorists as an ‘instrument’ to achieve thatend. He addressed his people now in apocalypticterms, like a leader on the brink of war:

As I have said many times already, we have foundourselves confronting crises, revolts and terroristacts on more than one occasion. But what hashappened now, this crime committed by terrorists, isunprecedented in its inhumanness and cruelty. This isnot a challenge to the president, parliament orgovernment. It is a challenge to all of Russia, to ourentire people. Our country is under attack.

Putin swore that as president he would not beblackmailed or succumb to panic. ‘What we are

facing is direct intervention of international terrordirected against Russia. This is a total, cruel andfull-scale war.’ He warned Russians they could nolonger live in such a ‘carefree’ manner, anddemanded tough action from the security services.He promised ‘a series of measures aimed atstrengthening our country’s unity’.

Those measures were announced over thecoming days, and they shocked those who believedRussia was already far too authoritarian. Putin’sformer prime minister Mikhail Kasyanov (who hadbeen sacked half a year earlier) called it an ‘anti-constitutional coup’.

First, in the name of fighting internationalterrorism, Putin abolished the direct election ofregional governors. From now on, he himselfwould nominate them, and their appointment wouldbe rubber-stamped by regional assemblies. (Theimplication, never properly explained, seemed tobe that Beslan would not have happened if regionalgovernors were not ‘out of control’.) Second, itwas made almost impossible for independentpoliticians or radical opposition parties to get into

the State Duma. Until now, half of the 450-seatparliament had been elected from party lists, whilethe other half were individual politicians directlyelected by voters in 225 constituencies. From nowon, all would be chosen from party lists; thesingle-member constituencies were abolished. Thethreshold required for a party to enter parliament atall was raised from 5 to 7 per cent. The rules forsetting up new political parties were alsotightened.

Putin was ratcheting up his own control, andstrangling the opposition. The ‘vertical of power’created in 2000 was now made rigid. Putin’s‘ideologist’, Vladislav Surkov, was wheeled out todignify the crackdown with a pseudo-academicterm. He called it ‘sovereign democracy’, orsometimes ‘managed democracy’. In fact, it wasthe end of democracy. In an interview with thenewspaper Komsomolskaya Pravda, he gave anAlice in Wonderland version of the latest reformpackage. Everything was the opposite of how itseemed: the new election system would notweaken the opposition but ‘bring it back from

political oblivion’; the reforms would strengthennot Putin but the state; the appointed governorswould have greater, not fewer rights. A furtherinitiative announced by Putin – the creation of anew ‘Public Chamber’, an assembly of 126appointed worthies who would discuss civicinitiatives and draft laws – had caused somebewilderment, since it was assumed that this waswhat the elected State Duma was supposed to do.Surkov explained that the trouble with parliamentsis that deputies are always thinking about re-election; in the West this is known as ‘being heldto account by the electorate’, in Russia accordingto Surkov, it leads to populism. The experts in thePublic Chamber would be less dependent on thepolitical climate and thus be more objective.12 (Ameasure of Surkov’s grasp on reality was given afew years later, when he said on television that‘Putin is a person who was sent to Russia by fateand by the Lord at a difficult time for Russia. Hewas preordained by fate to preserve ourpeoples.’13 Clearly such a God-given leader couldinterpret democracy any way he liked.)

And what were people to make of thepresident’s talk of foreign powers trying to seize a‘juicy piece of pie’? According to the experiencedanalyst Dmitry Trenin, Putin’s foreign policy wasentering a new stage. Until 2003, he wrote, ‘Russiahad been mostly moving toward rapprochementwith the West under the slogan of its “Europeanchoice” and with a quest to become allied with theUS.’ Henceforth, ‘Moscow pursued a policy ofnonalignment, with an accentuated independencefrom the West, but combined with reluctance toconfront it.’14

It was the beginning of a new isolationist stance.In Putin’s second term there would be no moresucking up. He believed Russia had dropped itsguard and needed to defend itself against twinevils – terrorism (now defined as part of a foreignconspiracy) and Western-style democracy, whichwas infiltrating the former Soviet space, firstthrough Georgia, and soon ... through Ukraine.

7

ENEMIESEVERYWHERE

The Orange RevolutionThe scenes in Kiev in late 2004 caused apoplexyin the Kremlin: a sea of orange clothes andbanners, a million protesters braving sub-zerotemperatures, day and night, to bring the Ukrainiancapital to a standstill. Bad enough that this was arepeat of the Tbilisi events a year earlier –protests against a rigged election, mass support fora pro-American, nationalist candidate who offered

an alternative to corrupt, authoritarian, pro-Russian rule. But this was happening in Ukraine,the most important for Russia of all the formerSoviet republics. With 47 million inhabitants,Ukraine was ten times the size of Georgia. One insix of the population was an ethnic Russian, andthere were millions of mixed Russian-Ukrainianfamilies. Putin (like many Russians) saw it as amere extension of Russia itself. He reportedly toldPresident George W. Bush in 2008: ‘You don’tunderstand, George, that Ukraine is not even astate. What is Ukraine? Part of its territory isEastern Europe, but the greater part is a gift fromus.’ One part – the Crimean peninsula – really wasa gift, transferred by decree from Russia toUkraine by the former Soviet leader NikitaKhrushchev. Crimea was strategically vital toRussia, as the Black Sea Fleet was based there –and indeed the whole country stood like a greatboulder across many of the strategic links betweenRussia and Europe – the oil and gas pipelines, theelectricity grid, the military highways – the lastbuffer between Russia and the ever-expanding

NATO. And yet the man who would be presidentthere, Viktor Yushchenko, with his American wife,was talking of joining NATO!

Putin would not make the mistake of sending hisforeign minister to Ukraine to ‘sort things out’ andrisk letting it slip away like Georgia. In Ukraine,Putin would do whatever it took to stop the rot. Heput his new chief of staff, the future president,Dmitry Medvedev, in charge of working out astrategy.

The danger had been clear to Putin since theUkrainian election campaign started back in July.The Western-oriented opposition was led by acharismatic duo: Yushchenko, who had alreadyserved as the country’s central bank chairman andprime minister, and Yulia Tymoshenko, a fierypolitician renowned for the trademark blond plaitwound like a pie-crust around her head and for hercontroversial career in the gas business which hadmade her one of Ukraine’s richest people. The twoformed an electoral coalition, Force of the People,and struck a deal under which, if Yushchenko waselected president, he would nominate Tymoshenko

to be his prime minister. Both wanted to assertUkraine’s independence from Russia and, inparticular, its right to join the European Union andNATO if it wished.

The establishment candidate was the primeminister, Viktor Yanukovych, a man with anunprepossessing past – he had two criminalconvictions as a youth for robbery and assault –that made even Vladimir Putin wary of him, thoughhe was clearly preferable to Yushchenko. Severalwell-placed Russians have indicated to me thatPutin did not think Yanukovych was the bestcandidate, but acquiesced because he had the fullsupport of the incumbent president, LeonidKuchma, who threw all the government’s resourcesbehind his campaign. State television gaveYanukovych wide and positive coverage, whiledisparaging Yushchenko as an extreme nationalist,damningly married to an American of Ukrainianextraction who may even have been a CIA agent,plotting her husband’s seizure of power.

In an interview, Kuchma confirmed that he andPutin had discussed who the preferred candidate

should be. ‘It was not a secret. Didn’t the Westdiscuss who should be president of Ukraine? Thewhole Western community did that, but on the otherside just Russia, just Putin. Putin knew MrYushchenko’s statements and opinions. And he didnot have a great desire that he come to power.’1

Once Kuchma had chosen Yanukovych as his‘successor’, Putin threw the Kremlin’s supportbehind him. Ukraine now became a battlegroundfor influence, with the United States and Russiaboth openly supporting opposing candidates.

Just as in Georgia the previous year, WesternNGOs were heavily involved in the campaign,advising Yushchenko and the home-grown groupsthat supported him. The biggest youth group wascalled Pora (‘It’s Time’), which borrowed theelectioneering and civil disobedience techniquesof the Serbian group Otpor and the GeorgianKmara. The Russians for their part sent so-called‘political technologists’, including the well-knownGleb Pavlovsky (a one-time Soviet dissident andnow an adviser to Putin) and the politicalconsultant Sergei Markov, to work as spin doctors

with the Yanukovych team and act as a channelbetween them and the Kremlin.

The American ambassador to Kiev, John E.Herbst, recalled in an interview that Westernembassies ‘developed tools’ to make sure theelections would be free and fair. ‘I remember theCanadian ambassador took the lead on this todevelop a working group of interested embassieskeeping an eye on things relating to the election. Ialso then organised a regular meeting, first on amonthly basis but then it happened maybe everycouple of weeks, with all interested internationaland Ukrainian NGOs, to find out what they weredoing to encourage free and fair elections, and tobrainstorm on how we might better coordinate toget the outcome we want. And the outcome was afree and fair election, not any particular winner.’As in Georgia, the USAID contributed millions ofdollars to promote civil society, free media anddemocracy awareness. Herbst says all parties,including even the Communist Party, were free toavail themselves of these funds and programmes.2

At one point during the campaign Herbst

reached out to the Russian spin doctors to try togauge what they were up to. ‘I invited Pavlovskyand Marat Gelman, who was his partner in thisenterprise, to lunch. We had a pleasant lunch ... buta very restrained conversation. They really did notwant to talk too much about what they were doing.’Herbst says he made no bones about what theAmericans were doing in Ukraine: ‘In a sense Ihad an advantage because everything we weredoing was pretty much right out in the open. Wewanted to encourage a free and fair election, andwe said what we were doing publicly. I had noproblem telling them that NGOs in Ukraine, and forthat matter internationally, were trying toencourage this result too. They were more reticentto describe to me what they were up to, and I canunderstand why.’

What Herbst described as merely supportingfree and fair elections, Pavlovsky saw differently:‘I could see consultants and a large number ofNGO activists who were completely pro-American or pro-Atlantic.’ Pavlovsky was alsoreticent when asked what he had been trying to

achieve. He acted as a ‘channel ofcommunication’, he said, but found it hard toinfluence Kuchma, who insisted on running hiscandidate’s campaign on his own. ‘We neverunderstood why Kuchma selected him. There wereother governors much more acceptable to theelectorate. As I understood it, Kuchma wasexpecting a conflict, and Yanukovych seemed likea tough man who could handle it. It was hismistake. Yanukovych’s rudeness, his coarseness,irritated voters. And of course Putin noticed that,and was unhappy about it.’ By the end of thecampaign, Pavlovsky says he was reduced towriting sad reports back to Moscow about how thecampaign headquarters had ‘lost command’.3

In an interview, Sergei Markov was moreforthcoming about the advice Russian consultantsgave to the Kuchma/Yanukovych team – and madesome startling claims about the role the Russiansbelieved Western NGOs were playing. Markovopenly acknowledged – indeed stressed – that heand his colleagues were commissioned to do thiswork (to influence the election of a sovereign

state) by the Russian presidential administration.Part of their work, according to Markov, consistedin providing Kuchma and Yanukovych with dailyexpert analyses of the developing situation, toenable them to respond better. Secondly, he said,‘We saw that experts who were appearing in themass media were by and large firmly under theinfluence of Western foundations. And basicallythese Western foundations forbade them to sayanything good about Russia. If they did they werethrown out of the projects they were working on,lost their grants and ended up penniless. So wecame and started organising seminars, conferences,joint media projects with them, to try to get aroundthis “ban”.’4

It should be said that this assessment isprecisely the opposite of what the oppositionthemselves (and most Western observers)believed: that the media were totally controlled bythe government, and served a consistent diet ofpro-Russian views.

Markov gave this outlandish assessment of theopposition candidate. ‘We were firmly of the

opinion that Yushchenko was completelycontrolled by his wife, and she belonged to acircle of radical Ukrainian nationalists connectedwith the Nazi movement and with, not so much theAmerican special services, rather with circles ofvarious East European diasporas, especially thePoles, who hate Russia as only Polish nationalistscan. I was certain that Yushchenko, as a weakperson, would totally carry out the programmes ofthese radical nationalists, whose aim was to createthe maximum conflict between Ukraine and Russia– even a small war. In order to cause a quarrelbetween these fraternal nations, the Russians andUkrainians, blood had to be spilt. I am convincedthat these people were determined that Ukrainiansand Russians should start killing each other – and Imean killing each other.’

These are quite astonishing claims, but they areimportant, for it is highly likely that Markov’sapocalyptic view was shared by his masters in theKremlin.

At the same time, the Russians were fully awarethat Yushchenko had a big chance of winning, and

made strange undercover overtures to his team.Oleh Rybachuk was Yushchenko’s campaign chief,and future chief of staff. He says he received a callout of the blue from an old student friend whom hehad not seen for 24 years. ‘When he called me Iknew he was in the KGB. He suggested that I cometo Moscow to meet people who were close toVladimir Putin.’5

Over the next month and a half Yushchenko’sadviser made weekly visits to Moscow, meeting‘in dimly lit restaurants and speaking in whispers’.The Russians wanted to know what Yushchenkowould do if elected. Rybachuk told them: ‘Ourpolicies are simple. We want to be a democraticcountry, a European country. We want to be aNATO member for European security. When wecome to power we won’t be a problem becauseyou’ll know what to expect from us.’ It was hardlythe reassurance the Kremlin was hoping for.

On 5 September, just two months before electionday, Yushchenko fell seriously ill after a dinnerwith the head of the Ukrainian security service. Hetook painkillers when he got home, but in the

morning was feeling worse. Rybachuk recalls: ‘Itwas around ten in the morning and he said, “Let’shave this meeting fast because I feel really bad.Something’s not right.” ’ The cause of the paincould not be found and after three daysYushchenko was flown to a private clinic inVienna where he was diagnosed with dioxinpoisoning. The poison caused stomach ulcers,problems with his spleen and considerabledisfigurement to his face.

‘I remember waking up in the clinic at 5.30 inthe morning,’ Yushchenko recalled, ‘and half of myface was paralysed, and within three hours I couldbarely make a sound. I was losing my speech.Every morning I looked in the mirror and my facewas getting bigger and bigger.’6

For two weeks, Yulia Tymoshenko stepped intothe breach, addressing rallies and blamingYushchenko’s enemies for ‘cynically poisoninghim’. When he finally returned to the campaigntrail he was more popular than ever, the scars onhis once handsome face visible proof of hisenemies’ desperation. Thanks to Channel 5 – a

television station owned by a wealthy businessmanin Yushchenko’s Our Ukraine party – his wordswere broadcast live to public squares across thecountry: ‘The last two weeks, dear friends, havebeen the most tragic in my life.’

Moscow had to step up a gear now to promoteits candidate, who was trailing in the opinionpolls. On 9 October Putin invited Kuchma andYanukovych to Moscow at short notice – tocelebrate his recent birthday. The televisioncoverage was designed to demonstrate howchummy they all were, in the hope that some ofPutin’s stardust would land on Yanukovych’sdowdy shoulders.

‘Thank you for responding to my invitation tocome at such short notice,’ Putin gushed. ‘It’s agood pretext.’

‘It’s a wonderful pretext,’ the Ukrainians gushedback. With the cameras still on him, Kuchma tookthe chance to sound presidentially ‘neutral’ whilewarning his countrymen back home that, as EduardShevardnadze might have said, the sun rises in thenorth: ‘When I am asked about our two main

presidential candidates, I reply that for me it’s notso much a question of who but of what will beafter the election. Which path will Ukraine take?The tried and tested one we have today, which hasgiven results – even if our countrymen perhaps donot fully feel those results – or the path that willscupper everything that’s been done these past tenyears, and put everything in doubt? I think ourmeeting [with Putin] will help to push things in theright direction.’

Lest anyone was in any doubt, Putin thentravelled to Ukraine for a three-day visit at the endof October – an unprecedented intervention righton the eve of the first round of the election. He didnot need to do anything so crude as to publiclypraise Yanukovych or disparage Yushchenko. Hisvery presence was a reminder of what was most atstake in this election, and everyone knew who thepro-Russia candidate was. Putin began with a liveinterview simultaneously broadcast on threeUkrainian state television channels, to whichviewers could phone in or email their questions.Over the next two days he held talks with the

leadership and stood beside Yanukovych atceremonies to mark the 60th anniversary ofUkraine’s liberation (by the Russians) from Nazioccupation. The spin doctors were doing a prettygood job. And at this stage the Russians werefirmly convinced that Yushchenko stood no chanceof being elected.

But polling on 31 October proved them wrong.Yushchenko emerged fractionally ahead ofYanukovych, with both taking just under 40 percent. A run-off between the two leading candidateswas required, and this was set for Sunday 21November.

In that second round, an exit poll paid for byWestern embassies put Yushchenko 11 percentagepoints ahead of his rival. But official results putthe prime minister three points ahead. The resultwas denounced by Western election observerswho said they had witnessed abuse of stateresources in favour of Yanukovych. Yushchenko’scampaign chief, Oleh Rybachuk, recalls: ‘I wasvoting in a small polling station in the centre ofKiev. There were always very few people voting

there, but on the day of that election there was asudden queue of people with additional votingslips, who had arrived from the Donetsk region[Yanukovych’s heartland]. There were more ofthem than there were Kiev people who came tovote at their own polling station!’

The fraud was so evident that Yushchenkosupporters began to pour into Independence Square(known as Maidan) in central Kiev, setting up atent city where they planned to sit it out until theresult was changed. Orange became the colour ofthe revolution – chosen rather than the blue andyellow of the Ukrainian flag in order to avoidnationalist overtones. Over the next week or so, amillion people joined in, besieging governmentbuildings.

Vladimir Putin, however, immediately rangYanukovych to offer his congratulations. ‘It was asharp fight,’ he said, ‘but an open and honest one,and your victory was convincing.’ Apart from‘sharp’, every adjective could scarcely have beenfurther off the mark. Being charitable, one mightpoint out that he was in Brazil at the time, and

maybe out of the loop. But what were hisintelligence services telling him? His adviser GlebPavlovsky says it was no mistake, but a deliberateattempt by Putin to challenge the West in what hedescribes as an ‘international fight’ over theelection result. ‘The congratulations served as apolitical signal. The fight for recognition of theresults had started, and Putin took part in that fight.In the end, Russia lost, but if it had not, the resultwould have been different.’

President Kuchma was paralysed. His capitalcity was witnessing the biggest display of peoplepower Europe had seen since the fall ofcommunism. He toyed with the idea of using forceto remove the protestors, hoping all the while thatthe sub-zero temperatures would drive them away.They did not, and the demonstrators themselvesremained entirely peaceful to avoid provokingviolence. In the early hours of 23 NovemberKuchma called President Kwaśniewski of Polandfor advice. ‘He was incredibly nervous,’Kwaśniewski recalls, ‘and kept repeating, “I will

not allow blood to be spilt here” – two or threetimes. He asked me to go to Kiev. I said, “It’s themiddle of the night, I’ll see what I can do bymorning.” ’7

In the morning Kwaśniewski called Tony Blair.Blair’s chief of staff, Jonathan Powell, recalls:‘He was urging Tony to go with him to Kiev. ButTony was reluctant to do that because the Russianshad this obsession that we were trying to surroundthem, that the West was moving into their sphere ofinfluence. Tony decided not to do it.’

The Polish president pulled together a EuropeanUnion mission to mediate between the twocandidates and President Kuchma. They wouldtravel to Kiev by the end of the week. But eventswere moving fast.

On Tuesday 23 November Yushchenko declaredhimself the winner and symbolically took thepresidential oath. His running-mate YuliaTymoshenko impetuously announced she wouldlead a march on the presidential administration,declaring, ‘Either they will give up power or we

will take it.’ Her call provoked a row within theteam. Rybachuk told her: ‘You shouldn’t beprovoking the crowds like that. What if somebodygets killed?’

‘Then they’ll die as heroes,’ she replied,according to Rybachuk.

The next day the Central Election Commissionofficially declared that Yanukovych had won. TheUnited States, which had invested so much intrying to ensure a fair election, had to decide whatto do in the face of such apparently blatantmanipulation. The secretary of state, Colin Powell,recalled in an interview: ‘I came into the officewhile all this was unfolding and called in my team,and I said, “Look, this is too big. We cannot simplystand by and say nothing and put out mealy-mouthed statements.” ’ He went down to the pressroom and made a statement that set Washington atodds with Moscow: ‘We cannot accept this resultas legitimate because it does not meet internationalstandards and because there has not been aninvestigation of the numerous and credible reportsof fraud and abuse.’

On his way back from his Latin American trip,President Putin stopped in at The Hague for asummit with EU leaders, where he picked up thegauntlet. ‘We have no moral right to push a bigEuropean state into any kind of mass disorder,’ hesaid. ‘We should not allow the resolution of suchconflicts through mob rule to become part ofinternational practice.’

Behind the scenes, it seems that Putin wasadvising Kuchma to get a grip and clear thecrowds from the streets. Asked about it in aninterview, Kuchma admitted: ‘Putin is a hard man.It wasn’t like he was saying directly, “Put tanks onthe street.” He was tactful in his comments. Butthere were some hints made, that’s no secret.’ Thehints were evidently rather heavy, and Kuchma hadto insist: ‘I will not use force to cleardemonstrators from the Maidan. Because I knowthere are children there, and it’s obvious how itwould end.’8

On the Friday, five days after the election, theEU mission arrived in Kiev, led by Kwaśniewski

and the EU’s foreign policy chief, Javier Solana.But as a million Yushchenko supporters waitedpatiently in the streets, some 40,000 miners fromYanukovych’s heartland, Donetsk, were marchingon Kiev. Kwaśniewski told Kuchma: ‘What areyou saying? This means a massacre! I am tellingyou that if this happens I go straight to the airportwith Solana, and we will hold a huge pressconference in Brussels where we will accuse youof starting a civil war in Ukraine.’

Kuchma took the necessary measures to preventdisaster. ‘I have leverage with influential people,’he recalled later. ‘We just managed to stop them.’

Before the mediation talks began Kuchma putthrough a call to President Putin in Moscow tostress that the Round Table must have a Russianrepresentative present. Putin proposed sendingBoris Yeltsin, which sounded like a joke toKwaśniewski. He told Kuchma: ‘Listen, I’m sorry,but I can’t treat this seriously, because much as Iappreciate Yeltsin and I enjoyed working withhim, we want to have serious talks, not a show.’9

Putin sent a trusted functionary instead – BorisGryzlov, a former interior minister and chairmanof the State Duma, whom Putin had just made headof his party, United Russia. Gryzlov’s contributionto the talks was scarcely more productive thanYeltsin’s might have been. Yushchenko says thetension was overpowering. ‘I knew I was the lastperson Russia wanted as president. Thesefalsifications, the way the Russians were taking aninterest, their slanted position during the election,this interference in Ukrainian internal affairs ... itwas obvious to all.’

Gryzlov’s starting point, according toKwaśniewski, was that Yanukovych waspresident, and that all the stories aboutirregularities were a waste of time, stirred up byforeign forces. There was nothing to talk about andthe Round Table made no sense.

Yushchenko and Yanukovych each accused theother of rigging the vote in different constituencies.Someone suggested that overall the vote wasn’tforged by more than 10 per cent. Kwaśniewski

says he looked at him and said: ‘Okay, put that inyour constitution, then – that if an election is notforged by more than 10 per cent, it’s valid!’Gryzlov then referred to the US presidentialelection of 2000, when the final outcome dependedon hanging chads and a recount in Florida, andsuggested that, like the Americans, they should justaccept an apparently flawed result and agree to it.‘Let’s stick with the constitution.’

There was stalemate in the talks. Kwaśniewskiknew that only one man could break the deadlock.He asked the German chancellor, GerhardSchröder, to talk to Putin. ‘I said: “You knowPutin. Tell him – if you persist in claiming that thisis some artificial movement, financed by Westernforces, which has no legitimacy, and that theelections were not rigged, then you’re getting itwrong; it means you don’t understand theseriousness of this situation.” ’

Schröder called Putin – but got an earful. Putinbelieved he understood the situation perfectlywell, much better than Kwaśniewski and his EU

mission. Schröder reported back to Kwaśniewskithat it was one of the hardest calls he had ever hadwith Putin.

It is not clear what effect Schröder’s call had, orwhat Putin may have subsequently said to Kuchma.But on Sunday evening, one week after theelection, the US embassy received news that theworst was about to happen: heavily armed policeunits were being sent in to disperse thedemonstrators. Ambassador Herbst calledWashington and told them, ‘I think SecretaryPowell needs to call President Kuchma.’

Powell was told that interior ministry troopswere massing on the outskirts of the city. ‘I tried tocall the president, but he suddenly wasn’tavailable.’ Kuchma explained in an interview thatthe reason he refused the call was because it was3am and he had no interpreter available for theconversation. In the meantime the ambassador gotthrough to Kuchma’s son-in-law, Viktor Pinchuk,and told him: if any repression happens tonight, wewill consider Kuchma personally responsible.

The troops were called off. When Powell finally

got through to the president in the morning Kuchmatold him nothing would happen: it was a ‘falsepanic’. But he added, ‘Mr Secretary of State, if theWhite House was surrounded as our presidencyand government offices are at this moment, whatwould you do?’ Powell, according to Kuchma, hadno answer.

Kuchma was becoming ever more desperate andwas now prepared to ditch his own man as well asYushchenko and hold a fresh election with newcandidates. He says: ‘If Yanukovych had becomepresident then, Ukraine would have become apariah state. There was all that pressure from thestreet. Plus the diplomatic blockade from the West,especially the USA.’

But nothing could be done without Moscow’sblessing. On Thursday 2 December Kuchma flewto Moscow for consultations with Putin at Vnukovoairport. Putin seemed to give his backing to theidea. ‘Re-running the second round [withYanukovych and Yushchenko] might also achievenothing,’ he told Kuchma. ‘You’ll end up doing it athird, a fourth, and a twenty-fifth time, until one

side gets the result it needs.’Putin spoke of his fears that Ukraine could split

into two parts – the western, more nationalisticpart that overwhelmingly supported Yushchenko,and the eastern, heavily industrialised partbordering Russia, where Yanukovych drew muchof his support. ‘I have to tell you straight,’ he toldKuchma. ‘We are very worried about the trendtowards a split. We are not indifferent to what ishappening. According to the census, 17 per cent ofUkraine’s population are Russians – ethnicRussians. In fact I think there are far more of them.It’s a Russian-speaking country, in both the eastand the west. It’s no exaggeration to say that everysecond family in Ukraine, if not more, has relativesand personal ties to Russia. That’s why we are soworried by what is happening.’

It was clear from this that Putin regardedUkraine (as he later revealed to George W. Bush)as almost a province of Russia – certainly whatwould later be termed a ‘sphere of privilegedinterest’. His adviser, Sergei Markov, says he hadprepared briefing papers for Putin earlier in his

presidency that suggested ‘public opinion inUkraine wanted there to be no borders betweenUkraine and Russia, that all the citizens shouldhave the same rights, the same currency, the sameeducation and information policy. But at the sametime Ukraine would keep its sovereignty – separateflag, anthem, president, citizenship and so on.’

This was what the Kremlin leadership believed.Just as strongly, the American administrationbelieved Ukraine was ripe to align itself with theWest, and that the majority of its citizens aspired tomembership of NATO and the EU.

In fact, both the Russians and the Americansunderplayed the most important thing – thatUkraine is a finely balanced entity, divided andpulled in many directions. There is a linguisticsplit between Russian and Ukrainian speakers, areligious divide between Orthodox and CatholicChristians; there are those who pine for the olddays (more security, less tension, less corruption,little ethnic strife) and those who want to move on(openness, democracy, free enterprise); there areUkrainian nationalists and ethnic Russians –

distributed across an imprecise geographical‘east–west’ divide. Opinion polls did not show anoverwhelming desire across the country for NATOmembership, although joining the EU was morepopular. The family ties of which Putin spoke werereal. But at the same time this was not the sameUkraine that was once part of the Soviet ‘family’;it had developed for 13 years already as a separateentity, and a new identity was growing. The use ofthe Ukrainian language was far more widespreadthan it was in Soviet days when I onceembarrassed the head of the Ukrainian CommunistParty, Vladimir Shcherbitsky, by asking him whatlanguage was used at Ukrainian central committeemeetings. There was a new pride in the nation, andan awareness that economically, at least, theywould be far better to tie their future to the Westthan to the semi-reformed and corrupt economy ofRussia.

It was these sentiments that prevailed when the2004 election was finally re-run, following aSupreme Court decision, on 26 December, undernew rules to tighten up procedures and reduce

fraud. Viktor Yushchenko was declared the winnerwith 52 per cent of the vote, to Yanukovych’s 44per cent. International observers declared theballot had been run fairly.

The result was a humiliation for Putin, who hadstaked everything on preventing what he saw as the‘loss’ of Ukraine to a Western conspiracy.

The Orange Revolution was like a doorslamming on Russia’s and the West’s efforts tounderstand one another. It is hard to think of anyevent that could be interpreted in suchdiametrically opposed ways. The West saw it as atriumph of democracy. Here is what theWashington Post wrote, looking back a few yearslater: ‘Ukraine’s Orange Revolution erupted in2004 because of an attempt by Russian leaderVladimir Putin and his proxies to impose onUkraine a version of Russia’s corruptauthoritarianism – beginning with a fraudulentpresidential election.’10

In Russia, it was seen as essentially the work ofUS special operations. Gleb Pavlovsky describedthe Orange protestors as ‘Red Guards’, trained and

funded by American consultants. ‘But this isn’trocket science. There are plenty of localspecialists who’ve been working on the “DestroyRussia” project since 1990–91, ever since theChechen project.’11

Sergei Markov said it was a coup aimed atbreaking Ukraine away from Russia, and thatYushchenko triumphed only through falsification.‘The Orange never came to power as the result offree elections. They came to power as the result ofan anti-constitutional coup, being supported, ofcourse, by the American administration and theWestern observers. No matter how many Americansenators say that it was legal, it was anti-constitutional.’

Pavlovsky, the Kremlin’s main operator duringthe revolution, had to sneak away in disguise. ‘Mydeparture from Kiev was quite funny. I was livingin a hotel right in the centre of the city, in themiddle of the orange crowd which was blockingthe presidential administration. I was forced tochange clothes – like Kerensky [Russian primeminister overthrown in the 1917 revolution], who

our Soviet textbooks say escaped dressed as afemale nurse. I went out through the crowd wearingan orange scarf and hat.’

The backlashFew people can say they know very much aboutVladislav Surkov, even though for more than adecade he has been one of the most influentialpeople in the Kremlin. Hiding behind theinnocuous title of deputy chief of staff to thepresident, he is in fact the architect of Russia’spolitical system – changing chameleon-like at hismaster’s command, thinking up ever new structuresand ideologies to justify whatever twist or turnVladimir Putin required. His most notoriouscoinage – the notion of ‘sovereign democracy’ –essentially meant that Russia would decide foritself, as a sovereign state, what kind of democracyit needed. If today it meant that parties needed 7per cent of the vote, not 5, to get into parliament,Surkov was on hand to explain why. If a few yearslater, it was decided that 5 per cent was, after all,

better, Surkov would justify that too. If governorsshould no longer be elected, Surkov would explainwhy appointing them was also democratic.

He was born in 1964, and for a long timeconcealed the fact that his father was Chechen (hisname was originally Dudayev). He studied at ametals institute, did his compulsory militaryservice in military intelligence, and then turned tothe arts, training to become a theatre directorbefore studying economics and going into business.He composed lyrics for rock bands, and stillwrites novels. This post-Soviet renaissance manworked with Mikhail Khodorkovsky as head ofPR, before moving briefly to central television andthen into Putin’s office as what the Soviets wouldhave called ‘ideology secretary’.

Following the ‘catastrophe’ of the OrangeRevolution, it fell to Surkov to devise strategies toprevent the contagion spreading to Russia (as theentire ruling elite believed it would). In doing sohe was guided by the assessments of those who hadbeen on the ground in Ukraine during thosetumultuous events.

Gleb Pavlovsky, having safely escaped in hisorange disguise, wrote in the press: ‘Kiev is aserious wake-up call for Russia. I believe that ourpolitical system is not ready for the newrevolutionary technologies of the age ofglobalisation. The combination of the internalweakening of the political system and externalpressures and provocations could lead to a newrevolution, and a global revolution in Russiawould not be a small thing. We avoided bloodshedin 1991, almost by a miracle. We avoidedbloodshed in Russia in 1996 and 1999 everywhereexcept in Chechnya. But that doesn’t mean thatanother miracle is coming.’12

He told the BBC, looking back in February2008: ‘This catastrophe was very useful for us. Welearned a lot of valuable lessons. Putin started totake much more seriously the threats he faced. Itvery quickly became clear that they would try toexport this to us. We needed quickly to prepare, tostrengthen our political system and make it readyfor a blow from the outside – a blow in a “velvetglove”, but a blow that would topple us

nonetheless. Putin in 2005 very quickly prepared,consolidated the elite, the political system, thecooperation, so there could be no orangerevolution in Russia. Within a year we had turnedback the wave of coloured revolutions.’

Surkov and his comrades targeted two lurkingdangers – the ‘unguided’ energies of young people,and foreign-funded NGOs. To tackle the firstproblem, it was decided to set up a mass youthorganisation that would be totally loyal to Putinand the current regime. It was called Nashi –meaning ‘Our Own People’. The word has astrongly nationalistic or chauvinistic connotation,implying that all those who are not ‘nashi’ are‘against us’, even traitors.

Sergei Markov describes himself as one of theideological team, under Surkov, that begat thismonster, which smacked so strongly of the Sovietcommunist youth movement, the Komsomol. In aninterview, Markov stated without embarrassment:‘The main aim of Nashi was to prevent an orangerevolution in Russia. So the first guys who joinedwere super patriotic. And the first rule was

geography. They had to live within ten hours’ driveof Moscow so that they could take the night busand be in Moscow in the morning and occupy RedSquare to protect the sovereignty of the state.’

Nashi quickly had its own website(www.nashi.su, using the still valid domain of theSoviet Union rather than Russia). Over the comingyears they would hold patriotic summer camps atLake Seliger, north of Moscow, dedicated to ahealthy lifestyle, political education andparamilitary exercises; they would turn outregularly in their red T-shirts not just for their owndemonstrations but to swamp opposition protests;and they mounted campaigns against any institutionor individual they didn’t like – including Westernambassadors, critical newspapers and even akebab shop unluckily named ‘Anti-Soviet’. Nashidescribes itself as a ‘democratic anti-fascist youthmovement’. Its membership soon grew to wellover 100,000.

The Surkov team felt their mission was alreadyaccomplished on 15 May 2005 when Nashimobilised its first large rally. Some 60,000

activists, mostly transported into Moscowovernight on thousands of buses, brought LeninskyProspekt to a standstill. According to Markov,‘after that the talk about orange revolutionstopped’.

Mission accomplished, but role far from over.Nashi became the self-appointed voice of publicoutrage, a potent political force that purported tobe independent but in fact enjoyed the absoluteprotection of the state, however lawless orthuggish their behaviour became. Their activitieshad little to do with preventing a colouredrevolution in Russia. The British ambassador,Tony Brenton, would find himself in their sightsafter he attended a conference held by The OtherRussia, a coalition of opposition groups, in July2006. Brenton recalls the incident in the self-deprecating manner of a British diplomat: ‘I wentalong to this Other Russia conference to expressour support for Russian civil society, which I didin a deeply dull speech. I wasn’t the onlyambassador there, but for some reason theRussians picked me out. And this youth group,

Nashi, which is a ruling-party youth group, so ineffect works for the Kremlin, demanded anapology for Tony Brenton’s interference in Russianpolitics. Now there was no way I was going toapologise, so then they said, well we are going tohassle Tony Brenton until he does apologise. Itwas my job to put up with it, which I did.’13

What he and his family had to endure, however,bordered on the criminal. Hooligans from Nashicamped outside his house, waving banners,followed him around town and shouted abuse at theback of public meetings he addressed. When hiswife drove out to go shopping, they hammered withtheir fists on the roof of her car. Brentoncomplained about this intimidation, which clearlyviolated the Vienna Convention on the status ofdiplomats (not to mention laws againstharassment), but it took half a year before theforeign ministry took action to force Nashi to backoff.

Nashi undertook similar actions against theEstonian ambassador to express the ‘outrage of theRussian people’ against her country’s decision to

remove a memorial to Soviet ‘liberators’ ofEstonia (considered occupiers by most Estonians)from the centre of the capital, Tallinn.

Whenever complaints were made, Kremlinspokesmen would shrug their shoulders, claiming itwas nothing to do with them, almost laughing it offas a bit of harmless fun. But the link with theKremlin is explicit. The Nashi website is full ofarticles by Surkov, Putin and Medvedev, all ofwhom also attend their conferences and summercamps. Putin’s party, United Russia, also has itsown official youth wing, Molodaya Gvardiya(Young Guard – another Soviet-era term), which israther more disciplined than Nashi.

Surkov’s second line of attack, to ward off theorange ‘contagion’, was aimed against non-governmental organisations, particularly thosewhich received funding or support from abroad.These had been identified by the paranoiacs in theKremlin not just as factors in the revolutions inGeorgia and Ukraine (and a third grass-rootsrevolt in the former Soviet republic of Kyrgyzstanin February 2005) but as the means by which the

United States was allegedly plotting the downfallof the Putin regime.

Civil society had burgeoned in Russia eversince Gorbachev’s glasnost policies had allowedthe first ‘informal organisations’ to be registered.Now there were hundreds of thousands of them,and about 2,000 dealt with human rights anddemocracy issues. Organisations such as theCarnegie Centre provided independent expertanalysis of Russian politics; Memorial chronicledthe crimes of the past and kept alive the memory ofthe victims of communism; the Helsinki Groupmonitored human rights abuses. And some of themreceived grants or subsidies from Westerngovernments or from parent NGOs abroad.

Less than a year after the Ukraine revolution theState Duma introduced legislation to rein them in.The law, which would severely hamper theactivities of foreign-supported NGOs operating inRussia, caused an outcry in the West, and PresidentBush, among others, successfully lobbied for someof its terms to be softened. Nonetheless, theversion signed into law by President Putin on 10

January 2006 required all Russian NGOs todisclose their finances and sources of funding, andensure that their activities complied with Russian‘national interests’ or risk closure. It becameconsiderably more difficult for foreign groups tofund and support their partners in Russia. (ByOctober, Human Rights Watch, AmnestyInternational, the Danish Refugee Council and twobranches of Doctors Without Borders had beenforced to halt their work temporarily for allegedlyfailing to comply with registration requirements.)14

Aware of the bad publicity surrounding the newlaw, the Kremlin resorted to Soviet-stylepropaganda to make the public aware of howheinous NGOs could be.

A fortnight after the law was signed, LyudmilaAlexeyeva, a 78-year-old human rights activist andchairperson of the Moscow Helsinki Group, was athome in Moscow when a friend called and told herto switch her television on, quickly. ‘I switched onthe TV,’ she told me, ‘and saw some strangesilhouettes. The presenter, in a dramatic voice,was saying that some English diplomats had made

some kind of transmitter, inside a rock, in somesquare, stuffed with top-notch technology.’15 Statetelevision had been given an extraordinary scoop:clandestine footage of British spies in action. Thepictures showed named British diplomats,including one Marc Doe, a ‘second secretary’(often a euphemism for an MI6 agent), retrievingdata from a fake rock, in reality a transmitter,planted in a park. The report showed the rockbeing opened up, to reveal a James Bond-stylegadget inside.

The story was bizarre, but it was not untrue.Tony Blair’s chief of staff, Jonathan Powell,admits: ‘The spy rock was embarrassing. I mean,they had us bang to rights. The rock was there forall to see, on television. Clearly they had knownabout it for some time and had been saving it up fora political purpose.’16

The political purpose became clearer asLyudmila Alexeyeva continued to watch.‘Suddenly they are talking about this diplomat atthe British embassy, Doe, or something like that,who “managed” our human rights organisations.

And then they show some piece of paper with thewords “Moscow Helsinki Group”.’ In fact, thedocument, signed by Doe, appeared to beauthorisation for the transfer of £23,000 to theMoscow Helsinki Group.

The Russians did not expel any of the Britishspies they had caught red-handed. The story had adifferent purpose: to demonstrate that NGOs likethe Helsinki Group were in the pay not just of theWest but of the British secret service. Alexeyevasays she had never met Marc Doe, and the HelsinkiGroup had only received one grant from theForeign Office’s Global Opportunities Fund,which was merely processed by the embassy. TheForeign Office says that all its payments to RussianNGOs are openly published on its website. But byusing a spy to handle some of those payments, ithad played straight into the Russians’ hands.

Two days after the ‘spy rock’ exposé, PresidentPutin justified the controversial NGO law bymaking an explicit link between espionage andNGO activities: ‘We have seen that attempts aremade to use secret services to work with NGOs

and that they are financed through the channels ofthe secret services. No one can say that this moneydoesn’t stink. I assume that many people will nowunderstand why Russia has passed a law regulatingthe activities of non-governmental organisations inthis country. The law is intended to block theinterference by other states in the internal affairs ofthe Russian Federation.’

Triumph of the strongmenIn his annual presidential address in April 2005,Putin uttered a sentence that has often been quotedas proof of his nostalgia for communism. ‘Thecollapse of the Soviet Union,’ he said, ‘was thegreatest geopolitical catastrophe of the century.’ Infact, he was not talking about the communist systemas such. What he regretted was the passing of amighty, unified, multi-ethnic state, whose collapse– as he went on to say in that speech – left ‘tens ofmillions of our fellow citizens and compatriotsoutside Russian territory’. This was, as he put it, ‘agenuine drama’ for the Russian nation – and it is

hard to dispute that.It was an unfortunate choice of words, however,

since so many of his actions at the beginning of hissecond term really did look as if he was trying torestore the Soviet Union, communism and all. Inresponse to the Beslan siege he had removed manyof the most democratic elements of the electoralsystem, tightening his personal grip on power. Inresponse to the popular revolutions in Georgia andUkraine he had squashed human rights groups andset up an ugly chauvinistic youth organisation. Allthe while, his stranglehold on the media wastightening.

There was little reason now for genuine liberalsto remain in Putin’s team. As early as February2004 Putin had lost his prime minister, MikhailKasyanov, who was sacked after a series ofdisagreements – the final straw being Putin’sdecision to appoint his friend Igor Sechin to thechairmanship of the state oil giant Rosneft. Sechinwas just one of Putin’s cronies (others includedex-KGB man Viktor Ivanov, ideology chiefVladislav Surkov and deputy chief of staff Dmitry

Medvedev) who ended up running massive statecompanies, in addition to their administration jobs.Kasyanov saw this as proof that ‘Putin was driftingaway from liberal approaches, towards acommand economy’.17 Out of government,Kasyanov went on to become a leading oppositionfigure, and one with much credibility, havingworked side-by-side with Putin for three years –and having considered him initially a reformer.

Next to go was Putin’s economics adviser,Andrei Illarionov – the man he had taken ondespite his views on the futility and brutality of theChechen campaign. Illarionov walked out inDecember 2005 after five years with Putin,delivering a devastating verdict on the countryRussia had become. The country was no longerfree and democratic, he said, but run by statecorporations acting in their own interests. Untilrecently, he said, he could express his viewsfreely, but now the political and economic systemin Russia had changed, and he could no longer stayin post.

In the year following the arrest of Mikhail

Khodorkovsky, the siloviki moved to grab hisassets for themselves, even before he was foundguilty of anything. The sell-off of his oil companyYukos to the state was accomplished in astunningly cynical way. Claiming that it was owedmore than $27 billion by Yukos, the governmentarranged an auction on 19 December 2004 to selloff the company’s main production unit,Yuganskneftegaz, to cover the tax claim. The stategas monopoly Gazprom registered to participate inthe auction through a new oil subsidiary, GazpromNeft. So did a company called Baikal FinanceGroup, which had only been created on 6December. Its registered office was at an addressused by a vodka shop, a mobile phone operatorand a travel agency in the city of Tver, north ofMoscow. Who its owners were, no one knew.Nonetheless it secured a massive loan from thestate-owned Sberbank in order to participate in theauction. On the day, Gazprom Neft declined toplace a bid, leaving the obscure Baikal FinanceGroup to buy Russia’s largest oil company for $9.3billion.

Two days later, on a visit to Germany, Putindeclared with a breathtaking pretence of innocencethat the shareholders of Baikal Finance Groupwere ‘people who have been in the energybusiness for many years’, and that ‘as I have beeninformed, they intend to develop some sort ofrelationship with other energy companies inRussia, which are interested in this stock’. Hedidn’t know which companies they might be, ofcourse, but ‘state companies have the same right asother players in the market’.

At his annual press conference on 23 December,Putin couldn’t quite remember the name ‘BaikalFinance Group’ any more. That day it had beenbought in its entirety by none other than IgorSechin’s Rosneft. Sechin, it is thought, was thefounder of the mysterious and short-lived BaikalFinance Group. ‘Today, the state, using absolutelylegal, market mechanisms, is ensuring its interests,’said Putin. ‘I consider this perfectly normal.’

Meanwhile the trial continued of the man whohad built Yukos into an oil giant in the first place.In May 2005 Mikhail Khodorkovsky was found

guilty of fraud and sentenced to nine years in jail.

The energy weaponWestern governments – and Western investors –watched these events unfold with some trepidation.But there was worse to come. The repercussions ofthe Orange Revolution were far from over.

The new Ukrainian president, ViktorYushchenko, headed straight for Moscow on 24January 2005, the day after his inauguration, andPresident Putin seemed to appreciate it. When theUkrainian referred to Russia as a ‘permanentstrategic partner’, Putin noted, with a hint ofsurprise, ‘What you just said about strategicpartnership is a very good and very pleasant sign.’

Nonetheless it was a meeting without smiles.Yushchenko felt misunderstood. He said in aninterview: ‘My major concern was that all thesteps we were taking, especially when it came toour democratic reforms, or the revival of ourhistory, or the integration of Ukraine into the rest ofthe civilised world – Russia took all of these as

anti-Russian steps.’18

It was a perfunctory visit, lasting only half aday. Then Yushchenko headed straight forStrasbourg to the Council of Europe, and toBrussels for a speech to the European Parliament.When he went to Washington in April he wasreceived as a hero. He earned rapturous applausewhen he told Congress: ‘Today Ukraine is lookinginto the future with great hope and expectation.Free and fair elections have brought to state officea new generation of politicians not encumberedwith the mentality of the Soviet past.’

Then he was taken to the Oval Office to meetGeorge W. Bush. The president’s chief Ukraineadviser, Damon Wilson, recalled in an interviewthat Yushchenko seemed to lack focus. ‘He beganthe conversation by discussing the challenges hewas facing as president of Ukraine, in particularthe relationship with Russia. He began to set out, Ithink it may have been 12 points or so, a wholeseries of particular issues that he saw he needed towork through with Russia. And as he began toenumerate these challenges in a rather longwinded

way, President Bush stopped him. He said, youdon’t need to worry about these 12 challenges, youhave one challenge you need to be concerned aboutwith Russia – is Moscow prepared to see anindependent sovereign democratic Ukraine makedecisions about its own future? That’s the strategicchallenge you face.’19

Wilson says the Americans were rather worriedafter that first visit. ‘We were quite concernedwhether he understood the scale of the task beforehim – whether he understood how to go aboutaddressing these issues. And, you know, whilethere was still a lot of enthusiasm and a lot ofsupport, and a commitment in policy terms tofigure out how to help him succeed in his task, hisvisit to Washington really did raise the first alarmbells – that we might have more difficulty than wethought, and how he could follow through on thepromise of the Orange Revolution.’

The alarm bells rang louder at the end of theyear when Yushchenko surprisingly struck a shadydeal that the Americans thought stank of corruption,in order to dig himself out of a major crisis over

Russian gas imports.The first of Putin’s ‘gas wars’ began in March

2005, when the Russians apparently decided topunish the Ukrainians for their Orange Revolutionby announcing that, from the following January,Gazprom would more than quadruple the price ofits exports to Ukraine from $50 per 1,000 cubicmetres to around $225. The situation wascomplicated by the fact that Gazprom also supplied25 per cent of the European Union’s gas, mainlythrough pipelines crossing Ukraine, for which Kievcharged Gazprom transit fees. (Some countriesrelied 100 per cent on Russian supplies throughUkraine.) Russia supplied gas to all its formerSoviet republics at prices far below world levels.But now that Ukraine was snubbing it anddeclaring itself to be allied with the West,Moscow saw no reason to continue to subsidise it.

In October Yushchenko’s chief of staff, OlehRybachuk, was summoned to Moscow and given astern warning: agree to the price hike, or your gaswill be turned off. ‘Putin was warning us that thisisn’t a threat, we’re not bluffing,’ Rybachuk

recalls. ‘If we don’t do a deal by 1 January, oursupplies will be cut.’20

Two days before the deadline, Putin offered asolution: a Russian commercial loan worth $3.6billion to enable Ukraine to adjust to the newprice. Yushchenko turned it down. On New Year’sEve, Putin made another last-minute offer: a three-month price freeze if Kiev would agree to thehigher price after that. Yushchenko said he wouldpay no more than $80. Early on New Year’s Day,Gazprom engineers turned the taps on the pipelinesentering Ukraine, and the gas stopped flowing.

It stopped flowing to Europe too. Hungary andPoland quickly saw their supplies disrupted. Theexport pipelines should not have been affected, butGazprom claimed the Ukrainians were stealingsupplies from the transit routes to make up for theshortfall in its own deliveries. Europeangovernments were livid. Moscow claimed it hadno choice, that it was a commercial dispute. Butthe West saw it as a strong-arm tactic, retributionfor Kiev’s display of independence.

The European Commission summoned ministers

back from their Christmas holiday to an emergencymeeting on 4 January. But before they met it wassuddenly announced that the Russian and Ukrainianpresidents had reached a deal. On the face of it, theagreement was a decent compromise: Ukraineagreed to pay the market rate for Russian gas, butGazprom would also sell it much cheaper gas fromTurkmenistan, bringing the overall price down to$95 per 1,000 cubic metres; to sugar the pillGazprom would also pay 47 per cent more toUkraine for transporting gas to Europe.

The West’s new worries arose because all thegas would now be sold not directly by Gazprombut by a murky Swiss-registered trading companycalled Rosukrenergo, which was half-owned byGazprom, partly owned by two shady Ukrainianbusinessmen. Rosukrenergo’s creation in July 2004was overseen by Putin and ex-President Kuchma ofUkraine. Western observers could not understandwhy Yushchenko had now got involved with it.

The American ambassador John Herbst recalls:‘The Ukrainians came in and described the deal.And I was dumbfounded. My German colleague

and my other European colleagues were alldumbfounded. Because again we thought that theUkrainians had a reasonable negotiating positionand a reasonably strong one. And the result wasless than optimal, to be diplomatic.’21

Damon Wilson described the consternation backin Washington: ‘Here we are with a president whopresides over a deal with Russia that introducesRosukrenergo, an intermediary with all sorts ofshady transactions and dealings, in a process that,it became increasingly clear to us, was a vehiclefor facilitating side payments, facilitating the worstof business practices in Ukraine. This wascorruption at the heart of the Orange Government.’

Yushchenko’s chief of staff, Rybachuk,conceded it was a controversial deal, but they hadno choice: ‘Yushchenko’s position was: Putin ispresident; yes I understand that gas is a dirtybusiness but we can’t do business with Russia inany other way.’

So now Washington and Europe found theirdreams fading. The Ukrainian democrat they hadchampioned was proving to be decidedly flaky.

Wilson described it as a moment ofdisillusionment, of realisation that old habits werestill strong in the “new Ukraine’. And in Moscow,Putin had demonstrated his willingness to use aweapon never tried before – energy supplies.Those few days of gas cuts in early January causedimmense nervousness throughout Europe andtriggered a radical rethink of the EU’s energypolicies. From now on, Vladimir Putin was not aman the West enjoyed doing business with.

8

A NEW COLD WAR

Tempers get frayedNow a spiral of disenchantment began to wreckrelations between Washington and Moscow – andeven between the ‘friends’, Bush and Putin, each ofwhom began to accuse the other of bad faith. At abad-tempered summit in the capital of Slovakia,Bratislava, in February 2005 (just after the OrangeRevolution), Putin pulled a pack of 3-by-5 cardsfrom his inside jacket pocket – the Americanscalled them his ‘grievance cards’ – and beganlecturing Bush about ... well, about how fed up he

was being lectured to by the Americans. The rantwent something like this: We’ve done everythingwe can to accommodate you, we supported you inthe war on terror, we closed down bases, we letyou destroy the ABM treaty without making a bigfuss, we didn’t even let Iraq get between us, andwhat did we get in return? Nothing. You haven’tabolished Jackson-Vanik, you keep moving thegoalposts on our WTO entry, you don’t even ratifythe Conventional Forces in Europe arms controltreaty, you want to build a missile shield thatmakes us vulnerable, and you’re trying to bring allour neighbours into NATO. Instead of praise forour policies aimed at reforming our economy andtying it into the world system, all we hear arecomplaints about our internal affairs – about humanrights, about our supposed ‘backsliding’ ondemocracy, about Chechnya, about our media,about Khodorkovsky. When will it end?

Bush’s new national security adviser, StephenHadley, recalled that this was ‘probably thetestiest meeting the two leaders had had’.1 It washere that Putin tried to turn the tables on Bush by

claiming that America did not have a free press –as witnessed by the fact that Bush had allegedlyhad CBS’s senior news anchor Dan Rather firedfor criticising him.2 Bush tried to explain that thiswas not the case, but Putin was in no mood tolisten. Instead, he hit back on Americandemocracy, too. The American people did notelect their president, Putin asserted, but anelectoral college did. Bush replied: ‘Vladimir,don’t say that publicly whatever you do. You willjust show everyone you don’t understand oursystem at all.’

Three months later there was a chance forreconciliation. Putin invited a host of worldleaders to Moscow on 9 May to celebrate the 60thanniversary of the Allies’ victory over NaziGermany. For the first time, an American presidentstood on the reviewing stand to observe a Soviet-style display of military might on Red Square.Putin appreciated the gesture (President Clintonhad boycotted a similar parade ten years earlier inprotest at the first Chechen war), but he did notlike what went before or after it.

On his way to Moscow Bush had stopped inRiga, the capital of Latvia, where he sided fullywith the Baltic nation’s interpretation of post-warhistory – namely, that the liberating Soviet armyhad overstayed its welcome and become anoccupation force, replacing Nazi rule with anothertotalitarian regime. Soviet oppression in Europe,said Bush, was ‘one of the greatest wrongs ofhistory’. The fact that the Baltic nations perceivedSoviet ‘liberation’ as occupation is a truth theRussian government finds very hard to stomach,because, it claims, it insults the memory of Sovietservicemen who fought to free the country from theNazis.

Even worse than his interpretation of the pastwas Bush’s gloss on the present. From Moscow heflew straight to Tbilisi, where the Georgians laidon a hero’s welcome and Bush reciprocated bycalling the country a ‘beacon of liberty for thisregion and the world’ and apparently urging otherformer Soviet states to follow suit. He praisedGeorgia for providing troops in Afghanistan andIraq, and proclaimed: ‘Your courage is inspiring

democratic reformers and sending a message thatechoes across the world – freedom will be thefuture of every nation and every people on earth.’The words caused fury in the Kremlin, which wasat that very moment tightening the screws onGeorgia – banning imports of its world-famouswines and mineral waters on ‘health grounds’.

As 2005 progressed, and the West watchedpowerless as Putin curtailed democracy, createdNashi, cracked down on NGOs and turned off gassupplies to Ukraine, the rhetoric on both sidespeaked. In early May 2006 Vice-President DickCheney travelled to another former Soviet Balticrepublic, Lithuania, with the express purpose ofdelivering another broadside at Russia – one thatwas intended to be seen not as a wayward attackby a sometimes off-message vice-president, but asthe considered view of the administration. DamonWilson, at the National Security Council in theWhite House, explained: ‘We knew that this wouldbe an important opportunity to continue to echo thepresident’s messages about the freedom agenda.There was a tendency often in Moscow to discount

what Vice-President Cheney said, to say, this isVice-President Cheney, we all know he’s radical,he’s the neocon in the administration, but at the endof the day, we’re doing business with PresidentBush. And so we worked very closely with thevice-president’s office and his speech writers tomake sure that this wasn’t Vice-President Cheneyout on a limb. We prepared a speech that wasactually well vetted, very much circulated in theInteragency, delivering key messages on thedemocracy front, pretty tough-hitting words onwhat was happening in Russia.’3

Cheney delivered a paean to freedom and thespread of democracy, and let loose at the Putinregime:

In many areas of civil society – from religion and thenews media, to advocacy groups and political parties– the government has unfairly and improperlyrestricted the rights of her people. Other actions bythe Russian government have been counterproductive,and could begin to affect relations with othercountries. No legitimate interest is served when oiland gas become tools of intimidation or blackmail,

either by supply manipulation or attempts tomonopolise transportation. And no one can justifyactions that undermine the territorial integrity of aneighbour, or interfere with democratic movements.

He called on Russia to return to democraticreform, and become a ‘trusted friend’ by sharingthe Western values: ‘We will make the case,clearly and confidently, that Russia has nothing tofear and everything to gain from having strong,stable democracies on its borders, and that byaligning with the West, Russia joins all of us on acourse to prosperity and greatness.’ In a flagrantdisplay of double standards, Cheney then flew toKazakhstan where he praised the Putinesquedictatorship of President Nursultan Nazarbayev,expressing his ‘admiration for what has transpiredhere in Kazakhstan over the past 15 years, both interms of economic development as well aspolitical development.’

It was not the sort of thing that Vladimir Putincould let pass without comment. Six days later, inan address to parliament, he made a cryptic remarkthat left the Americans scratching their heads,

although its target was clear. During a longpassage devoted to the importance of the military,he snarled: ‘We can see what’s going on in theworld. We can see it! As they say, “Comrade Wolfknows who to eat.” He keeps on eating, and listensto nobody. And apparently doesn’t intend tolisten.’

The Russian foreign minister, Sergei Lavrov,traditionally suave and restrained, lost his cool attalks in the Waldorf Astoria Hotel in New York.The meeting was about Iran, which the USsuspected was trying to build a nuclear weaponscapability by developing civilian technologyprovided by the Russians. The previous yearRussia agreed to join a troika of EU nations (theUK, France and Germany) plus the United Statesand China in elaborating a joint approach. At onepoint Moscow had helpfully suggested that it couldenrich fuel for Iran’s as yet uncompleted Bushehrpower station and have it shipped back to Russia.But in April 2006 the Russians announced the saleof an advanced air-defence system to Iran,infuriating the Americans.

Now, at the Waldorf, the six foreign ministers ofthe Iran group were exploring the possibility ofsanctions against Iran. But after Cheney’s Vilniusspeech the gloves were off. Condoleezza Rice andher political director Nicholas Burns faced anincreasingly agitated Lavrov across the dinnertable. Burns recalls: ‘Ordinarily in diplomacypeople are polite to each other. And they don’tpersonalise things. But at some point, midwaythrough the dinner, Lavrov became very red in theface and very angry, and kind of pounded on thetable and attacked me over public statements I hadmade, objecting to Russia’s arms sales to Iran.’Lavrov invoked Cheney’s speech and demandedthat the Americans keep their criticisms tothemselves. Burns was about to respond in kind,and Rice had to grip his arm to calm him.4

Such was the fraught atmosphere when thesimmering conflict between Georgia and Russiaerupted into violence. In September 2006 SouthOssetian forces fired on a military helicoptercarrying Georgia’s defence minister, IrakliOkruashvili, causing him to make an emergency

landing. Okruashvili had earlier promised tocelebrate the following New Year in the SouthOssetian capital Tskhinvali – in other words, toaccomplish the reincorporation of the region intoGeorgia by the end of 2006. Skirmishes broke outbetween Russian-armed South Ossetian soldiersand American-trained Georgians. Then, at the endof the month, Georgia arrested four Russianofficers and accused them of espionage.International mediators were brought in, and after afew days the Russians were released – but notbefore they were paraded in front of televisioncameras, handcuffed and escorted by femaleGeorgian police.

‘The message of Georgia to our great neighbourRussia,’ Saakashvili proclaimed, ‘is: enough isenough.’

The Russians took it as a deliberate humiliationand retaliated with the harshest of sanctions: theyrecalled their ambassador, and cut all rail, sea,road, air and postal links. Georgians living inMoscow began to feel the heat: hundreds whocould not produce legitimate papers were rounded

up and put on planes bound for Tbilisi; schoolswere asked to provide lists of children withGeorgian-sounding names so that the authoritiescould investigate whether they were illegalimmigrants.

Murder of Anna PolitkovskayaWestern governments were only getting into theirstride with criticism of Russia’s démarche againstGeorgia when something much more shockinghappened. On 7 October 2006, Putin’s 54thbirthday, the journalist Anna Politkovskaya –known around the world for her bold reportingfrom Chechnya and criticism of the Kremlin – wasshot dead in the lift of her apartment block inMoscow. The murder stunned people around theworld – but not, apparently, Vladimir Putin. Atfirst he gave no reaction at all. Then, four dayslater during a trip to Germany, he finallyresponded to a reporter’s question by dismissingher as essentially unimportant.

It was, he said, ‘a disgustingly cruel crime’ and

her killers should not go unpunished. But he added:‘Her impact on Russian political life was onlyvery slight. She was well known in the mediacommunity, in human rights circles and in the West,but her influence on political life within Russiawas very minimal. The murder of someone likeher, the brutal murder of a woman and mother, wasin itself an act directed against our country andagainst the Russian authorities. This murder dealsa far greater blow to the authorities in Russia, andin Chechnya, to which she devoted much of herrecent professional work, than did any of herpublications.’ It was one of Putin’s more grotesqueutterances: Politkovskaya’s death, he was saying,was actually aimed against him, and would have agreater effect than her insignificant writings had.He lamented the murder of ‘a woman and mother’,not of the journalist.

I once asked his spokesman, Dmitry Peskov,whether Putin had read much of Politkovskaya’swork. ‘No,’ he replied, shaking his head as if tounderline that she wasn’t worth reading. But it ishard to believe that Putin did not know of her

work. She worked for the most prominentopposition newspaper, Novaya gazeta, co-ownedby ex-President Mikhail Gorbachev. Her articlescontained stinging criticism of human rights abusesin Russia and particularly of Putin’s war inChechnya. She had negotiated with the hostage-takers in the Dubrovka theatre crisis, and mighthave done the same during the Beslan school siegehad she not been poisoned on the plane as she flewdown from Moscow (another unexplained crime).Leaders of other countries condemned her murderand demanded a thorough investigation. The StateDepartment described her as ‘personallycourageous and committed to seeking justice evenin the face of previous death threats’.

Yet the Kremlin was unmoved.Suspicions automatically fell on the leadership

of Chechnya, and specifically its prime minister,Ramzan Kadyrov, whom Politkovskaya hadfiercely criticised for human rights abuses. Somespeculated that people loyal to him might havekilled her for revenge, others that his enemieskilled her to cast suspicion on him.

Kadyrov became prime minister of Chechnya,and later president, following the assassination ofhis father, Akhmat Kadyrov, whom Putin hadinstalled as a pro-Russian president by means of arigged election in 2003. Both had previously beenon the rebel side – the elder Kadyrov was themufti, or religious leader, of Chechnya under itsseparatist leader, Dzhokhar Dudayev, and had evencalled for a jihad against Russia. I once had teawith him in a house in rebel-held Chechnya in1995. I recall that he asked rather disarminglywhether the British people were generallyconverting to Islam. The Kadyrovs later reversedtheir anti-Russian stance, however, and supportedthe war launched by Putin against the insurgents in1999. Ramzan’s militia, known as kadyrovtsi orKadyrovites, acquired an unsavoury reputation –accused of torture, abductions and murders.Moscow installed first Akhmat, then Ramzan, as‘quisling’ leaders – Chechens loyal to Moscow –under a new strategy to pacify the republic.

In the wake of the Chechen terrorist attack on theschool in Beslan, the Kremlin deputy chief of staff,

Vladislav Surkov, gave this explanation ofRussia’s strategy towards Chechnya: ‘The solutionis complex and hard. And we have begun to put itinto practice. It entails the active socialisation ofthe northern Caucasus, the gradual creation ofdemocratic institutions and the foundations of civilsociety, of an effective system of law and order,and of industrial capacity and social infrastructure,the overcoming of mass unemployment, corruptionand the collapse of culture and education.’ Inreality, Kremlin policy amounted to the surrenderof the republic to the loyal Ramzan Kadyrov,allowing him to enrich himself and run the place ashe pleased so long as it was kept inside theRussian Federation. Kadyrov professes ‘love’ forPutin and calls him his ‘idol’. He renamed themain street in Grozny, the capital, Putin Avenue.

The strategy has been partially successful.Despite the continuation of terrorist atrocities,mainly outside of Chechnya, by the remainingIslamic rebels, Kadyrov has restored a semblanceof order within the republic. Grozny, totallydestroyed in the two wars, has been largely rebuilt,

using petrodollars thrown at it from Moscow. Itboasts Europe’s largest mosque. It has normalshops and cafés again – something I thought Iwould never see when I reported from thebombed-out city in the late 1990s. But the strategyis a double-edged sword for Putin. The muscular,bearded Kadyrov is a wayward and ruthlessindividual. I visited his palace outside the villageof Tsentoroy in 2008 and got a taste of his fabulouswealth – the grounds include an artificial lake anda zoo with panthers and leopards – and hisprimitive way of thinking. Asked what he thoughtabout the death of the rebel leader ShamilBasayev, the mastermind behind most of the recentterrorist attacks in Russia, Kadyrov replied: ‘I wasdelighted when I heard he was killed ... and thensad, because I wanted to kill him with my ownhands.’ He has introduced elements of Sharia lawin his fiefdom, and congratulated men who sprayedpaintballs at women who appeared in public withtheir heads uncovered.

American diplomats attending a riotous weddingreception in Dagestan in August 2006 witnessed

Kadyrov, the guest of honour, dancing with a gold-plated pistol stuck down the back of his jeans andshowering dancing children with hundred-dollarbills.5

True to Chechen tradition, Kadyrov is quick topromise retribution and blood vengeance on hisenemies. On his watch many opponents havedisappeared. His former bodyguard, UmarIsrailov, who went public about torture andkillings by the Kadyrovites that he had witnessed,was shot dead in Vienna in January 2009. Sixmonths later Natalya Estemirova, who worked forthe Memorial human rights centre in Grozny, wasabducted and murdered. Kadyrov described her asa woman ‘without honour, dignity or conscience’.As for Anna Politkovskaya, in 2004 she publishedan account of a terrifying meeting with RamzanKadyrov, during which he boasted that his hobbieswere fighting and women. The interview includedthe following comical exchange:

‘What kind of education do you have?’‘Higher. Law. I’m graduating soon, sitting my

exams.’

‘What kind of exams?’‘What do you mean, what kind? Exams, that’s

all.’‘What’s the name of the college you are

graduating from?’‘A branch of the Moscow Business Institute, in

Gudermes. The law faculty.’‘What are you specialising in?‘I’m a lawyer.’‘But is your diploma in criminal law, civil law

...?’‘I can’t remember. I wrote something, but I’ve

forgotten. There’s a lot of events going on.’Kadyrov was later made an honorary member of

the Russian Academy of Natural Sciences.Politkovskaya was taken back to see him again

the next morning, and found him with a Kadyrovitein a black T-shirt who snarled at her: ‘You shouldhave been shot back in Moscow, in the street, theway they do it in Moscow.’ And Kadyrov chimedin: ‘You’re an enemy. You should be shot.’

Politkovskaya described him as a ‘baby dragon,raised by the Kremlin. Now they need to feed him.

Otherwise he will set everything on fire.’ She wasabout to publish another article about human rightsabuses and torture in Chechnya when she waskilled.

Her murder took place not only on Putin’sbirthday but two days after Kadyrov’s. (I know thisbecause I happened to be sitting next to Putin’sspokesman, Dmitry Peskov, in a Moscowrestaurant that evening, when he took out hismobile phone and called ‘Ramzan’ to congratulatehim fulsomely on turning 30.) Could the murderhave been someone’s slightly belated ‘birthdaypresent’ to the Chechen strongman? Or could ithave been Kadyrov’s gift to his ‘idol’, Putin? InRussia’s criminal underworld, such an idea is notimplausible. Or was the murder designed todiscredit one or other of them? Or was there someother motive? One thing was clear: the Kremlinwas intensely annoyed by Politkovskaya’s work –particularly some of her more extravagant claims,such as her assertion that the 2002 Moscow theatresiege, which ended with 130 deaths, was stage-managed by one of Russia’s secret services.

Prosecutors brought three Chechens to trial, butthey were acquitted in 2009 for lack of evidence.A retrial was later ordered, and a fourth man,accused of being the actual assassin, was arrested.In August 2011 a former police officer, Lt. Col.Dmitry Pavlyuchenkov, who had appeared as awitness in the earlier trial, was charged withplotting the murder. As for who might havecommissioned the crime – the courts have not evencome close to establishing that.

It’s our oilRussia faced more criticism during 2006 as Putinand the siloviki moved to assert greater controlover the country’s energy resources, some ofwhich belonged to foreign companies. We sawearlier that the prospect of Yukos selling out to anAmerican oil major was one of the factors thatprompted the arrest of Khodorkovsky and thenationalisation of his assets. Now Putin turned hisattention to so-called Production SharingAgreements which Boris Yeltsin had signed with

Western oil companies. Under a PSA, the foreigncompany finances all the development andexploration, and when the oil or gas comes onstream it is allowed to keep the first revenues torecoup its costs; after that the profits are shared (inagreed proportions) by the government and thecompany.

Putin believed these were humiliatingagreements, the kind of deal a Third World countryenters into because it doesn’t have the skills orknowhow to extract the oil itself. The first PSA,signed in 1994, was known as Sakhalin-2: aconsortium called Sakhalin Energy, comprisingRoyal Dutch Shell (55 per cent) and two Japanesecompanies, Mitsui and Mitsubishi, was developinghuge oil and gas fields near the island of Sakhalinin Russia’s far east. The development costsforeseen in the agreement came to $10 billion, sothis was the sum that Shell and its partners wouldbe able to recover from the first sales before anyrevenues would begin to flow to the Russian state.

In 2005, however, Shell revealed that thedevelopment costs had doubled, to $20 billion. On

a visit to the Netherlands in November, Putin ‘gavea roasting’ to Shell’s CEO, Jeroen van der Veer. Itmeant Russia was going to lose $10 billion. It gavePutin the excuse he needed to overturn the 12-year-old deal, which he did by means of plotting andpressuring over the course of 2006. Instrumental tothe government’s strategy was Oleg Mitvol, afierce environmental activist who was deputy headof the government’s Service for Supervision ofNatural Resources, Rosprirodnadzor. In May 2006the service’s representatives from the far eastregion came to see Mitvol in Moscow and showedhim some photographs. ‘It was unbelievable,’ herecalls. ‘There were photos of forests that hadbeen turfed upside down, landslips, total chaos, ona huge scale. I said to them, “What is this?” andthey said, it’s Sakhalin Energy buildingpipelines.’6 The construction work included almosta thousand pipes laid across spawning rivers,preventing fish from swimming upstream.

Mitvol made it a personal crusade. He tookjournalists to Sakhalin to show them the damage.Rosprirodnadzor estimated it would cost $50

billion just to clean up Aniva Bay, where large-scale dredging had ruined fishing grounds(something denied by Shell).

It was assumed by most observers at the timethat Mitvol was simply doing the government’sbidding, digging up dirt to bolster its case againstShell. The press called him the Kremlin’s ‘attackdog’. But he insists that he was motivated entirelyby environmental concerns and worked moreclosely with Greenpeace and other environmentalgroups than with the Kremlin. He even says he hada call at one point from a ‘very high official’ whowas concerned he was being too strident in hiscriticisms, and ‘spoiling the investment climate’.Other environmentalists I have spoken to say theybelieve this: they too were appalled by the damagedone to the forests and marine life, and they knewMitvol to be a real eco-warrior, who, among otherachievements, also helped to persuade Putin to banseal-hunting.

That said, Mitvol could never have waged sucha campaign against a major foreign investorwithout top-level backing, and Shell’s position

became impossible. In December Sakhalin Energybuckled to the pressure and sold 51 per cent of theproject to Gazprom. Putin had succeeded inrenationalising the world’s biggest combined oiland natural gas project. At the signing ceremony,the president declared that the environmentalproblems could now be considered ‘resolved’.The Sakhalin crisis was over, but the Kremlin’sstrong-arm tactics caused long-term damage toRussia’s efforts to woo foreign investors.

For Putin, this was just part of a strategy, aimedat ensuring that Russia’s strategic energy resourcesremained, or were retaken, under state control.Foreign companies were welcome to participate injoint projects, but Russia would never again giveaway its resources as Yeltsin had so recklesslydone. New legislation was drafted to limit non-Russian involvement in 42 industries, includingarms and aircraft, fisheries, precious metals andhydrocarbons.

Putin was less squeamish about other countries’strategic assets. As oil prices rose and theKremlin’s coffers filled up with petro-dollars,

Russia started looking to invest abroad. Gazpromshowed an interest in buying Centrica, Britain’smajor gas supplier. Then it began talks onacquiring a 50 per cent stake in the CentralEuropean Gas Hub at Baumgarten in Austria – themain distribution centre for EU gas supplies. TheEuropean Commission blocked the move.

In September 2006 it become known that thestate-controlled bank VTB had quietly bought a 5per cent stake in EADS, the world’s biggestaerospace company, producer of Airbus and agreat deal of defence equipment. Putin’sdiplomatic adviser Sergei Prikhodko thensuggested they would like more – perhaps 25 percent, enough to block major decisions. WhenAngela Merkel heard about it she told PresidentChirac of France in no uncertain terms that thiscould not be allowed to happen. Chirac andMerkel met Putin at Compiègne, outside Paris,towards the end of September and told him thiswas one investment that was not welcome.

On a visit to Bavaria the following month, Putinmocked the West for its nervousness: ‘Why the

hysteria? It’s not the Red Army coming, butRussian businesses with money to invest.’

A Cold War encounterIt was Saturday 21 October 2006. The last,yellowing leaves were falling from the birch treesoutside Putin’s window at his country residence,Novo-Ogaryovo. It was cold and raining. He wasalready in a foul mood. The previous day he hadattended a summit with 25 European Union leadersin Lahti, Finland. It was supposed to be an‘informal’ meeting, a cosy gathering with no setagenda or agreements to be signed, but nonethelesshe had had to listen to a litany of complaints –about the murder of Anna Politkovskaya, about hisgovernment’s attempts to squeeze Shell out of themulti-billion-dollar Sakhalin-2 project, aboutRussia’s unreliability as an energy provider, andabout Georgia.

The Europeans explained that they were keen tobuild a close partnership with Russia’s southernneighbour and deplored the sanctions recently

introduced by the Kremlin. But Putin expounded atsome length his view that President Saakashviliwas hell-bent on regaining the breakaway regionsof Abkhazia and South Ossetia, and warned themthat this would lead to bloodshed. Only his friendJacques Chirac supported him, telling the othersthat relations with Russia were more importantthan Georgia.

It was the middle of the night before Putin gothome. On Saturday afternoon he called his 11 mostpowerful colleagues – his Security Council – to hisresidence. He told them about his uncomfortablemeeting with the EU leaders, and they consideredtheir options in Georgia. Putin also had anappointment with the US secretary of state,Condoleezza Rice, who was waiting at her hotel inMoscow, but he was not looking forward to it. ‘Hedidn’t feel like meeting her,’ one of his close aidesrecalls, ‘but he knew he had to.’

Rice was wondering why their meeting was sodelayed. ‘Usually he saw me right away, unless hewanted to make a point,’ she said later.7

After their working session the members of the

Security Council drove to a nearby governmentlodge – a baronial-style chateau at Barvikha – fora special dinner. Three members, including thesecurity council secretary, Igor Ivanov, and thefuture president, Dmitry Medvedev, had recentbirthdays to celebrate.

Here, Putin decided to play a ‘joke’ on Rice.According to one of those present, he looked at hiswatch, and a mischievous smile appeared on hisface. ‘Why do we have to wind things up in a rush?Let’s put on a little show for her. If she wants, tellher I will meet her here, but don’t tell her I’ve gotthe entire Security Council with me.’

‘It was five o’clock, five-thirty, six o’clock, six-thirty,’ Rice recalls. ‘Finally about seven-thirtythey said, he’s ready to see you now.’

She and the American ambassador, Bill Burns,were whisked out into the dark, wet countryside,along the elite Rublyovo-Uspenskoye highway,dotted with ostentatious redbrick mansions,through the ‘Luxury Village of Barvikha’ with itsLamborghini showroom and designer boutiques,and then through the tall iron gates of the

government estate.Rice and Burns had never seen such a building

in Russia before – all turrets and dark stairways,like Dracula’s castle. Suddenly the doors of thedining room were flung open and the Americanswere confronted with an unexpected sight – the fullRussian Security Council, the very heart of Russianpower, around a banquet table. Burns ‘couldhardly take breath’, according to one witness,while Condi was full of composure. ‘Oh,’ shesaid, ‘it’s the Security Council.’

The Russians appreciated her sang-froid. ‘Shewasn’t even an iron woman – much higher,’ said aPutin aide.

Her old friend Sergei Ivanov joked to her: ‘Weare discussing top-secret matters. Here’s sometop-secret military intelligence documents. Wouldyou like to see them, Condoleezza?’ There wasmuch laughter – and some raised eyebrows on theAmerican side when the Russians brought outbottles of Georgian wine. This was just after thearrest of the Russian officers and the embargo onGeorgian products. The Russians started telling

crude jokes about Georgians – which Rice couldunderstand, despite the interpreter’s attempts toclean them up.

After a while, Rice said to Putin: ‘You know,we have some work to do.’

Putin took his guests off to a side room, withdefence minister Sergei Ivanov and the foreignminister Sergei Lavrov, who acted as interpreter.Here, the talk got serious.

Putin started lecturing Rice about Ukraine, itshistory and demographics, and why America waswrong to even contemplate bringing it into NATO.Ivanov recalled in an interview: ‘Putin explainedwhat Ukraine was – at least a third of thepopulation are ethnic Russians – and the negativeconsequences that could arise, not only for us butfor all of Europe if Ukraine and Georgia weredragged into NATO.’

According to Bill Burns, Rice retorted thatsovereign states had the right to make theirsovereign choices about which institutions oralliances they wished to belong to, and that thisshould not be seen as threatening.

But Putin was not at all persuaded by that. ‘Youdo not understand what you are doing,’ he said.‘You are playing with fire.’

Then the ‘lecture’ turned to the recent events inGeorgia, and Rice decided to give as good as shegot. ‘President Bush has told me to come and saythat if Russia does anything in Georgia, there willbe a rupture in US–Russia relations.’

Ambassador Burns recalls that Putin’s answerwas unmistakable: if Georgian provocationscaused a security problem, Russia would respond.Rice could feel Putin’s tone turning hard-edged.

All of a sudden Putin stood up, looking angryand intimidating. Reflexively, Rice also stood up,and in her high heels she was now taller than theRussian, looking down at him. She remembers it as‘not a nice moment – probably the toughest momentbetween the two of us’.

Putin decided to tell it straight. ‘If they [theGeorgians] provoke any violence,’ he said, ‘therewill be consequences! And you tell that to yourpresident.’

Lavrov, interpreting, did not translate the last

phrase, but Rice had understood. This was aforceful warning from an angry Putin – one that shewould remember clearly two years later whenRussia brought down the might of its armed forceson Georgia after Saakashvili launched an ill-conceived attack on South Ossetia.

A Cold War murderThere is, perhaps, no enemy more hateful to theKGB than one of their own who turns against them.Forgiveness for disloyalty is not something theyteach their agents.

Alexander Litvinenko was an officer in theSoviet KGB and its successor, the FSB. In the1990s he specialised in counter-terrorism andfighting organised crime. After service inChechnya he was assigned to a new FSB unitcalled URPO, the Directorate for the Analysis andSuppression of Criminal Organisations, which ineffect consisted of hit squads designed to take outthe country’s top mafia crime bosses. ButLitvinenko became aware of corruption and links

to organised crime in the organisation itself andbegan to rebel. In March 1998 he confided to theoligarch Boris Berezovsky that he and four otheragents from his unit had been ordered to kill him.(Berezovsky at the time was the ultimate wheeler-dealer in the Kremlin, who had engineered BorisYeltsin’s re-election in 1996 and would soon helpto organise his succession.) When Vladimir Putinwas appointed director of the FSB in July thatyear, Berezovsky immediately took Litvinenko tosee him and report on corruption in theorganisation. According to the oligarch, Putin didnot respond, so on 13 November Berezovsky wentpublic, with an open letter to Putin in thenewspaper Kommersant. Four days laterLitvinenko and his four colleagues from the URPOunit held a press conference at which they madepublic their claim that they had been ordered to killBerezovsky.8 Litvinenko was immediatelydismissed from the FSB, apparently on thepersonal orders of Putin, who told the journalistYelena Tregubova later: ‘Soon after becomingdirector of the FSB I fired Litvinenko and

liquidated the unit in which he worked.’ Hisobjection was not that FSB agents were carryingout extra-judicial killings but that Litvinenko andhis colleagues dared to go public about it. ‘FSBofficers should not stage press conferences. This isnot their job. And they should not make internalscandals public.’9

During 1999 Litvinenko was twice arrested andimprisoned for months, but eventually acquitted. InNovember 2000 he fled to London and applied forpolitical asylum, which he was granted. In Londonhe worked for the now exiled Boris Berezovsky,campaigning against the Putin regime, and inOctober 2006 became a British citizen. Hisactivities in London would have infuriated theRussian government in many ways. First, he wason the payroll of Berezovsky, one of Russia’s mostwanted men, whom the British government refusedto extradite. (He was also alleged to receive aretainer from the British secret intelligenceservice, MI6.) Second, he was totally convinced ofthe complicity of the FSB in the 1999 apartmentbombings which had triggered the second Chechen

war, and published preliminary findings in aRussian newspaper and in a film. As noted earlier,several journalists and politicians whoinvestigated these allegations died in mysteriouscircumstances.

In exile in London, Litvinenko did everything hecould to provoke the Kremlin. His allegationsseemed to grow ever more fantastic and obsessive,perhaps delusional: he accused the FSB not only ofbeing behind Chechen terrorist attacks such as theMoscow theatre siege and the Beslan school crisis,but even of responsibility for terrorist attacksworldwide, including the 2005 London bombings.Even close friends regarded him as a fantasist,consumed by his hatred for Putin and the FSB. Heclaimed, with no proof, that the KGB had trainedal-Qaeda’s number two, Ayman al-Zawahiri, andthat Putin was a paedophile. He developed closelinks to the Chechen separatist government in exileand lived next door to its foreign minister, AkhmedZakayev. After Anna Politkovskaya’s death,Litvinenko gave a presentation to journalists atLondon’s Frontline Club where he condemned

Putin for personally ordering her murder.A couple of weeks later, on 1 November 2006,

Litvinenko met two visitors from Russia – bothformer intelligence officers, Andrei Lugovoi andDmitry Kovtun – and had tea with them. He fell illand died after an excruciating illness on 23November. Investigators established that he hadbeen poisoned with a rare radioactive substance,Polonium-210. A police investigation eventuallyconcluded that the poison had been brought toBritain, possibly by Kovtun via Germany, wheretraces of the element were detected, andadministered by Lugovoi, who had put it inLitvinenko’s tea during their meeting. Theagonising slow death of Litvinenko topped thenews throughout November. Few had heard of theRussian, but as journalists and investigators piecedtogether the story of his poisoning, the Britishpublic was both scandalised by what seemed to bethe enactment of a John le Carré-style plot, andterrified by the discovery of Polonium-210 tracesaround their capital city and on aeroplanes that hadflown from Moscow. The events brought to mind

the KGB’s ‘umbrella-tip’ poisoning of a Bulgarianexile in London in 1978, at the height of the ColdWar. The Daily Mail wrote that the ‘tentacles ofthe KGB reach as far and formidably as ever’. Itwas suddenly remembered that in July 2006 theDuma had passed legislation allowing the securityforces to hunt down and eliminate extremistsworldwide. The definition of ‘extremism’ wasexplicitly widened to include anyone who libelledthe Russian authorities – which Litvinenkocertainly did, in spades.

Gruesome though the situation was, it was alsoexpertly exploited by Berezovsky and his spindoctors, a PR company run by Margaret Thatcher’sformer image-maker, Lord Bell. They released ashocking photograph of Litvinenko on hisdeathbed, hairless and emaciated. Just before hedied Litvinenko signed a statement composed forhim by his friend Alex Goldfarb, who also workedfor Berezovsky, in which he accused VladimirPutin of personally ordering his murder. ‘As I liehere I can distinctly hear the beating of wings ofthe angel of death,’ he wrote, in somewhat over-

elegant English, and continued: ‘You may succeedin silencing one man, but a howl of protest fromaround the world will reverberate, Mr Putin, inyour ears for the rest of your life.’ Berezovskycould scarcely have found a more powerfulweapon in his battle against the Kremlin than thedeath of his protégé.

Putin was in Helsinki, at an EU–Russia summit,the day after Litvinenko’s death, when hisposthumous accusation was read out. Putin, ofcourse, had no option but to answer questionsabout it at a news conference. Just as he had donewith Politkovskaya, he seemed to play downLitvinenko’s importance, saying merely, ‘the deathof a human being is always a tragedy’. Regardingthe personal accusation against him, he dismissedit as a political provocation, probably written byother people. But privately – I was told by hispress secretary Dmitry Peskov, who had to tell himabout the deathbed note – Putin was livid. ‘Hecan’t believe that people are accusing himpersonally of ordering this murder,’ he said. ‘As aperson, he is very upset by that.’ When I asked why

Putin didn’t show that anger in public, since itmight convince people of his innocence better thanhis normal stonewalling, Peskov replied: ‘Hedoesn’t like showing his feelings in public.’

Putin showed his feelings somewhat a few yearslater, though, when he spoke about the agent whobetrayed 11 Russian spies, including thecelebrated Anna Chapman, in the USA in 2010:‘They live by their own laws, and these laws arewell known to all the special services. Thingsalways end badly for traitors. They usually end upin the gutter, from alcohol or drugs.’ Or poisoning,he might have added.

With the polonium trail leading inexorably toMoscow, Litvinenko’s death – less than twomonths since Politkovskaya’s – had a dramaticeffect on Western perceptions of Russia, and inparticular on its relations with the UK. The primeminister Tony Blair, anxious to preserve his goodrelationship with Putin, urged a cautious approach,but some members of his cabinet strongly objectedto the idea of ‘going soft’ on a regime that wasflouting human rights. Blair convened an

emergency session of COBRA, the government’scrisis response committee. Ironically, VladimirPutin himself had once been invited to witness asecurity briefing in the COBRA room at 10Downing Street. That was in October 2005, notlong after the bombings in London. Putin hadshocked his hosts by declaring, according to aneyewitness, ‘We know well how you pursueterrorists, and we are impressed with yourprofessionalism. But when we identify a terrorist,he’s dead.’

In January 2007 British investigators concludedthat Litvinenko’s murder was a ‘state-sponsoredassassination orchestrated by Russian securityservices’, and in May the Foreign Office officiallyasked the Russians to extradite the chief suspect,Andrei Lugovoi. The Russians retorted that theirconstitution does not allow for the extradition ofRussian citizens. The Russians offered to putLugovoi on trial in Russia, but claimed that theevidence provided by the British in theirextradition request was insufficient for them tobase a case on. This was almost certainly true: the

UK authorities were hardly going to hand over alltheir evidence to the Russians, since much of itwas based on their own top-secret intelligencegathering. But without it, the Russians wouldneither extradite Lugovoi nor put him on trial.There was deadlock. Lugovoi used the time tohave himself elected to the Duma, where he wouldenjoy immunity from prosecution. He freely gaveinterviews, in which he blamed Boris Berezovskyfor the murder.

On 28 June 2007 a cabinet reshuffle gaveBritain a new foreign secretary, David Miliband.He spent his first weekend with briefing papersthat shocked him. ‘What I hadn’t quite recognised,’he recalled in an interview, ‘was the rotten state ofAnglo-Russian relations, dating back to Iraq andthen to the whole Berezovsky business, which theRussians saw as a political move by us. So therewas a deep political problem, even without theterrible events of the murder of Litvinenko.’10

A week later the Kremlin turned down Britain’srequest for the extradition of Lugovoi. ‘We had todecide how to respond, and we didn’t want the

Russians to go wildly over the top – we didn’twant to break off diplomatic relations.’ Britainexpelled four Russian diplomats and frozerelations with the FSB, even though that meantcutting off the main channel for collaboration in thefight against international terrorism. It is not clearwhether the British side actually understood this.Russia’s foreign minister, Sergei Lavrov, recalls:‘We had to explain that the FSB, in the RussianFederation, is the lead agency that coordinatesanti-terrorist activities and heads the national anti-terrorism committee. So if cooperation with theFSB was no longer in the plans of our Britishcounterparts, we would have to freeze ourcooperation in that area, and this wasregrettable.’11

Russia expelled four British diplomats inretaliation, and sneered at London’s persistentrequest for extradition. President Putin remindedBritain that ‘30 people are hiding out in Londonwho are wanted by Russian law enforcementagencies for serious crimes – and London does noteven think of extraditing them’. He was sitting, in

classic Putin fashion, in a forest clearing,discussing current affairs with youth activists. Hewent on: ‘They don’t extradite people hiding ontheir own territory, and give insulting advice to ourcountry to change our constitution. They need tochange their brains, not our constitution.’

Clearly relations had hit rock bottom. It wastime for Miliband to try to calm things. ‘We had tocooperate together on Iran, on terrorism, even onclimate change. So I suggested that we meet withforeign minister Lavrov, and we proposed that wemeet him in the UN building in September. It wasimportant to show that we were open for businesson the diplomatic front, even though we werepursuing justice in the Litvinenko case.’

The rookie British foreign minister was in for ashock. Lavrov had practically lived in the UNheadquarters for about 17 years, including ten asRussia’s envoy. He is one of the shrewdestoperators I have met, with an encyclopaedicknowledge of two decades of diplomacy. He likesto chain-smoke, sip whisky and deploy hisarguments like rapiers. ‘I went in with a football

analogy,’ Miliband recalls. ‘I was talking to himabout which football team he supported, but I gotvery short shrift on that, and then the rest of the 30to 40-minute meeting was a very, very tough lessonin diplomacy from someone who felt that they’dbeen around the block, they knew what the scorewas and they weren’t going to take any lessonsfrom me. So it was a pretty robust encounter and apretty tough way to start a relationship.’

In fact, Lavrov has a different memory ofMiliband’s small talk, equally inappropriate. Herecalls with a laugh: ‘David started ourconversation by asking why our party, UnitedRussia, was a partner of the Tories, and not theLabour Party. For me, it was unexpected. Inter-party cooperation has nothing to do with me, but hewas extremely interested in this.’ As for freshideas on how to get over the Litvinenko crisis, saysLavrov, ‘I heard nothing. I repeated the Russianposition, including the prosecutor general’s offerto open a joint investigation with the British, ifthey were provided with all the materials at thedisposal of British investigators.’

Putin had referred to Britain’s ‘insulting’demand as a ‘remnant of colonial thinking’, andLavrov took up the theme. Miliband recalls: ‘Hesaid we needed to stop looking at ourselves as animperial power, who could tell other countries tochange their constitutions. He was absolutely clearabout that.’

Far from healing the rift, it widened even furtherafter Miliband’s meeting with Lavrov. InDecember the Kremlin announced it was closingtwo British Council offices in Russia, on thepretext of unpaid taxes and irregularities in itsofficial status. Many saw it as an own goal, sincethe British Council’s main tasks include teachingEnglish and organising cultural exchanges. ButLavrov decided the offices were ‘in violation of aninternational convention on consular relations’ –while at the same time explicitly saying the actionwas further retaliation for Britain’s ‘unilateralactions’ against Russia – specifically the freezingof negotiations on visa facilitation.

David Miliband looks back at his time joustingwith Lavrov and sees it is a clash of post-imperial

nations. ‘I’ve come to believe that Russia believesthat Britain is a declining power and Britainbelieves that Russia is a declining power. That is arecipe, not for misapprehension, but it’s a recipefor the sort of toughness and difficulty and, in someways, unwillingness to compromise, that seems togo with the territory of British–Russian relations.’

For five years political contacts between thetwo countries remained virtually frozen. And evenafter a new prime minister, David Cameron,visited Moscow in September 2011, relationsremained in the doldrums, beached on the sandbarof that atrocious Cold War murder in London in2006.

Showing initiativeThe spate of murders, which would continue overthe coming years, destroyed Putin’s attempts toportray his country as a free and moderndemocracy. Dozens of journalists were murderedin Vladimir Putin’s two terms as president. Not allthe cases were politically motivated, and few of

the victims had the stature of Anna Politkovskaya.But hardly any of the murders have been solved,giving the impression that journalists can be killedwith impunity in Russia, especially if they haveangered the authorities. The journalistPolitkovskaya and the political exile Litvinenkohad both earned themselves enemies in highplaces. They were extremely hostile to the Putinregime – indeed both wrote in rather similar terms,accusing the FSB of terrible subversive acts thatallegedly sacrificed hundreds of innocent lives inorder to shore up the regime.

In his investigation of the Litvinenko affair,Martin Sixsmith concludes that Putin himself didnot order the killing, but that he can be implicatedin the affair ‘because he created the atmosphereand conditions in which the killing could takeplace, in which an enterprising group of current orformer FSB men read the signals from the Kremlinand embarked on their own initiative.’12 I think thesame can be said about the Politkovskaya murder.In both cases, it is likely that the assassins did notreceive, or even require, a direct order, nor did

they need permission to kill, because they knewthat ‘taking out’ an ‘enemy of the state’ had thetacit approval of the authorities. They may havebeen acting on their own initiative, for revenge orto ‘please’ their masters. Either way, they knewthey would not be punished.

The very fact that the FSB had a unit known asURPO, whose operatives specialised in unlawfulkillings, speaks volumes about Russia today. Theunit may have been disbanded by Putin, but itwould be naïve to think that the FSB has suddenlybecome a club of amiable Clouseaus. Or that thefair trial and the jury have replaced the revolverand the phial of polonium.

9

MEDIA, MISSILES,MEDVEDEV

A Western PR machineTwo thousand and six should have been alandmark year in Russia’s post-communist history,and in President Putin’s campaign to bring hiscountry back to prominence as a respected andvalued player on the world stage. Russia hadbecome a member of the G8 group of leadingindustrialised nations in 1997, and this year, forthe first time, it was its turn to chair it – a chance

to shape the global agenda and to impress with aflawless summit in July, to be hosted by Putin inhis home town, St Petersburg.

As we have seen, however, the year began withRussia cutting off gas supplies to Ukraine – hardlythe image it was looking for. In the precedingmonths Putin had already unnerved the West with aseries of moves aimed at tightening his own gripon power and stifling the opposition, including hiscurbs on NGOs and the unleashing of the youthgroup Nashi to cow both political opponents anduppity foreign ambassadors.

Already there were calls from conservativequarters to expel Russia from the G8, or at the veryleast for President Bush to boycott the StPetersburg summit.

In the gloomy corridors of the presidentialadministration, hidden behind the dark-red wallsof the Kremlin, they came up with a novel idea:Russia needed to project its image better. Theyneeded a Western public-relations company tohelp them. There was no tender.1 Personal contactsled them to a leading New York PR firm, Ketchum,

and a European partner, GPlus, based in Brussels.The most senior executives from the twocompanies flew into Moscow and made a jointpitch to Putin’s press secretary Alexei Gromov,and his deputy Dmitry Peskov. (The two mendivided the role of spokesman between them:Gromov was in overall charge, but the fluentEnglish-speaker Peskov dealt almost exclusivelywith the foreign press.)

It was at this point that the directors of GPlus –former journalist colleagues of mine – asked me tojoin their team as chief Russia consultant. Much ofthis chapter is based on my experiences there.

We saw our main task as Kremlin advisers as arather simple one: to teach the Russians about howthe Western media operate and try to persuadethem to adopt the best practices of governmentpress relations. We were advisers, notspokespeople. But whereas the Westerners whoadvised Boris Yeltsin’s government on economicsin the 1990s were beating on an open door,advising Putin’s team on such an ‘ideological’subject as media relations was never going to be

so easy. Peskov did, in fact, show great interest instudying Western practices, but after some initialsuccess we watched our ‘client’ drifting back intotheir old ways. As the Politkovskaya murder wasfollowed by the Litvinenko murder, and then by theRussian invasion of Georgia, I began to wonderwhether the very reason the Kremlin had decidedto take on a Western PR agency was because theyknew in advance that their image was about tonosedive.

They were prepared to pay big money to try toburnish that image. Ketchum declarations filedwith the US Department of Justice show that theRussians paid, in the early years, almost $1 milliona month.2 (A separate Ketchum contract withGazprom – in deep trouble over its ‘gas wars’with Ukraine – cost about the same). The financialarrangements were not directly with the Kremlin,but with a Russian bank, thus avoiding the need tobe approved in the state budget.3 The whole ideawas criticised by some Russian media, whichwondered why the Kremlin needed a Western (asopposed to a Russian) PR agency, and why it was

not put out to tender as a state contract.4The biggest problem Ketchum faced was that the

Russians had little clue about how the Westernmedia function. Based on their experience of thedomestic media, they were genuinely convincedthat we could pay for better coverage – that apositive op-ed in the Wall Street Journal, forexample, had a certain price. They believed thatjournalists write what their newspaper proprietors(or governments) order them to write, and wantedto ‘punish’ correspondents who wrote criticallyabout them by refusing to invite them to pressevents (thereby, in fact, forfeiting the chance toinfluence them). They subjected the Guardian’sMoscow correspondent Luke Harding (and hisfamily) to constant harassment, apparently becauseof an interview his paper published with BorisBerezovsky in which he called for Putin to beoverthrown – even though Harding had nothing todo with the conduct or content of the interview.5 Atthe height of the Litvinenko affair, three membersof the BBC’s Russian team in Moscow wereattacked in the street. All this was hardly likely to

incline the journalistic community towards the kindof positive coverage the Kremlin craved. Theywould constantly demand that Ketchum ‘use ourtechnologies’ to improve coverage. I had no ideawhat they meant. The technology we wanted themto use was a West Wing-style press room, everymorning at ten o’clock. But it never happened.

In briefing-paper after briefing-paper wehammered away at our basic theme – open up tothe press. Mix with journalists, take them forlunches, schmooze, give them titbits off the record,and gradually win them over. Speak to them,explain yourselves, and they will begin to trustyou. Give interviews and get on air, because if youdon’t your opponents will, and they will set theagenda. It worked for a while. Peskov held a fewdinners for Moscow correspondents in fancyrestaurants (rather more formal than the kind ofthing we really had in mind), and that went downwell. They instituted ‘Tuesday briefings’ withselected ministers. The Moscow press corps wasdelighted. But after the murder of AnnaPolitkovskaya, Peskov became too worried: he

knew that whatever the formal topic of a briefing,journalists would end up asking about human rightsand democracy. Safer not to meet them.

Much of Ketchum’s work involved the kind ofthings that most governments get done internally,by their embassies and foreign ministry – in whomthe Kremlin evidently had little faith. Weorganised press conferences for governmentministers when they travelled abroad, andprovided briefing papers for them with thequestions they were likely to be asked (andsometimes with the answers we thought they oughtto give – though they rarely used them). We draftedarticles for ministers (and even the president)which were generally redrafted out of allrecognition in Moscow and became so unreadablethat they were difficult to place in any newspaper.Part of the mystery of this aspect of the work wasthat Peskov would ask us to draft an article for,say, the energy minister, or the foreign minister, butgive us no guidance whatsoever as to what theywished to say. He would usually reply, if asked:‘Just put in what you think he should say.’ So we

would draft articles –and speeches – blind. Andthen they would be completely rewritten. Foreignminister Lavrov, in particular, (rightly) had nointerest in having his articles drafted by ignorantforeigners.

Every day Ketchum provided the Kremlin withthree press reviews, compiled in Japan, Europeand the United States, which gave a comprehensive– perhaps rather too detailed – picture of coverageof Russia around the globe. The reviews oftencame to well over a hundred pages, withsummaries and full texts of any article thatmentioned the word Russia, but with little analysis.During the period of the first contract, for the G8year, Ketchum employed an outside agency tocolour-code every article in the press, with red,yellow or green, to indicate negative, neutral orpositive stories, so that by the end of the G8 yearthis could be plotted on a graph to demonstrate thatthere were more greens and fewer reds. This is acommon PR technique which unfortunately did nottransport well to the nuanced world of Kremlinpolitics. Often the colours seemed to be picked at

random, and bore little relation to the content –even sports news or a weather report could turn upwith a red or green button. (This ‘service’ waseventually dropped, after it was realised it wasuseless.)

The Kremlin received regular ‘road-maps’ –‘big picture’ PR strategies for the coming threemonths / six months / year, wrapped inmanagement-speak about ‘leveraging opportunitiesgoing forward’, ‘deliverables’ and ‘reaching out tostakeholders’. In practice much of the work boileddown to the more mundane business of helpingwith ministerial visits, organising pressconferences and briefing on key developments inthe West.

As a newcomer to the PR world I was amusedby the nebulous concepts of ‘influencer’ relationsand ‘third-party outreach’ – cultivating contactswith experts and ‘thought leaders’ who had aninterest in Russia. Ketchum was meticulous inreporting any contact, such as having lunch withsomeone from a think-tank or attending a lecture,which would all end up in the record of completed

tasks sent each month to Moscow. And if one ofthose influencers produced a positive line in somearticle, this could then be quoted in a report-backas a ‘success’. I remember one report ofKetchum’s achievements included a quotation fromthe Canadian prime minister, saying, ‘I thinkRussia’s made an enormous amount of progress inrecent years.’ It was not clear whether the Kremlinreally believed that we contributed to that.

One undoubted success was the introduction of‘tele-briefings’, where journalists could call in toparticipate in a news conference with Peskov or agovernment minister. The Russians found thesemore agreeable than face-to-face meetings, andfinally acquired a way to interpret their actions tothe press.

Over the three years working with him I got toknow Dmitry Peskov fairly well. Tall, smartlydressed and in his early 40s, he has a charming,easy-going style, and speaks excellent English (andalso Turkish, having worked for many years in theembassy in Ankara). He was spotted by PresidentYeltsin during a trip to Turkey in 1999 and brought

back to work in the presidential administration.When Putin came to power he became head of theKremlin’s press relations office and deputyspokesman to the president. Ever since then he hasbeen a priceless asset, almost the only person inRussia with the ability, the authority and thewillingness to give on-the-record interviews to theforeign press. As a result he was in huge demand.My colleagues in the BBC Moscow bureau, whohad an insatiable demand for talking heads, used toplead with me: ‘Please get them to provide otherspokespeople. Dmitry’s great, but he just doesn’thave the time …’ But other than a few ministers,no one else in Russia was willing to giveinterviews to the Western press. No wonder theyfound it so hard to get their message across.

I gave Dmitry media training to help him feelmore comfortable in front of the television camera.It was an opportunity not just to draw his attentionto his voice or mannerisms, but also to subject himto the toughest possible questions, and train him inthe art of expressing a few essential ideassuccinctly and coherently. Many interviewees who

have not studied how a Western news bulletinworks tend to ramble on interminably, nevergetting to the point.

During a G8 summit in Germany in 2007,Peskov approached me with a special task – torewrite and spice up a speech President Putin wasto make in Guatemala City in support of Russia’sbid to host the 2014 Winter Olympics in Sochi.The bid was successful – for which I naturally takethe entire credit! (In truth, most of my suggestionswere not accepted!) When Dmitry Medvedevbecame president in 2008 I gave advice aboutvideos and podcasts, and saw at least some of myideas incarnated in his innovative video-blogs.

Dmitry’s boss, Alexei Gromov, was one of themost important men in the Kremlin during Putin’spresidency. He was described to me as ‘the onlyperson who could walk into Putin’s office withoutan appointment’. He saw him every day and was aconstant sounding board for policy ideas. He alsoexercised tight control over the Russian media. Iwas once drinking tea in his office when the headof Russian state television walked in. Gromov

introduced me briefly to him, then waved himthrough to his back office, asking him to pourhimself a drink and wait. This was the regularweekly pep-talk, where Gromov talked through theagenda for the coming period and made surecoverage would be ‘correct’.

Like Peskov, Gromov started out in thediplomatic service, posted to Prague andBratislava, and was brought back to head Yeltsin’spress service in 1996. He has a penchant forpatterned cardigans and smokes Marlboros throughlong cigarette-holders. As Putin’s press secretaryhe dealt exclusively with the Russian media,leaving the foreign press to Dmitry Peskov. Duringone meeting with Gromov I raised one of myperennial themes: the West regarded Russia asreverting more and more to Soviet ways of thinkingand behaviour, and in order to combat this it wasnecessary not only to stop acting like the Soviets(by banning opposition demonstrations, forexample) but also to forcefully repudiate theSoviet past in speeches and in documentaries thatcould be shown on state television. Gromov’s

reply was revealing. He conceded that this wouldhave a positive effect on the West’s attitudes, but,he said, ‘we have to think about domestic publicopinion, which generally is positive about theSoviet Union. We have to think about politicalstability inside the country first and foremost.’ Ifound it depressing that he simply accepted thatmany Russians, especially older ones, werenostalgic about the past, and that challenging thisview could lead to ‘instability’. With his influenceover the state media, he could have launched acampaign to change perceptions of the past. Afterall, this had been done under Gorbachev andYeltsin, and attitudes had changed. Now thegovernment, by its inaction, was allowingStalinism and communism to enjoy a revival.Worse than that – as we shall see in a later chapter– school textbooks were being rewritten to playdown Stalin’s crimes.

Over the years I tried to be as candid aspossible in my advice, even if it went beyond thenormal bounds of ‘public-relations advice’. Thiswas a period when the authorities began to break

up demonstrations staged by a new oppositioncoalition known as The Other Russia, led by thechess champion Garry Kasparov. I explained to myKremlin colleagues that no amount of PR wouldlessen the damage done by a photograph of riotpolice beating up old ladies. But of course mycomments were misdirected. I have little doubt thatDmitry Peskov agreed with me wholeheartedly:but it was not his job to change the police tactics.

I was once asked to comment on an articledrafted in Russian for President Medvedev, with aview to having it published in the prestigiousForeign Affairs magazine. This was in 2008,following the war against Georgia. The article wasso badly written (as though at least three peoplewith divergent views had contributed to it) that Isent back an excoriating review, suggesting thatunless they wanted their president to be seen as acrazy schizophrenic they should tear the article up.The eyebrows of my professional PR colleaguesshot up, concerned about upsetting their employers.But Peskov thanked me for my advice.

However much Peskov came to trust my

judgement, I came to realise that it made littledifference. The Kremlin wanted us to helpdistribute the message, not change it. They did notentrust us with anything at all in advance. Wewould ask for advance copies (or at least extracts)of important speeches, for example, so that wecould prime the early morning news bulletins, whetthe appetite for more, and ensure maximum effectby the end of the day. This is standard practice inWestern government press offices. But the Kremlindid not trust its media advisers. We received thetexts of Putin’s speeches at the same time as thejournalists. As for the public-relations efforts thatreceived attention in the West – Putin’s machophoto-shoots, for example – they had nothing to dowith us. We always learned about them after theevent.

Ketchum won a prestigious public relationsaward for its efforts in 2007, but I know theKremlin wanted its PR consultants to be ‘pushier’– not just arranging press conferences andinterviews, or providing them with briefingmaterials and analytical papers, but actually trying

to manipulate journalists into painting a morepositive picture of Russia. I remember aconversation with Peskov’s deputy in which hecriticised us for failing to follow up an interviewgiven by a government minister to ensure that thejournalist wrote it up in ‘the right way’.Newspapers would describe us as spin-doctors,endeavouring to play down Putin’s human rightsrecord – and, indeed, perhaps that is what theKremlin wished for. But in fact, Ketchum’sprincipal role was to inform the Kremlin abouthow they were being perceived, and to encouragethem to take the initiative to change things. Whatreally needed changing, of course, was themessage, not the way it was conveyed – but thatwas a political challenge far beyond Ketchum’sremit.

Other Western approachesThe Ketchum project was not the only ‘propagandatool’ employed by the Kremlin at this time. RussiaToday (later rebranded RT) was set up at the end

of 2005 as a 24-hour satellite television station,aiming to give a ‘Russian take’ on world eventsand to inform worldwide audiences about Russianpolitics and life. With a budget of $60 million inits first year, it employed Russians with first-classEnglish and also foreign nationals as presenters,and looked as professional as many of itscompetitors in the global television market. Unlikerivals such as BBC World News, CNN ornewcomers like France-24, however, it did not setout to be a dispassionate news source, coveringstories on their merits. RT’s mission is to explainRussia to the world, so there is an emphasis ondomestic political stories and little attempt toprovide comprehensive coverage from othercountries. The method used is much less crude thanits Soviet precursors, which painted a black-and-white picture of a West riven by class struggle andpoverty, contrasted with a Soviet Union free ofproblems. RT – understanding that viewers alsohave other sources of information – does not shrinkfrom covering opposition activities and evencriticism of Russian policies. It thereby manages to

create an illusion of plurality in the Russian mediawhich in fact belies the truth: RT is the exceptionin Russia’s television system, because it is aimedat a foreign audience. It showed its true coloursand purpose during the 2008 war with Georgia,when all pretence at balance was dropped andRussia Today became a full-blooded propagandistfor the Kremlin.

The station was founded by a state-owned newsagency, RIA Novosti, which grew out of theSoviet-era Novosti Press Agency (APN) and likeit combines two separate roles: firstly, it is anews-gathering organisation which provides newsreports primarily to foreign audiences (APN’snetwork of foreign correspondents also included alarge number of undercover KGB spies); secondly,its foreign bureaus serve as hubs for thepropagation of Russian government information.The latter function overlapped greatly with the roleKetchum and GPlus were expected to play, andthis led to a certain amount of friction. I got theimpression that RIA Novosti was none too happyabout its role as official Kremlin propagandist

being usurped by foreigners. Occasionally GPlus,for example, would be asked to set up a pressbriefing with the Russian envoy to Brussels,Yevgeny Chizhov, only to find that the ambassadorwas already working with RIA Novosti on thesame project – except that RIA, with its enormousresources, was doing it in style, with a video linkto Moscow.

RIA Novosti was the prime mover behindanother image-making innovation – the ValdaiInternational Discussion Club which began itswork in Putin’s second term. The Valdai Clubbrings together about 50 foreign ‘Russia watchers’(mainly journalists and academics) eachSeptember for ten days of debates with Russianspecialists, combined with sightseeing (every yeara more exotic location) and meetings with topKremlin officials (every year a better, more seniorcrop). The first session, in 2004, was at LakeValdai, north of Moscow, from which the Clubderived its name, and the surprise guest of honourwas President Putin himself – fuming in theaftermath of the Beslan tragedy – who was willing

to spend several hours with the group, letting offsteam and answering their questions. Since then theitinerary has included trips to Kazan, Chechnya,Siberia and St Petersburg, and featured lavishlunches with Putin and Medvedev (separately) attheir dachas outside Moscow or in Sochi. In 2009Medvedev apparently decided that Valdai was tooclosely associated with Putin; he held his ownevent for foreign experts, the ‘Yaroslavl GlobalPolicy Forum’, instead.

Valdai was a brand-new way of influencingoutsiders – much more subtle than giving aninterview on CNN or the BBC, or trying to steerMoscow correspondents towards giving morefavourable coverage. This was soft propaganda –quite a risk, since hosting 50 foreigners in five-starhotels for ten days is not cheap and certainly notguaranteed to change perceptions overnight. Theidea was that the guests – experienced Kremlin-watchers who write in academic journals, advisegovernments, and appear as pundits in the media –would become better disposed towards Putin ifthey were given the opportunity to meet him over a

long lunch and spend a week or so debating issueswith friendly Russian experts and officials.

Critics in the Moscow intelligentsia are utterlydismissive of the project, claiming that themajority of participants are ‘useful idiots’ whohave the wool pulled over their eyes and go homeparroting the propaganda that’s served up to themwith the lobster terrine and fine wines.

Lilia Shevtsova of the Carnegie Endowment, forexample, says the Kremlin uses Valdai to ‘co-opt’and manipulate Western commentators: ‘Foreignguests come to the Valdai meetings to absorb theopinions of Russia’s leaders and then transmitthem to the rest of the world.’ 6 I would agreeentirely that this is what the Kremlin wants tohappen. Otherwise they would not spend so muchtime and money on it. But having attended threeValdai conferences, I think she overestimates theeffect. Maybe some participants become lesscritical – and it is certainly true that almosteveryone, Valdai member or not, tends to bemesmerised by personal contact with VladimirPutin (Margaret Thatcher used to have a similar

effect, even on her critics). But the coverage thatspills out from these weeks is not all sycophantic.Ariel Cohen of the conservative HeritageFoundation and the experienced Marshal Goldmanare hardly Kremlin stooges.

Meeting officials is always better than notmeeting them, and most of the Valdai participantsare experienced enough to be able to separate thepropaganda from the truth. By and large those whoarrive well disposed leave well disposed, andthose who arrive believing Putin is crooked andundemocratic rarely change their minds. Mostjournalists and scholars would welcome theopportunity to meet so many government officialsin any country; it does not mean you automaticallyaccept their views, far less ‘transmit’ them.Spending several hours listening to Putin, forexample, does not necessarily make one fall inlove with him, because one has a chance toscrutinise his mannerisms and obsessions, even attimes his anger, and for a democrat the experienceis far from comforting. My criticism of theparticipants is not that they fall for the propaganda,

but that few of them – perhaps being too much inawe of him – take this unique opportunity to arguewith Putin: it’s a case of asking a (usually soft)question, and patiently listening to the interminableanswer – and never daring to follow up orinterrupt, or tell him why he is wrong. Too many ofthe questions – even from the ‘nasty’ crowd –come larded with flattery and compliments. I knowprivately from Dmitry Peskov that Putin himself(who quite clearly enjoys an argument) despairs atthe lack of combative questioning.

Putin also appears to doubt the efficacy of theValdai effort. At his fourth meeting with the group,in 2007, he kicked off with a rather causticcomment that underlined his apparent belief thatthe Western media follow some kind of‘instructions’: ‘In recent years I’ve becomeconvinced that the media in Europe and NorthAmerica are very disciplined. I don’t see anyobvious results from our meetings in yourpublications, though I’m sure that you personallyare getting to understand our country better. We’dbe glad if you would transmit something of what

you learn to your readers and viewers, to combatthe strong stereotypes that exist in the West.’

Much more pernicious than the Valdai Club (atleast in intent, if not in reality) is the Institute forDemocracy and Cooperation – yet anotherinnovation of the second Putin term. With offices inNew York and Paris, it is the ultimate Soviet-stylerevival in today’s Russia: a think-tank that aims toprove that human rights and democracy aretrampled on in the West rather than in Russia.According to its mission statement, the Institutehopes to ‘improve the reputation of Russia in theUS’ and to provide ‘analysis’ of US democracy. ItsNew York office is run by Andranik Migranian, anArmenian by birth but a fierce supporter ofRussia’s alleged right to interfere in neighbouringstates; its Paris office is run by NataliaNarochnitskaya, a Russian nationalist andapologist for Slobodan Milosevic. Having giventhem both media training before they weredeployed to the front, I could say with someconfidence that the West had little to fear fromtheir mission to undermine faith in Western

democracy, but I was sure they would both enjoytheir sinecures in America and France.

MunichIn February 2007 I was asked by the Kremlin totravel to Germany, where President Putin was dueto make a speech at the prestigious MunichSecurity Conference, held each year in theBavarian capital. His press team was anticipatinga strong reaction and wanted some help inarranging interviews for Dmitry Peskovafterwards. As usual, we were not given anydetails about the content of the speech, but Peskovand his deputy, Alex Smirnov, were excited: ‘Thiswill be very tough!’ they said. ‘We’ll want tospeak to journalists to make sure they’veunderstood.’ They needn’t have worried: it was thebluntest, most powerful speech of Putin’s career.

The Bayerischer Hof hotel was ringed withsecurity officers and teeming with senior worldfigures – not only dozens of defence ministers andgenerals but parliamentarians, politicians and

eminent journalists. None of them was expectingthe tongue-lashing Putin was about to deliver.Early in 2007, according to those in the know, theRussian president had finally lost patience with theAmericans. ‘Dostali!’ he told his aides: ‘I’ve hadenough!’ The immediate cause of frustration wasWashington’s decision to push ahead with its plansfor a national anti-missile defence system based inEurope. It had just begun talks with Poland aboutthe possibility of basing ten interceptor missiles onits territory, and with the Czech Republic aboutbuilding a state-of-the-art missile-tracking radarstation there. Early in his presidency Putin hadreluctantly acquiesced in Bush’s decision toabandon the Anti-Ballistic Missile treaty, but hehad no intention of being so lame when it came tothe new defensive system that the Americanswanted to deploy. Russia was convinced that thiscould neutralise its own nuclear deterrent.

Putin strode into the conference hall armed withmore than just the usual grievance cards. He beganwith a jocular warning to his audience:

This conference’s structure allows me to avoidexcessive politeness and the need to speak inroundabout, pleasant but empty diplomatic terms. Theformat will allow me to say what I really think aboutinternational security problems. And if my commentsseem unduly polemical, pointed or inexact to ourcolleagues, then I would ask you not to get angry withme. After all, this is only a conference. And I hopethat after the first two or three minutes of my speechMr Teltschik [the chairman] will not turn on the redlight over there.

The audience was already bristling, as Putinlaunched a blistering attack on what he describedas the USA’s attempt to rule the world as its ‘solemaster’:

Today we are witnessing an almost uncontainedhyper-use of force – military force – in internationalrelations, force that is plunging the world into anabyss of permanent conflicts. As a result we do nothave sufficient strength to find a comprehensivesolution to any one of these conflicts. Finding apolitical settlement also becomes impossible. Weare seeing a greater and greater disdain for the basicprinciples of international law. And independent legal

norms are, as a matter of fact, coming increasinglycloser to one state’s legal system. One state – ofcourse, first and foremost the United States – hasoverstepped its national borders in every way. This isvisible in the economic, political, cultural andeducational policies it imposes on other nations.Well, who likes this? Who can be happy about this?

The United States was guilty of ‘ideologicalstereotypes’ and ‘double standards.’ He accusedthe Americans of lecturing Russia aboutdemocracy, while invading other countries,flouting international law and causing an armsrace. He suggested that the US, instead ofdestroying missiles intended for elimination undera recent arms treaty, might ‘hide them in awarehouse for a rainy day’. Referring to PresidentBush’s missile defence plans, Putin condemned the‘militarisation of outer space’, and proposed atreaty to outlaw such weapons. The expansion ofNATO, he said, was a ‘provocation’:

We have the right to ask: against whom is thisexpansion intended? And what happened to the

assurances our western partners made after thedissolution of the Warsaw Pact? Where are thosedeclarations today? No one even remembers them.But I will allow myself to remind this audience whatwas said. I would like to quote the speech of NATOGeneral Secretary Mr Woerner in Brussels on 17May 1990. He said at the time that: ‘The fact that weare ready not to place a NATO army outside ofGerman territory gives the Soviet Union a firmsecurity guarantee.’ Where are these guarantees?

Putin warned that a new iron curtain wasdescending across Europe – and his words seemedto ring with hurt, as he pointed out that Russia too– just like the East Europeans – had abandonedcommunism but was not getting any credit for it:

The stones and concrete blocks of the Berlin Wallhave long been distributed as souvenirs. But weshould not forget that the fall of the Berlin Wall waspossible thanks to a historic choice – one that wasalso made by our people, the people of Russia – achoice in favour of democracy, freedom, opennessand a sincere partnership with all the members of thebig European family. And now they are trying toimpose new dividing lines and walls on us – these

walls may be virtual but they are neverthelessdividing, ones that cut through our continent.

Robert Gates, the American defence secretary,was sitting in the front row, scribbling on a pieceof paper throughout the speech. Afterwards, hisaides, Dan Fata and Eric Edelman, rushed to askhim whether they could help him rewrite thespeech he was due to give the next morning, inview of what they had just heard. Gates pulled outthe paper he had been writing on and said: ‘Well,tell me what you think about this?’

Fata and Edelman listened, looked at each other,and said, ‘Sir, that’s fantastic!’

‘Well, it’s not my first rodeo,’ responded theirboss.7 Indeed, Robert Gates had many years ofexperience, not unlike Putin’s, having joined theCentral Intelligence Agency in 1966, rising tobecome its director under President George H.W.Bush. He referred to this when he rose to make aconciliatory response to Putin at the MunichSecurity Conference the next morning.

‘Many of you have backgrounds in diplomacy or

politics,’ he said. ‘I have, like your second speakeryesterday, a starkly different background – a careerin the spy business. And, I guess, old spies have ahabit of blunt speaking. However, I have been tore-education camp, spending four and half years asa university president and dealing with faculty.And, as more than a few university presidents havelearned in recent years, when it comes to faculty itis either “be nice” or “be gone.” The real worldwe inhabit is different and a much more complexworld than that of 20 or 30 years ago. We all facemany common problems and challenges that mustbe addressed in partnership with other countries,including Russia. One Cold War was quiteenough.’

The analyst Dmitry Trenin described Putin’sMunich speech as the start of a new phase in histhinking. If phase one was ‘rapprochement withEurope and the US’, and phase two (following theIraq war) was ‘non-alignment, but reluctance toconfront the West’, then phase three, after Munich,was one of ‘coerced partnership’. Trenin wrote:‘Putin laid out conditions under which he expected

to coerce America and Europe into partnershipwith Russia: accept us as we are, treat us asequals, and establish cooperation based on mutualinterests.’ 8 In the end, Trenin wrote, the ‘coercedpartnership’ never took place, because in 2008 andearly 2009 Russia began moving towardsincreased isolation from its would-be partners.

But during 2007, in the months following theMunich speech, President Putin did make one lastattempt to reach an accommodation with theAmericans over missile defence. Perhaps he hopedthat the speech would shock them into cooperation.The two sides would come tantalisingly close to anagreement, and when the attempt failed, this time itwould be as much the Americans’ fault as Putin’s.

The threat from Iran … or RussiaFrom the start of his presidency, George W. Bushhad insisted that the planned national missiledefence (NMD) system was intended to protect theUnited States from attack by ‘rogue states’ such as

Iran and North Korea. Even if they did not have thecapability yet, they appeared to be buildingmedium and long-range systems that might one dayreach America. The trajectory of Iranian missiles,it was argued, would pass over Eastern Europe,and so the European element of the NMD systemwould require a radar facility in the CzechRepublic (to track missiles in the early stage oftheir flight) and interceptor missiles in Poland (toshoot them down).

‘From the very outset,’ Putin’s foreign policyadviser Sergei Prikhodko recalls, ‘these planswere unacceptable to us.’9 The Russians rejectedthe idea on several grounds: Iran did not yet havethe long-range missiles against which the NMDsystem was aimed and would not have them formany years; even if they did, Poland and the CzechRepublic were not the best places to interceptthem; and, crucially, the Czech radar would beable to spy on Russian facilities, while the Polishmissiles would undermine Russia’s own nucleardeterrent.

Until now, Russia had criticised the plans but

offered no constructive alternative. But in June2007 Putin came to a G8 summit in the Germanseaside resort of Heiligendamm with plans of hisown. Apart from the main summit business Putinhad a bilateral meeting with President Bush, forwhich he had prepared so thoroughly that it tookthe American by surprise. In the week before, heconsulted military experts, and the night before, inhis room, Putin sketched out maps of missiletrajectories and other data. Now he placed them infront of Bush and expounded in great detail whythe American plans were all wrong. According toan aide who was present, Putin ‘delivered a realthesis’, explaining where the radars needed to be,why Bush was being misled by his advisers aboutIran and North Korea, and why Russia feltthreatened.10

Bush is said to have looked at him and said,‘OK, I see this is really serious for you. Nobodyadvised me you treat this so seriously.’

‘We can’t sleep for thinking about this!’ saidPutin.

‘Well, as your friend,’ said Bush, ‘I can promise

that we’ll look into what you’ve said.’But Putin had a new and concrete proposal,

designed to trump the American move – whilesimultaneously calling their bluff on whether thesystem was really aimed against Iran and notRussia, as Bush claimed. ‘Look,’ he said. ‘I spoketo the president of Azerbaijan yesterday. We havea radar station there, in a place called Gabala. I’mwilling to offer this to you. It’s closer to Iran. Wecan have a joint system. You use our radar inAzerbaijan, and there’ll be no need for one in theCzech Republic.’

Putin had a stick as well as a carrot. Just daysbefore the summit he had hinted darkly that if theAmericans deployed their missile interceptors inEastern Europe then Russia would have to retaliateby re-training Russian missiles on Europeantargets. Now he offered to remove that threat if theAmericans rethought their plans: ‘It would allowus to refrain from changing our position andretargeting our missiles. There would be no needto deploy our missile strike system in theimmediate vicinity of our European borders, and

no need to deploy the US missile strike system inouter space.’

It was an opportunity the Americans could notignore: for the first time, Putin was offering to drophis opposition to missile defence, under thecondition that Russia would also be involved in it.Bush promised to talk to his military advisersabout it.

But within a month, sensing he had Bush’s ear,Putin was offering more. On 1 July he flew toKennebunkport in the state of Maine for informaltalks at the Bush family home at Walker’s Point, alittle peninsula jutting out into the Atlantic Ocean.He took a speedboat ride with George W. Bushand his father and ate a supper of lobster andswordfish with the family, together with the foreignministers and national security advisers from eachside – Condoleezza Rice and Stephen Hadley, andSergei Lavrov and Sergei Prikhodko. ‘It was avery relaxed setting,’ says Rice. ‘We sat, I’ll neverforget, in this lovely chintz-covered living room,with the ocean in the background.’11

Next day they did a spot of fishing, and Putin

pulled out more initiatives. Not only would heoffer the Gabala radar in Azerbaijan but he wouldget it modernised. And then there was a brand-newradar the Russians were about to commission atArmavir in southern Russia. That could also beused. Together they would form a joint early-warning system for common missile defenceinvolving not just the US and Russia but the wholeof NATO. The NATO–Russia Council couldfinally have something concrete to work on. Putinoffered to host an ‘information exchange centre’ inMoscow and proposed there could be a similarone in Brussels too. ‘This would be a self-contained system that would work in real time,’Putin went on. ‘We believe that there would thenbe no need to install any more facilities in Europe– I mean those facilities proposed for the CzechRepublic and the missile base in Poland.’

Bush wasn’t too sure about the latter point, butthe rest of Putin’s proposal made a lot of sense tohim – especially as Putin seemed to place thesespecific missile defence proposals in the context ofa whole new strategic alliance. As Sergei Lavrov

recalled later: ‘Putin stressed that if we couldwork together on this, it would, to all intents andpurposes, make us allies. The proposal wasprompted by a wish to create an absolutely newrelationship between us.’

The talks ended, and the two leaders were aboutto go outside to brief the press. Stephen Hadleytook President Bush aside for a moment: ‘That wasa terrific statement, exactly what we’ve beenlooking for from Putin. Do you think he’d bewilling to say that publicly?’

‘I don’t know. Let’s ask him,’ said Bush. Heapproached the Russian leader and told him hethought it would help accelerate progress betweenthe two countries if he would repeat on camerawhat he had said privately.12

Putin was only too happy to oblige. ‘Suchcooperation,’ he told the press, ‘would bring abouta major change in Russian– American relationsregarding security. In fact, this would lead to thegradual development of a strategic partnership inthe area of security.’

So far, so good, but the Americans had yet to see

what kind of facility Putin was offering. The neo-cons in the defence establishment were highlysceptical, and saw the move as a ploy to drive awedge between the US and the Poles and Czechs.Under-secretary of defence Eric Edelman recalls:‘I was doubtful that this actually indicated aRussian desire to cooperate on missile defence.My view was that a lot of what they were doingwas tactically aimed at preventing us movingforward on missile defence by drawing us intounproductive discussions or into other issues.’13

In September a team of experts led by thedirector of the Missile Defence Agency, GeneralPatrick O’Reilly, flew out to Azerbaijan to inspectthe Gabala radar station. They were not impressedby what turned out to be an ageing Sovietinstallation. The neo-cons were not unhappy tohave their suspicions confirmed. According toEdelman, ‘What [O’Reilly] said was that this wasa radar that had some capability. That it could beuseful. But that it was also quite old. That itneeded major upgrade. And that in order in thefuture to really play a role it was going to need

some considerable expenditure and work.’The team concluded that Putin’s offer could help

only to monitor the threat of a missile attack. Butthe American vision was of a system that coulddefend against it – and for that they would stillneed other sites in Poland and the Czech Republic.

The more Russia-friendly axis in theadministration accepted this, but did not want tothrow away an olive branch they had not evenexpected to see, after Putin’s Munich speech.Condoleezza Rice and Robert Gates met alone inthe defence secretary’s office at the Pentagon. Ricerecalls: ‘We’re both Russianists, and we said:what we have to do is, we have to break the codesomehow, we have to find a way to scratch the itchthat the Russians have about being left out of this,about it being in the Czech Republic and Poland,which was obviously a lot of the problem. And arethere some things we can do as confidence-building measures?’

Gates and Rice batted ideas back and forth andeventually came up with an idea that might do thetrick. In October they headed out to Moscow for

what were dubbed ‘two plus two’ talks – betweenthe foreign and defence ministers on each side:Rice and Gates, plus Lavrov and Serdyukov.

On the morning of Friday 12 October they droveout to the president’s Novo-Ogaryovo residence,travelling the same road Rice had taken a yearearlier for the surprise birthday party that hadended so testily. Putin wanted to see them beforethe 2+2 talks got going – and he was in much thesame mood as a year before. Again he kept theAmericans waiting for half an hour, though he hadno other meetings. Then, when he assembled thetwo delegations around the table, with thetelevision cameras running, he launched into afresh tirade against the American plans: ‘The onepoint I would like to make is that we hope that youwill not push ahead with your prior agreementswith Eastern European countries while thiscomplex negotiating process continues. You know,we could decide together to put a missile defencesystem on the moon some day, but in the meantime,because of your plans, we could lose the chance toachieve something together.’

According to Gates, Putin questioned whetherthe Americans really needed a system to defendthem from an Iranian attack. ‘He passed me thispiece of paper that showed the range arcs ofIranian missiles, and he was basically saying thattheir Russian intelligence was that the Iranianscouldn’t have a missile that could hit Europe foryears and years and years. That’s when I said,“You need to get a new intelligence service.” ’14

News reports at the time quoted Putin’ssarcastic comment about missiles on the moon, andconcluded that the talks had failed. But behind thescenes, Gates and Rice made an offer that theRussians liked. It was intended to bridge thedivide over whether or not the Iranians posed athreat. Lavrov remembers: ‘They suggested that theUS would not activate their missile defence systemuntil we, together with them, established that therewas a real threat.’15

According to Rice, ‘Bob [Gates] said: supposewe dig the holes, but we’ll do a joint threatassessment on Iran, and won’t actually startdeploying interceptors until there is some shared

understanding of where the Iranians are going.’‘It was going to take some period of years

anyway to get these sites operational,’ said Gates,‘so we could wait for the installation of theinterceptors until the Iranians had flight-tested amissile that could hit Europe.’

The suggestion went down well because it atleast delayed things, but it did little to disabuse theRussians of their conviction that they, not Iran,were the Americans’ real target. At this pointGates came up with a proposal which he nowadmits, with a wry smile, was certainly not agreedwith the hawks back home. ‘I thought that therewere a lot of things we could offer in the way oftransparency, in terms of giving them access. Wecould even have a more or less permanent Russianpresence there, like arms inspectors.’

Within minutes the idea evolved into an offer tothe Russians to have a permanent militarypresence, 24/7, at the US installations in Polandand the Czech Republic. The Russians wereastonished. Their chief negotiator, AnatolyAntonov, recalls: ‘We didn’t actually discuss the

technicalities of where they would live and whowould pay for them … but it was an interestingidea.’16

Gates recalls rather ruefully: ‘All thesemeasures that I talked about, I was just making upon the spot. If Condi and I agreed then why not seeif we could make some headway with Putin?’

Lavrov asked the Americans to put it on paper.But when Gates and Rice returned to Washingtonwith their ad hoc proposals, there was, in Gates’words, ‘consternation’. The ideas had to beassessed by all the relevant administrationdepartments – defence, state, national security – inthe so-called ‘interagency process’. It soonbecame clear that the neo-cons had not the slightestintention of giving the Russians 24/7 access totheir most state-of-the-art facilities. They alsobelatedly consulted the Czechs and Poles, andwere given short shrift. As Gates recalls, withsmiling understatement: ‘There were several areasin which the interagency process here sanded offsome of the sharp edges of the offers and madethem less attractive.’

The offer was put in writing, as requested, but inplace of ‘permanent Russian presence’, itsuggested that embassy attachés could occasionallyvisit the Czech and Polish sites. The Russiansshook their heads with derision. Lavrov recalled inan interview: ‘We got the paper in November andnot one of the proposals was in it.’

A second 2+2 session was held in March 2008,but it was bad-tempered and unproductive. By nowit was clear to the Russians that the Bushadministration would not be deflected from theirplans. Within a few months Washington signed theagreements it needed with Prague and Warsaw(despite the opposition of public opinion in bothcountries). Once again, Putin had attempted toforce Washington to take Russia’s views intoconsideration, and failed.

Paralysis in the KremlinPutin’s increasingly tough line abroad coincidedwith a time of growing uncertainty at home.Working with the Kremlin, I became aware of

something close to paralysis in the president’steam as he plotted his own future during 2007, thelast year of his second term. Under the constitution,he could not run for a third consecutive term, andPutin repeatedly stated that he would not changethe constitution to serve his own personal ends.There were many in his entourage who urged himto do so – and public-opinion polls suggested itwould have been the most popular option – butPutin wanted to find another way to preserve hisrole.

It was the dilemma of an autocrat who wasdetermined, at least formally, to abide by the rules.He had no intention of leaving the scene: hisstatements indicated that he was afraid the coursehe had set Russia on could still be reversed, that hedid not fully trust anyone else to defend that courseas he himself would, and that he certainly did nottrust ordinary people, through a democraticelection, to choose the ‘correct’ path – not even byoffering them two ‘approved’ candidates to choosefrom. Somehow, he needed to manoeuvre a trustedsubstitute into the driving seat – someone who

would both continue his policies and not challengehis position as the ultimate ‘national leader’,running things behind the scenes. The trouble was,Putin himself did not know how to achieve this.Nor did he know for many months who the rightsubstitute might be.

Not the current prime minister, certainly.Whereas Boris Yeltsin had appointed Putin to thatjob in 1999 in order to position him to becomepresident, Putin had appointed his most recentprime minister, Mikhail Fradkov, for precisely theopposite reason – to have a grey yes-man with noambitions at the head of the government.

There were two front-runners: DmitryMedvedev had been first deputy prime ministersince November 2005 and was seen as a ‘liberal’,with no obvious connections to the siloviki, whileSergei Ivanov, the former spy and defenceminister, was promoted to the same rank – firstdeputy prime minister – on 15 February 2007,prompting speculation that he was a serious rivalfor the future presidency. I could tell from mydealings with senior officials that no one knew

which of them to side with. Both men beganforming their own loyal teams, including presssecretaries, but the wisest functionaries kept aloof.

As a result, people at all the top levels ofgovernment became immobilised, afraid of takinglong-term decisions and unsure which of thepossible candidates to support. The hesitation waspalpable from the middle of 2007 through to theparliamentary election in December, and evenbeyond the presidential election on 2 March 2008.For a good year, the strongman’s dilemma left thecountry weak and irresolute.

One thing was clear: no ordinary Russian –indeed no one below the top circle of power –would have the slightest say in who Russia’s nextpresident would be. But it would take Putin monthsto work out how to do it. I am pretty sure he didnot have a plan in place at the beginning of theyear. It emerged – and evolved – over the months. Ioften asked my contacts in the Kremlin what wasgoing on, and I am sure they were not dissemblingwhen they told me they had no idea. Even Putindidn’t know.

The situation gave rise to the rebirth ofKremlinology, long dead since the days whenpeople like me used to pore over photographs ofPolitburo line-ups on Red Square, or count howmany words Pravda dedicated to various up andcoming Soviet leaders. It did not escape attentionthat in January 2007 Medvedev received a warmwelcome for a relatively liberal-sounding speechat the World Economic Forum in Davos, nor that itwas just five days after accompanying Putin toMunich in February that Sergei Ivanov waspromoted to the same rank as Medvedev.

The new Kremlinologists, including thoseworking in the Kremlin itself, fearful for their ownfutures, avidly debated the merits of the twocontenders. Medvedev was seen as perhaps tooliberal or weak (though, on the other hand, thatmight be exactly what Putin was looking for, toproject a softer image abroad). Ivanov was asilovik, surely closer to Putin, who had promotedso many spies and military men in the past years …but then again, perhaps he was too strong, toomuch of his own man, too much of a threat. Might

Putin even allow them to stand against each other,representing different facets of the establishment?Or would Putin finally change the rules and run fora third term?

It was Ivanov who seemed to be being groomedfor the top job, shown more often on television,travelling more often with Putin, haranguing theWest in Putin-like tones. Opinion polls, to theextent that they could be believed, put Medvedevmarginally ahead of him until June, when the ex-spy pulled ahead by about four points.

Suddenly, on 12 September, Putin pulled off anexcruciatingly bad piece of political theatre, inwhich the prime minister Mikhail Fradkov wasshown on television walking into the president’soffice and falling – metaphorically and ratherclumsily – on his sword. ‘In view of the politicalprocesses going on at the moment,’ Fradkovmumbled, ‘I want you to have complete freedom inyour decisions and appointments. So I want to takethe initiative and free up the position of primeminister so that you have a free hand in configuringyour cabinet as you see fit.’ That was code for:

obviously I am not going to be the next president,so I will resign and let you appoint the person youwant. (This was based on the assumption thatPutin, like Yeltsin, would appoint his chosen heiras prime minister.)

‘I completely agree with you,’ said PresidentPutin, pretending to have had no say in the cabal,and immediately appointed a new prime minister.But it was neither Medvedev nor Ivanov. InsteadPutin nominated an old colleague from StPetersburg, Viktor Zubkov. He was as grey anduninspiring as Fradkov, but for most of the Putinpresidency he had headed a powerful anti-money-laundering unit, the Financial MonitoringCommittee, which made him privy to the financialsecrets of the elite. Few people had heard of him,yet within days the 66-year-old declared that hemight indeed run for president.

It wasn’t just outside observers that wereshocked. I happened to be with the Valdai group inMoscow that day, and we had an appointment withIvanov just two hours after he received the newsthat he was not, after all, heir presumptive. He

laughed it off as best he could, but it was clearfrom his demeanour that the news was as big ashock to him as to everyone else. His soaringcareer had suddenly belly-flopped. He said Putinhad not even discussed the move with him.

So was Zubkov the next president? Only ifYeltsin’s manoeuvring was seen as a precedent.But Putin was inventing new ways of doing things,and unlike Yeltsin he had no intention of anointinga successor and then obligingly stepping out ofpolitics. Two days later Putin opined that therewere ‘at least five’ viable candidates.Kremlinologists assumed he meant Zubkov,Ivanov, Medvedev, and … two others. Iunderstood from a Kremlin source that this was notmerely flak thrown up to disorientate the pundits:Putin himself had not yet decided.

It was only after the elections to the State Dumaon 2 December that Putin finally revealed hischoice – not that the result, which unsurprisinglygave his party, United Russia, 64 per cent of thevotes, affected his decision. It was neither Zubkovnor the former KGB man Sergei Ivanov, on whom

the dice fell, but the man who it seemed had beenpipped at the post, Dmitry Medvedev.

Again, it was a staged event, a pretence atdemocracy. The leaders of four parties, justelected to the Duma, came to Putin and put forwardMedvedev’s name. Putin feigned surprise, andturned to Medvedev, who happened to be present:‘Dmitry Anatolievich, have they discussed thiswith you?’

‘Yes, we had some preliminary discussions,’replied the candidate.

‘Well,’ Putin had to agree, ‘if four partiesrepresenting different strata of Russian societyhave made this proposal … I have known DmitryAnatolievich Medvedev for more than 17 years,and we have worked closely together all theseyears, and I fully and completely support thischoice.’

The following day, Medvedev declared that ifhe were elected he would nominate Putin for thepost of prime minister. After months of confusionand manoeuvring, the way forward was suddenlyclear. Putin would ensure his political longevity by

transforming the post of prime minister (without somuch as touching the constitution) from the quietback-office occupied by Fradkov and Zubkov intothe country’s real power-base.

Though born in the same city as Putin, and agraduate from the same law faculty, Medvedevwas 13 years younger and had a very differentbackground. Born in 1965, into an intellectualfamily, he graduated in 1987, at the height ofGorbachev’s efforts to democratise the communistsystem. The zeitgeist of the time was all aboutdebunking the KGB that Putin had chosen for hiscareer. Medvedev helped run the campaign of theliberal reformer Anatoly Sobchak (one of his lawprofessors) in the first genuine elections of the late1980s. Sobchak later became mayor of StPetersburg and hired both Medvedev and Putin towork in his external relations office – this waswhen the two men met. Medvedev later followedPutin to Moscow, becoming his deputy chief ofstaff in 1999 and running his election campaign in2000. As president, Putin appointed Medvedev aschairman of Gazprom, and later as his chief of

staff.There were several reasons why Putin may have

decided Medvedev was preferable to his mainrival, Ivanov: he was less charismatic, had nopower-base of his own, was less of a threat than afellow silovik (who might be tempted to ease Putinout of the way) and – not unimportant for a smallman – was even shorter than Putin. All in all, hewas much less imposing and threatening thanIvanov, the tall cavalier who had once sweptCondoleezza Rice off her feet. And there was theadded benefit that with his liberal reputation,Medvedev would go down well in the West,perhaps acting as a lightning rod and removing thestrain from Putin for a while. The task for the nextfour years would be to keep Medvedev on a tightleash, and at least leave the door open for Putin’sown return to the presidency.

We in the Kremlin’s hapless PR team sawanother opportunity to impress the West evaporate.An election between two establishment candidateswith different views on how to run the economywould have been the same as in most Western

democracies. But the Russian people were not tobe asked for their opinion. Putin’s choice was theonly one that mattered, and as the head of theCentral Election Commission, Vladimir Churov –a friend of Putin’s appointed less than a yearearlier – stated, ‘Churov’s First Law is that Putinis always right.’

State television gave Putin’s choice blanketcoverage, and Medvedev was duly elected on 2March 2008 with 70 per cent of the vote. TheCommunist Party leader, Gennady Zyuganov, wonalmost 18 per cent, and the nationalist VladimirZhirinovsky 9.5 per cent. The former primeminister Mikhail Kasyanov, the candidate for the‘democratic’ opposition, was registered as acandidate but later disqualified on the grounds thattoo many of the signatures gathered in his supporthad allegedly been forged.

When the result was announced Putin andMedvedev walked out together on to Red Squarein leather jackets and jeans, Medvedev trying toape Putin’s macho gait. Interrupting a rock concertin front of St Basil’s Cathedral, Medvedev made a

short speech affirming that the course of the lasteight years would be continued. When Putin tookthe microphone to praise his protégé, the crowd ofsupporters drowned him out, chanting, ‘Putin,Putin, Putin …’ Nobody chanted ‘Medvedev!’

Even after the election, and for a month or soafter Medvedev’s inauguration in May, the turmoilcontinued, as bureaucrats scrambled for what theythought would be the best seats. What I observed inthe Kremlin press department was probablymirrored throughout the administration: officialswere trying to work out where the real powerwould lie, in President Medvedev’s Kremlin or inPrime Minister Putin’s government, ten minutesaway in the ‘White House’ on the Moskva river. Inretrospect, the clever ones were those who movedto the White House, hoping to have a supervisoryrole over their counterparts in the Kremlin. DmitryPeskov took us on a valedictory tour of theKremlin in April, as Putin appointed him as hisspokesman.

‘How will it feel to move away from here?’Peskov twisted his moustache: ‘Who knows?

Who knows …?’Peskov’s move was part of a clever matrix of

appointments designed to maintain Putin’s controlover the new president. Peskov took with him tothe White House his long-time deputy AlexSmirnov, who became head of the prime minister’spress service, an entity that had scarcelyfunctioned under its predecessors. It was Peskov(rather than the president’s press secretary) whoappointed a new, young team to the president’spress service, making it clear that they answered tohim. Putin’s old spokesman and ally, AlexeiGromov, remained in the Kremlin, promoted tobecome President Medvedev’s deputy chief ofstaff, in a blatant attempt to maintain ‘ideologicalcontrol’ over the president’s media operation. Butthere was a fly in the ointment. Medvedev retainedNatalia Timakova, who had been his press adviserduring the election campaign, as his spokeswoman.She was a rival rather than a protégé of Peskov’s,and soon began to co-opt the team Peskov had putin place in the presidential press service. She wasfiercely devoted to the president, not the prime

minister. Within a year, a clear split wasdeveloping: not surprisingly, Medvedev’s teamsoon felt they owed their allegiance to thepresident, not to the people who had appointedthem. Over the next years I gained a strongimpression that the two press offices grew ratherfar apart, to the extent that each no longer knewwhat the other was planning.

I understand from well-connected sources thatthis situation was echoed in other departments too,so that by 2010–11 two competing bureaucraciesexisted, each knowing that their futures dependedon their respective bosses, and each thereforededicated to their own boss’s survival. This wasnot what Putin had intended.

Putin took with him from the Kremlin to theWhite House his presidential chief of staff, SergeiSobyanin, and also the influential economist IgorShuvalov. But he left behind some of his trustedsenior staff, to ensure ‘continuity’ underMedvedev. They included not only AlexeiGromov, in charge of the mass media, but alsoVladislav Surkov, who became Medvedev’s first

deputy chief of staff, Sergei Prikhodko, his foreignaffairs adviser, and Arkady Dvorkovich, hiseconomics adviser. The goal was to intertwine thetwo branches of the administration while ensuringthat Putin’s appointees in the Kremlin held sway.Instead they became drawn into their separateteams, serving their new masters. Even the‘ideologue’ Surkov changed his colours to supportMedvedev’s new initiatives, some of whichcontradicted what he had earlier preached forPutin.

Putin’s presidential legacyOn 8 February 2008, in the middle of the electioncampaign, Putin gave his last major speech aspresident – effectively his own assessment of hisachievements. In foreign policy, he insisted that‘we have returned to the world arena as a statewhich is taken account of’. Yet the detail soundedmore like a bitter admission of failure: ‘We drewdown our bases in Cuba and in Vietnam. What didwe get? New American bases in Romania,

Bulgaria. A new third missile defence region inPoland.’ Russia had failed to prevent the UnitedStates from ‘unleashing a new arms race with itsmissile defence system’, obliging Russia torespond by producing ‘new types of arms, with thesame or even superior specifications compared tothose available to other nations’. And he protested,like a stuck gramophone needle, that ‘irresponsibledemagogy, attempts to split society and to useforeign assistance and interference in the course ofpolitical struggle in Russia are not only immoral,but also illegal.’

But he delivered a glowing account of his ownachievements at home. Russia, he said, was nowone of the seven biggest economies in the world.‘The main thing we have achieved is stability. Wehave established that life will continue to improve.[Under Yeltsin] wealthy Russia had turned into acountry of impoverished people. In theseconditions we started to implement our programmeto take the country out of crisis. We consistentlyworked to create a robust political system. Wewere able to rid ourselves of the practice of taking

state decisions under pressure from financialgroups and media magnates.’

Economic growth was at its highest in sevenyears. Russia’s foreign debt had been reduced tojust 3 per cent of GDP. The last two years had seena ‘real investment boom’ in Russia. The birth ratewas rising.

And there was a reason, he implied, for certainpolitical restrictions. ‘Political parties,’ he said,‘must realise their huge responsibility for the futureof Russia, for the stability of society. It is neverworth taking the country to the edge of chaos.’ Thiswas a subtle reminder of the specious, unspokendeal Putin had offered, or rather imposed on, thecountry: that in exchange for growing prosperityand stability, political freedoms had to be curbed.

Putin’s opponents decried both elements of hisclaim: there was no correlation betweenauthoritarianism and economic growth, they said,and there was no real economic success anywaybecause the early liberal reforms had run theircourse.

In a damning report published in February 2008,

two of Putin’s major political opponents, BorisNemtsov and Vladimir Milov, conceded that someof the official statistics looked good: under Putinthe country’s gross domestic product had grown by70 per cent; incomes had more than doubled;poverty had been reduced, so that only 16 per centlived below the poverty line (as opposed to 29 percent in 2000); the budget was balanced, goldreserves stood at $480 billion, and theStabilisation Fund had reached $157 billion.

But … most of this had been achieved thanks tothe soaring price of oil, which had gone from anaverage of $16.70 a barrel under Yeltsin to anaverage of $40 under Putin (and was now headingfor $100). Instead of using the oil windfall tomodernise the economy and carry out economicreforms, the authors argued, ‘our army, pensionsystem, health care and primary education have alldegraded under Putin’.17 Meanwhile corruptionhad attained ‘gigantic proportions, without analogyin Russian history’, and those oligarchs whomPutin had not driven into exile or put in prisonwere making themselves fabulously rich at the

state’s expense. The recovery from the post-communist collapse had begun, they argued, notunder Putin but earlier, in the final years of theYeltsin presidency. Under Putin, instead of‘authoritarian modernisation’ – which, had itworked, theoretically might have allowed one toforgive some of the anti-democratic tendencies ofhis rule – there was ‘authoritarianism withoutmodernisation’. The brief period of progressivereforms had been replaced by ‘the greedyredistribution of property and the transformation ofRussia into a police state’.

Writing in Foreign Affairs magazine at exactlythe same time, the American scholars MichaelMcFaul (later nominated by President Obama tobecome ambassador to Moscow) and KathrynStoner-Weiss came to similar conclusions. Theywrote that although state resources had increasedunder Putin, allowing pensions and governmentsalaries to be paid on time, and greater spendingon roads and education, overall the state stillperformed poorly: ‘In terms of public safety,health, corruption, and the security of property

rights, Russians are actually worse off today thanthey were a decade ago.’18 Security, ‘the mostbasic good a state can provide for its population’,had worsened: the frequency of terrorist attackshad increased under Putin; the number of militaryand civilian deaths in Chechnya was much higherthan during the first war, and conflict in the NorthCaucasus region was spreading; the murder ratewas rising; the death rate from fires was around 40a day in Russia – roughly ten times the average ratein Western Europe. Health spending had gonedown under Putin, the population was shrinking,alcohol consumption had soared and lifeexpectancy had declined during the Putin years. ‘Atthe same time that Russian society has become lesssecure and less healthy under Putin,’ McFaul andStoner-Weiss wrote, ‘Russia’s internationalrankings for economic competitiveness, businessfriendliness, and transparency and corruption allhave fallen.’ Corruption, in particular, hadskyrocketed. Property rights had been undermined:not only had the state engineered the sell-off ofYukos assets to Rosneft, but the oil company Shell

had been compelled to sell a majority share inSakhalin-2 to Gazprom.

Such was the state of the Russia that DmitryMedvedev took over after his inauguration on 7May 2008. There were signs that he shared, or atleast understood, the kind of criticisms levelled athis predecessor’s record. The main sound-bite toemerge from his only election campaign speechwas ‘Freedom is better than non-freedom’, and inhis inauguration address he promised that ‘we mustachieve a true respect for the law and overcomelegal nihilism’.

In foreign affairs, Medvedev wanted to make aquick impression. He rushed to Berlin (just asPutin had done) shortly after becoming president tomake what he hoped would be a ground-breakingspeech, in which he grandly called for a newEuropean Security treaty. This, apparently (thoughit was not made clear), would replace all existingtreaties and alliances, making NATO and theOSCE redundant and, of course, giving Russia itsrightful place at the top table of a neworganisation. The initiative was largely ignored,

and not just because it was half-baked and raisedmore questions than it answered. It was ignoredmainly because it was divorced from reality:Russia was still acting in ways that reminded mostpeople of the USSR, it played gas wars with itsneighbours, appeared to condone the murders ofPolitkovskaya and Litvinenko, it bullied Georgiaand Ukraine ... nobody wanted lectures aboutEuropean security from a country like that. We inKetchum sent memos explaining that foreign policyinitiatives like this had to be part of a ‘package’,together with internal liberalisation, if they werebe taken seriously. We pointed out why MikhailGorbachev had been so successful: he was acommunist leader, but his arms-control gestureswere taken seriously because he had also initiatedglasnost and freed political prisoners. No one, wetold the Kremlin, would take their securityproposals seriously so long as they were rollingback democracy at home.

Maybe – one liked to think – PresidentMedvedev actually wanted to implement changesat home. But any hope of liberalisation was about

to be dashed, as Russia for the first time since itsinvasion of Afghanistan in 1979 went to war withone of its neighbours. The invasion of Georgia inAugust 2008 destroyed at a stroke all the effortsmade by Putin, and then Medvedev, to present theircountry as a truly post-Soviet, European,democratised and trustworthy power. The eventsleading up to the ‘five day war’, and the questionof who bore ultimate responsibility for it, weresurrounded with controversy – and obfuscated by afierce PR war in which the Georgians provedconsiderably more adept than the Russians. In thefollowing chapter I will attempt to shed some lighton what happened – without claiming to providedefinitive answers.

10

THE DESCENT INTOWAR

From Kosovo to BucharestOn Sunday 17 February 2008 Serbia’s breakawayAlbanian-majority province of Kosovo declareditself independent. The next day the United Statesrecognised it, and on Tuesday a reporter askedPresident Bush, ‘Isn’t this a poke in the eye toVladimir Putin and others who say you’reapproving of secession movements everywhereimplicitly?’

Bush replied: ‘Actually we’ve been workingvery closely with the Russians ... You know,there’s a disagreement, but we believe, as do manyother nations, that history will prove this to be acorrect move to bring peace to the Balkans.’

It was not the Balkans that Putin was worriedabout. Russia had good reasons to oppose therecognition of Kosovo – and its ‘brotherly ties’with Serbia were the very least of them. Pandora’sbox was open. However forcefully the Americansand their allies insisted that the Kosovo case forindependence was sui generis – a unique set ofcircumstances, setting no precedent – there were anumber of other secessionist nations around theworld who were delighted. If the Kosovars couldvote for independence and secede from Serbia,against the ‘parent state’s’ wishes, citing militaryattacks, ethnic cleansing and acts of brutalitycommitted against them, then could not theChechens say the same about their position withinRussia, or the Abkhaz and South Ossetians abouttheirs within Georgia?

Above all, Russia did not want to encourage

Chechen separatism, but it was also wary ofencouraging the South Ossetians and Abkhaz tosecede – precisely because of the precedent itcould set for other tiny nations within the formerSoviet Union, not least the chain of restive Muslimrepublics in Russia’s northern Caucasus region. Ata summit meeting of leaders from theCommonwealth of Independent States – the loosegrouping of former Soviet republics – PresidentPutin delivered an unambiguous warning of theconsequences: ‘The Kosovo precedent is aterrifying one,’ he said, shifting nervously in hisseat and almost spitting out the words. ‘It inessence is breaking open the entire system ofinternational relations that have prevailed not justfor decades but for centuries. And it will without adoubt bring on itself an entire chain of unforeseenconsequences.’

Mikheil Saakashvili, re-elected as president ofGeorgia the previous month, was sitting in theaudience, and gulped hard as he heard the Russianaccuse Western governments of a gravemiscalculation: ‘This is a stick with two ends, and

that other end will come back and knock them onthe head one day.’ In a separate meeting on themargins of the summit, Putin tried to reassureSaakashvili: ‘We’re not going to ape theAmericans, and recognise the independence ofSouth Ossetia and Abkhazia just because Kosovowas recognised.’ But Saakashvili did not believehim, and in any case he was as aware as Putin wasof the precedent set by Kosovo, and knew his ownbreakaway provinces might follow suit if he didnot act quickly. His attempt to move against SouthOssetia in 2004 had failed. Since then, withAmerican help, he had transformed his militaryinto a much more capable force. But if he wasgoing to use it to retake Abkhazia and SouthOssetia – risking confrontation with Russia – hewould need much more than just logistical supportfrom the Americans.

Speaking nine days after Kosovo’s declarationof independence, Saakashvili explained whyGeorgia was now keener than ever to join NATO.‘Why do we need NATO membership?’ he asked.‘We need it because Georgia should be

strategically protected in this very difficult andrisky region, and receive its share of securityguarantees.’ A crucial NATO summit wasapproaching – in Bucharest in April – at which thealliance would consider whether to allow Georgiaand Ukraine to embark on a Membership ActionPlan or ‘MAP’, considered the first concrete stepon the road to membership. To garner support,Saakashvili flew to Washington in March to flashhis democratic credentials around the corridorsand committee rooms of Congress and the WhiteHouse.

He was not short on flattery, telling GeorgeBush in front of the television cameras: ‘What weare up to now is to implement this freedom agendato the end, for the sake of our people, for the sakeof our values, for the sake of what the UnitedStates means to all of us, because the US isexporting idealism to the rest of the world.’

Bush could not suppress a smirk of delight; noone in the world supported him like this guy did.Damon Wilson, the president’s adviser onEuropean affairs, recalls: ‘He was terrific, he was

on message. He came into the president with amessage about the importance of recognising thathis legacy was building a democratic Georgia.This was music to our ears, this was the rightmessage.’1

And Saakashvili got exactly the answer he washoping for. ‘I believe Georgia benefits from beinga part of NATO,’ Bush told reporters. ‘And I toldthe president it’s a message I’ll be taking toBucharest.’

Not all the allies were so convinced, however,especially the French and the Germans. WhenSaakashvili arrived in Washington – before heeven reached the Oval Office – he received a callfrom the German chancellor, Angela Merkel.Saakashvili says the first thing he told Bush was, ‘Ijust had a call from our common friend, AngelaMerkel, and she said, “I know you are going tomeet with Bush to discuss the pending NATOsummit, and I wanted you to know from me that ourGerman position is that you are not ready formembership, and we will not support it.” ’2

According to eyewitnesses, Bush smiled and

told Saakashvili there were big players and smallplayers in the alliance: ‘You take care ofLuxembourg and leave Angela to me. I’ll take careof her.’

That was easier said than done, however. Boththe French and the Germans had two reasons todoubt Georgia’s fitness for NATO membership,and neither had to do with ‘appeasing Russia’.Firstly, they felt it was dangerous to admit acountry with ‘frozen’ internal conflicts, such asSouth Ossetia and Abkhazia. Secondly, they wereworried by Saakashvili’s personality and recentsigns that he was far from the democrat GeorgeBush saw in him.

In November 2007 police had violently brokenup huge anti-government demonstrations in Tbilisi.Saakashvili closed down an opposition televisionstation, Imedi, which had extensively covered theviolence, and declared a nationwide state ofemergency, accusing Russia of plotting a coupd’état against him. Even the White House had beenappalled, and Condoleezza Rice dispatched herassistant, Matthew Bryza, to Tbilisi to read

Saakashvili the riot act.But Washington and Berlin had a tacit agreement

not to air their doubts in public, and the Americanswere furious when Merkel went to Moscow, justdays before Saakashvili’s meeting with Bush inMarch, and stood side by side with Vladimir Putinto denounce Georgia’s (and Ukraine’s) NATOaspirations.

Merkel was hardly a member of the Putin fan-club. A year earlier, during talks in Sochi, she hadbeen horrified when Putin brought out his dog,Koni, and allowed her to sniff around thechancellor’s legs, knowing she was terrified ofdogs. (One of Merkel’s senior aides told me theyregarded this as ‘typical KGB intimidation’.)Having grown up in communist East Germany, sheknew at first hand what totalitarianism meant andwhat Putin’s background, working hand in handwith the Stasi secret police, said about him.

But Merkel did agree with Putin that if Georgiaand Ukraine began the process of joining NATO, itwould steeply raise tensions with Russia. At ajoint press conference in Moscow, Putin pointed

out that a majority of Ukrainian citizens did notwant to join NATO, and added: ‘Ultimately, eachcountry decides for itself how best to ensure itssecurity, and we will most certainly acceptwhatever the Ukrainian and Georgian peoplesdecide, but this has to be the decision of the peopleand not the political elite.’ Merkel concurred that‘it is important that the public in all future NATOmembers support their country’s membership’, andadded: ‘One of the obligations of NATO memberstates is that they be free from conflicts. This issomething we must reflect upon in our discussions,and it is also something we will be discussing atthe upcoming summit in Bucharest.’

Two days later, in Berlin, addressing a meetingof Germany’s military top brass, Merkel againwent public with her doubts: ‘I mean this seriously– countries ensnared in regional or internalconflicts cannot in my view be part of NATO. Weare an alliance for collective security and not analliance where individual members are stilllooking after their own security.’

According to Bush’s Georgia adviser, Damon

Wilson, the president realised he would have towork ‘personally and privately’ on Merkel to bringher round. ‘He decided the pivot point was thechancellor herself and that if he could help get heron board that he could help close the deal acrossthe alliance.’ Bush and Merkel held a series ofvideo conferences in the run-up to the Bucharestsummit. ‘And the remarkable thing is,’ saysWilson, ‘that when you listened to her articulateher concerns, they actually weren’t very differentfrom President Bush’s concerns. In Ukraine, wewere concerned about the lack of coherence ingovernance, the lack of popular support for NATOamong the population. In Georgia we both sharedconcerns about the durability, the depth ofdemocratic institutions.’ The big difference lay inhow to move forward. Bush argued that givingGeorgia a MAP for NATO membership wouldencourage them to ‘do their homework’, butMerkel was sceptical about even beginning theprocess. ‘She wasn’t convinced that Saakashviliwas a democrat,’ says Wilson.

In their final video conference there was

deadlock. For Bush it was a matter of principle tobe supporting fragile democracies, and he toldMerkel he would go to Bucharest to achieve that.‘OK,’ Bush told his aides afterwards, ‘we’reheaded for the OK Corral – guns drawn.’

Bush also put in calls to other allies. The Britishprime minister, Gordon Brown, indicated supportfor the American position. But the Frenchpresident, Nicolas Sarkozy, was another matter.The feedback the Americans were getting fromSarkozy’s advisers had put them on guard. Amember of Bush’s National Security Councilrecalls: ‘Many of them had argued to us that theywere sceptical that Georgia was even a Europeancountry, much less that we should be willing tobegin this conversation about them moving towardsalliance membership eventually.’

When Bush got through to Sarkozy personally,he felt the Frenchman was ‘gettable’: he talked ofUkraine and Georgia having a ‘European andAtlantic vocation’. But Sarkozy also wanted Bushto think about Russia. According to the Frenchpresident’s diplomatic adviser, Jean-David

Levitte, Sarkozy ‘tried to get him to understand thatin this situation, we were side by side with theGermans, in an approach which aimed to giveRussia time to understand that its future wasactually bound with that of Europe and its securityshould not be something that separates us, butrather something that brings us together, and thatthis vision meant that we shouldn’t try and push tooquickly to obtain a MAP, though we should give apositive signal in Bucharest to our partners inUkraine and Georgia.’3

And Sarkozy made a forceful new point to theAmerican president about what exactly NATOmembership would mean for Ukraine and Georgia.MAP was a ‘foot in the door’, an irreversible stepthat would lead to full membership of NATO – andthen you had to think about Article Five, thealliance’s mutual defence clause. ‘How manytroops,’ Sarkozy asked, ‘would we be willing tosend to assist our new members in the case of anattack?’ That was why France preferred to make apartnership with Russia the real priority, ‘so thateverybody within the continent had the same vision

of security’.Even within the US administration, there were

doubts. Defence Secretary Robert Gates andSecretary of State Condoleezza Rice shared someof the Europeans’ concerns about democracy inGeorgia and Ukraine. Gates recalls: ‘It seemed tome that in terms of the progress of the reformeffort, there was still a distance to be covered byboth countries.’4 But it was the ‘freedom agenda’advocates that won the day. ‘If the United Stateswere to back down in the face of Russian pressureand not give them MAP,’ national security adviserStephen Hadley remembers, ‘then actually that initself could be provocative, by suggesting to theRussians that they could permanently keep Georgiaand Ukraine out of NATO. And that was not aprescription for stability in Europe, that was aprescription for continued tension.’5

The Bucharest summit, held on 2–4 April in thebombastic palace built by the former Romaniandictator Nicolae Ceausescu, turned out to be asdramatic as any in the alliance’s history, with agood deal of undiplomatic mud-slinging passing

between the Americans and East Europeans whobroadly supported Ukraine and Georgia, and theFrench and Germans who found themselves cast as‘appeasers’ of the Russians. On the first evening,foreign ministers had discussions over dinner andfailed even to come close to a wording that thesummit would be able to approve. The Polishforeign minister, Radoslaw Sikorski, said he hadthe impression that ‘some allies’ (meaning theGermans) had made commitments to the Russiansthat MAP would not be granted to Georgia andUkraine.6

Condoleezza Rice says she had the feeling thatsome of the East Europeans were coming ratherclose to saying to the Germans that ‘you of allpeople should not be standing in the way ofcountries that suffered under tyranny thanks to whatthe Germans did in the 1930s and 1940s’.7

The German foreign minister, Frank-WalterSteinmeier, was simply insulted. He had tried toargue that there was a conflict situation in theCaucasus region and NATO risked getting drawninto it. But, he says, ‘things were said that I never

want to hear again, where people who wereagainst NATO enlargement were compared to [theappeasers of] Munich in 1938. Absolutelyinappropriate.’8

The plenary session of NATO leaders was dueat nine the following morning, but the Americansdecided to try to sort it out over an early breakfastbeforehand – with officials from the US, the UK,Germany and France, plus Poland and Romania.Damon Wilson admits it was a case of gatheringreinforcements: ‘We decided we needed to invitethe Romanians as host of the summit and the Polesas big players within the alliance. Obviously, theseare two countries that were quite supportive of ourposition.’

Jean-David Levitte, the French national securityadviser, recalls: ‘At one o’clock in the morningand again at three o’clock I was telephoned tomake sure I fully understood at what time andwhere the breakfast meeting was being held.’ But itturned out not to be an intimate, friendly breakfast,says Levitte, ‘but more like a tribunal’. A text wascobbled together which foresaw a period of

‘intensive engagement’ by NATO towards Georgiaand Ukraine, with another assessment of progressin December.

When the text was distributed just before the fullsession at nine o’clock, some East Europeanleaders were furious. The presidents of Lithuania,Poland and Romania all made it clear they foundthe wording ‘not even close to what we expected’.‘They went ballistic,’ says Stephen Hadley. ‘Theythought the document was a capitulation to Russianpressure and Russian veto, and they wantedchanges made.’ NATO adopts its decisions byconsensus, but as the leaders settled around thehuge round conference table, there was no sign ofone. Frantic efforts continued to broker acompromise, but not at the main table. Behind theheavy curtains draped around the hall, smallconstellations of advisers and foreign ministersgathered for ad hoc negotiations.

In an interview, Stephen Hadley recalled theremarkable scene that followed. ‘All the foreignministers get up and go to the back of the room, allmen in grey hair and suits. And then Angela Merkel

gets up, in a nice lime-green jacket, and goes backand sits down with these grey-haired men fromCentral and Eastern Europe. And soon Condi goesback too, dressed to the nines, and joins them too.And what language are they using? Of course it’sRussian! The language Angela learned in her youthin East Germany and Condi knows from her timeas a Russian scholar.’

It was Merkel who then grabbed the pen andwrote the deal-breaker sentence on a piece ofpaper: ‘We agree today that Georgia and Ukraineshall one day become members of NATO.’ Nomention of MAP – just affirmation that the twocountries will join NATO. The East Europeansthen protested that the words ‘one day’ were asgood as saying ‘never’, so the phrase was deleted.Condoleezza Rice, who had stepped away for afew minutes, came back and was pleasantlysurprised: ‘It said Georgia and Ukraine willbecome members of NATO, and I thought, this is apretty good deal, and I went to the president andsaid, “Take it!” ’

When the whirlwind passed, and the document

was adopted, Gordon Brown leaned over toGeorge Bush and joked: ‘I’m not sure what we’vejust done. I know we didn’t give them MAP, butI’m not sure we didn’t just make them members!’

It was a compromise whose consequenceswould only sink in later. Bush and the EastEuropeans were happy because it promisedUkraine and Georgia membership of NATO;Merkel was happy because it left it entirely open-ended as to when that might happen; Georgia andUkraine were generally pleased, but unhappy tohave their membership plans kicked into the longgrass; and Russia was furious.

Watching these events unfold, I found myselfwondering: would it not have been better if NATOhad taken Putin’s early innocent-sounding inquiriesabout joining NATO more seriously? Would it notmake more sense for the allies to be takingdecisions together with Russia – and Georgia andUkraine – rather than cobbling togethercompromises explicitly designed to take Russia’sviews into account while pretending they did not?

The roots of the problemIn the summer of 1991 I had spent several weeks inGeorgia, and witnessed the first ethnic convulsionsin Abkhazia and South Ossetia. Georgia had justdeclared itself independent of the Soviet Union,under an earlier nationalist leader, ZviadGamsakhurdia. Like Mikheil Saakashvili some 13years later, Gamsakhurdia moved to restrict theautonomy of the two territories, both of whichwanted to remain within the Soviet Union. Itprovoked a savage backlash.

Abkhazia’s Black Sea beaches were oncerenowned as the Soviet ‘Riviera’, but now theywere almost deserted, as Russians stayed away.The capital Sukhumi seemed to be braced forviolence, and it soon came. The civil war of 1992–93 led to a mass exodus of a quarter of a millionGeorgians (almost half of Abkhazia’s population),leaving the 93,000 Abkhaz, who had accounted forjust 18 per cent of the population, as the maingroup in their nominal national territory. Theregion now had de facto independence, supervised

by Russian peacekeepers and United Nationsmonitors.

In tiny South Ossetia, where Ossetiansaccounted for two-thirds of the almost 100,000population, civil war had already begun. TheOssetians had tried to declare independence, andGamsakhurdia sent in Georgia’s National Guard torestore order. It was my first experience of war. Iremember the road leading into the capital,Tskhinvali, empty and blocked at either end byarmoured vehicles and soldiers behind sandbaggedbarricades, as one of the bleakest places I had everseen. Knots of Georgian refugees stood around,staring down the road to where their houses hadburned down. Some were waiting for a militaryescort to accompany them through Ossetianterritory to Georgian villages. In Tskhinvali, stillfull of the communist slogans already abandoned inthe rest of Georgia, an Ossetian woman told me thekind of horror story that I would hear so often inother tortured parts of the former Soviet Union inlater years: ‘Georgia doesn’t feed us. They just killus. They pull out people’s fingernails, gouge their

eyes out, burn their houses.’ I heard Georgians tellthe same kind of hysterical stories about Ossetians.In one village I was shown a smoked-out bus inwhich, it was said, four Georgians had beendoused with petrol and burned to death.

In a Tskhinvali school, I saw a fresh graveyardfor ‘the victims of Georgian fascist terror’.Ossetians now received all their supplies fromNorth Ossetia, through the Roki tunnel. I wrote atthe time that it was ‘hard to imagine how the twocommunities could ever again live at peace’.9

For the next 17 years, Abkhazia and SouthOssetia lived as separate entities, with tense andtenuous ties to Georgia, and a growing reliance onRussia. Under Putin their stateless citizensreceived Russian passports. Like Abkhazia, SouthOssetia was patrolled by a Russian-ledpeacekeeping force. OSCE monitors tried to keepthe lid on trouble.

Logically, Putin and Saakashvili should havebeen on the same side over these ‘frozen conflicts’.Russia supported the regional governments, buthad resisted their calls for recognition for many

years, and Putin was not at all keen to add to theKosovo precedent by recognising them. He wouldthen have had no argument whatsoever against thedemands of Chechen separatists. Putin’spreference was to negotiate the two regions backinto Georgia, with appropriate guarantees for theirautonomy. But on the other hand he would not, andcould not, allow them to be taken by force.

Galloping to warCampaigning for re-election in January 2008Mikheil Saakashvili vowed to recover bothregions. He described the South Ossetian capitalTskhinvali as a ‘loose tooth ready for removal’and promised to recapture it ‘within months at themost’.10

The Kosovo precedent and the Bucharest fudgeseemed to spur him on. Perhaps he felt he mustresolve the ‘frozen conflicts’ quickly, since thesehad been cited as the main impediment to NATOmembership. The day after the Bucharest summit,

the Swedish foreign minister Carl Bildt had dinnerwith Saakashvili in Tbilisi, and was so alarmed bythe latter’s talk of possible military action to retakeAbkhazia and South Ossetia that he called hisAmerican colleagues to warn them. Bushresponded to Bildt’s news by calling Saakashvili:‘Dear friend, let me be clear: there is no way wewill support you. Yes, you are a sovereign leaderand we respect you. But you will not get USsupport if you choose to initiate the use of force.’

It has been suggested that Saakashvili hadreturned from his trip to Washington in March withthe false impression that he had been given somesort of green light by President Bush toreincorporate the rebel republics. Damon Wilsonstrongly denies that Bush gave any sort ofencouragement for military action. ‘The presidentcouldn’t have been clearer in underscoring that themilitary course was not a viable path at all. Hewas encouraging the diplomatic track, cautioningagainst taking matters into their own hand.’11

But Saakashvili was losing faith in thediplomatic route. A few weeks before Bucharest,

the State Duma had declared that ‘the path taken bythe Georgian authorities towards full integration inNATO deprives Georgia of the right to consolidateits territory and the peoples living on it’. Then, on16 April, Russia suddenly ‘upgraded’ itsdiplomatic relations with the two territories. Thetwo moves had all the appearance of a concertedstrategy to prevent the reintegration of Georgia’sregions – or even to annexe them. According to aRussian military analyst, Pavel Felgenhauer, it wasaround this time that Moscow took a decision to goto war: ‘The goal was to destroy Georgia’s centralgovernment, defeat the Georgian army, and preventGeorgia from joining NATO.’12

That was certainly the feeling in Tbilisi, wheresome in the leadership were itching to go. A seniorUS official had a conversation with Georgiansecurity ministers in April where they said: ‘TheRussians have already positioned themselves totake over. We think they are preparing to moveforces into our country, assembling them in Russia.We Georgians have our sources. So we think it isbetter to move first rather than just wait and let

them march in and take over.’The US official responded: ‘You know that is

suicide.’And the Georgians replied: ‘Well, if they cross

that red line, maybe we would rather die as truepatriots and real Georgian men!’

Throughout the spring of 2008 Russia andGeorgia each claimed the other was about to attack– and Abkhazia seemed the likelier flashpointrather than South Ossetia. Russia sent troopreinforcements to the region; the Georgiansincreased their forces in the Upper Kodori Valleydistrict which they controlled. Georgia flewunmanned reconnaissance drones over the regionto monitor Russian troop movements. The Abkhazcalled this a violation of their sovereignty, andRussian fighters shot some of the aircraft down. Inlate April the Russian foreign ministry claimed thatGeorgia was planning a military intervention inAbkhazia, and Russia vowed to use ‘all’ itsresources to protect Russian citizens in the twodisputed territories. In early May CondoleezzaRice expressed concern over the rising Russian

troop levels in Abkhazia, and a week later theGeorgians released footage shot by areconnaissance drone which apparently confirmedthe movement and deployment of Russian troopsand military hardware in Abkhazia.

At the end of May Russia announced it wassending 400 ‘unarmed’ troops to Abkhazia torepair a railway line. The Georgians took this asproof that they were preparing for an invasion, andthe leadership began frantic discussions aboutwhether to launch a pre-emptive strike. Ininterviews, three members of the Georgianleadership recalled the kind of arguments theywere making at the time. Giorgi Bokeria, deputyforeign minister, said, ‘The major question was atwhat point does it become impossible for asovereign state not to react, even when we don’tknow for sure if the aggression will be massive ornot?’13 Batu Kutelia, deputy defence minister, said,‘Our citizens need to know that Georgia canprotect them and that Georgia can react to theseactions that cause concern for the Georgian people,that their country will use all its resources to

destroy that threat.’14 Nino Burjanadze, chair of theGeorgian parliament, cautioned some restraint:‘Some people tried to persuade the president andmyself that the Russians had rusty tanks, that wehad modern equipment and that Georgia woulddefeat the Russians in one night. Almost all theSecurity Council wanted to start a militaryintervention in Abkhazia.’15

President Saakashvili, for all his eagerness toreclaim the ‘lost’ territories, decided to givediplomacy another chance. Russia, after all, had anew president, Dmitry Medvedev. And even PrimeMinister Putin was sending mixed signals. Just asthe Russians were sending railway troops intoAbkhazia, Putin was asked by the Frenchnewspaper Le Monde what he thought aboutSaakashvili’s ‘peace plan for Abkhazia granting anunprecedented degree of autonomy’ and ‘giving thepost of vice-president of the Georgian state to anAbkhaz national’. ‘I very much hope that the planproposed by Mikheil Saakashvili will gradually beintroduced,’ Putin replied, ‘because it is on thewhole a sound plan.’

A few days later, on the margins of a summit ofpost-Soviet states in St Petersburg on 6 June,Saakashvili held his first talks with Medvedev.Both men appeared to approach them in a positivemood, as if they were really starting from a freshpiece of paper. ‘I think we will be able to resolveall the difficulties we face today and find long-term solutions. What do you think?’ saidMedvedev.

‘I agree,’ replied Saakashvili. ‘There are nounsolvable problems. There are plenty of unsolvedones, but no unsolvable ones.’

Recalling the meeting later, Saakashvili said:‘He seemed to have a very different style fromPutin. He was open, he was engaging.’(Saakashvili has a similar recollection of his firstmeeting with Putin.) The Georgian was encouragedto hear Medvedev suggest that he had ‘inheritedthese situations and didn’t initiate them’, andwanted to resolve the Ossetian and Abkhazianconflicts ‘within the framework of the territorialintegrity of Georgia’.16 That amounted to a pledgethat Russia was not interested in annexing the two

regions and regarded them as part of Georgia.Saakashvili said he left the meeting ‘full of

hope’ and that Medvedev had suggested gettingtogether in Sochi to ‘sit down and look at thedifferent options’. But he did not mention that – asSergei Lavrov points out – the prerequisite for anyprogress, as far as Russia was concerned, was thatGeorgia, given its stated intention to regain the twoterritories, should sign a non-use-of-force pledge.In an interview, Medvedev’s diplomatic adviserSergei Prikhodko confirmed: ‘The key thing was aproposal to put together a document on non-use offorce. They even named the venue where it couldhappen, in Sochi. Saakashvili reacted, as far as Irecall, quite positively.’17

But the question of a non-use-of-force agreementwould bedevil relations over the next months.Saaskashvili says the Russians wanted Georgia tosign such an agreement with the Abkhaz and SouthOssetians – with the Russians as guarantors. Butfor Saakashvili that was ‘like giving a fox amandate to guard a chicken house’. He would onlyagree to sign a non-use-of-force agreement with the

Russians. But the Russians responded: why shouldwe do that? We are not combatants in the area, weonly have peacekeepers there.

Both men agreed that there was no point inmeeting until they had narrowed their differencessufficiently for there to be a practical outcome. Inthe middle of June they exchanged confidentialletters, which I have seen. Saakashvili sentMedvedev what he believed were a few helpfulproposals to reduce tension in Abkhazia, but hisletter – and Medvedev’s reply – revealedfundamental disagreements. Saakashvili proposedthe removal of Russian peacekeepers from theareas of Abkhazia closest to Georgia, and thereturn of Georgian refugees to these areas (Galiand Ochamchira) which would be jointlyadministered by Georgia and Abkhazia. Only afterthis (in December, Saakashvili conjectured) couldthere be an agreement on the non-use of force, andon the return of Georgian refugees to the rest ofAbkhazia. As a sweetener, Saakashvili offeredGeorgia’s help in preparing the 2014 WinterOlympics in Sochi, which is just north of Abkhazia

– but in the meantime he called for the ‘rapidwithdrawal’ of Russian military reinforcementsand the annulment of Putin’s directive of 16 Aprilupgrading relations with the breakaway regions. Inhis reply Medvedev welcomed the offer to helpwith the Sochi Games, but politely rejectedeverything else as pie in the sky. It was hard toimagine, he said, joint Georgian–Abkhazadministration of any part of Abkhazia, and it waspremature to speak of the return of refugees. Thepriority was for Georgia to take real measures toreduce tension, and, above all, to sign a non-use-of-force agreement with the Abkhaz side and towithdraw Georgian troops from the Kodori Valley.If Saakashvili would agree to that, Medvedevoffered a summit meeting to sign the relevantdocuments in July or August.

The Russians tried to work through theAmericans to put pressure on their ally. SergeiLavrov called Condoleezza Rice and said:‘Saakashvili is playing with fire. Keep him awayfrom adventuring. Convince him to sign anagreement for non-use of force.’

Rice replied, according to Lavrov: ‘Sergei,don’t worry. He wants to be a member of NATO.He knows very well that if he uses force, he canforget about NATO.’ Rice remembers theconversation. She says she even added: ‘It will beanother generation before they are in NATO if theyuse force.’ But she also told the Russians that theirown menacing actions were making it ‘difficult forSaakashvili in terms of domestic audiences to signa no-use-of-force pledge’.

Medvedev and Saakashvili had one moreencounter before war became inevitable. It was asteamy Saturday night in Astana, the capital ofKazakhstan. The next day, 6 July, was PresidentNursultan Nazarbayev’s birthday, and he hadbrought exalted guests from many countries to anexclusive nightclub to celebrate. Medvedev haddeclined to meet Saakashvili for formal talks, butthe Georgian approached him several times.Medvedev recalled later: ‘He’s a difficult man toavoid, because if he wants to get hold of you hesticks to you! We talked while sitting on a bus, andwe talked while taking a walk in the park. In the

evening we went out for a cup of tea and a glass ofwine ... we sat on a sofa and kept discussing theprospect of a meeting.’

The two men have different, and contradictory,memories of these conversations. Since it appearsto have been a crucial moment in the breakdown ofcommunication, leading a month later to war, thetwo versions deserve to be told.

Saakashvili says that he pressed for a follow-upsummit in Sochi, as discussed at St Petersburg, butthat Medvedev was evasive and hinted he was notin control: ‘He said, “You know, I’m so pleased tobe with you here, and we are listening to the samemusic, we like the same social environment, weare at ease with each other. In many ways we mighthave the same background, but back in Moscowthere are different rules of the game, and I wouldnot be easily understood if I rushed to a meetingwith you now.”

‘And I said, “Look, a meeting is better than nomeetings and we should get somewhere.” But hesaid, “A meeting now will be a disappointmentbecause we will not get anywhere, and we might

come off even worse than before.” And I tell him,“Dmitry, come on, what could be worse than wehave now? We have daily provocations, things arereally spiralling out of control, we have theseincidents on the ground, it cannot get any worse.”And here he stopped me and said, “Well, I thinkyou are deeply mistaken here. You will see, verysoon, it might get much, much worse.” And then hebasically turned around and left.’

It must be stressed that Saakashvili wasspeaking with the benefit of hindsight – after thewar that broke out one month later. One must alsoremember that he has a mission to shape the historyof those events to his own advantage. But heimplied two interesting things: first, that Medvedevhad indicated he was not fully in charge of policy(this is credible, given that Medvedev had been inoffice for only two months), and, second, that hehad hinted darkly that Russia was planning militaryaction (though Medvedev’s words can also be readas simply meaning that events were spinning out ofcontrol). The important thing, when piecingtogether the events that led to war, is that

Saakashvili interpreted Medvedev’s words as athreat – which he might have been tempted toforestall.

Saakashvili concludes his story of the nightclubencounter somewhat melodramatically.‘Apparently I was looking nervous. Nazarbayevcame to me and said, “Misha, what’s wrong withyou? I’ve never seen you so pale – what did he tellyou?” I said, “Nothing.” And then he said, “Don’tworry, things will be sorted out, you know, givehim some time, I’m sure you can find a way.” ’18

In an interview with Ekho Moskvy three yearsafter the war, Saakashvili said that after Astana hetried repeatedly to call Medvedev but was alwaystold: ‘Wait. We’ll call you when it’s time.’Saakashvili interprets Medvedev’s evasiveness asproof that ‘he was no longer inclined to have aserious conversation’ because ‘he knew whatcould [be about to] happen’.19

Medvedev’s account is entirely different. Hesays the two did agree to meet again for ‘a seriousdiscussion’ in Sochi, but Saakashvili then wentominously quiet. ‘I can tell you earnestly: I spent

the next month checking regularly for any feedbackfrom our Georgian counterpart. There wasnothing.’ Both Medvedev and three other seniorRussians all made the same point in interviews(clearly it is the conclusion they reached in theirinternal discussions later): that Saakashvili, forwhatever reason, fell silent after he was visited byCondoleezza Rice in Tbilisi four days later.Medvedev said: ‘Following that visit, myGeorgian colleague simply dropped allcommunications with us. He simply stoppedtalking to us, he stopped writing letters and makingphone calls. It was apparent that he had some newplans now.’20

It is undeniable that Rice sent mixed signalsduring her visit – indeed she says so herself. Sheflew to Georgia on 9 July. The day before, theRussians had engaged in a little more sabre-rattling– flying warplanes over South Ossetia ‘to cool hotheads in Tbilisi’, as the foreign ministry put it.Dining in the Kopala restaurant, on a verandaoverlooking the Mtkvari river, Rice again insistedto the Georgian leader that he had to reject the use

of force.‘Why should I do that?’ he replied. ‘I will get

nothing for it.’Rice replied: ‘You’re going to have to do it, you

have no option ... If you engage Russian forces,nobody will come to your aid and you will lose.’21

Her tough words in private, though, gave way inher public statements to what Saakashvili mayhave seen as encouragement for his plans. At apress conference before leaving Tbilisi, Ricestrongly endorsed Georgia’s territorial integrityand criticised Russia, adding, ‘We take very, verystrongly our obligation to help our allies defendthemselves, and no one should be confused aboutthat.’ In an interview Rice said this was no idlepromise: ‘It was very important for the Georgiansto know that if they did the difficult things, theUnited States would stand by them, if the Russiansdidn’t stand by their obligations. And I absolutely,deliberately – in front of the press – said that theUnited States would stand by Georgia.’

The Russians, it seems, believe that Saakashviliheard in this the encouragement he needed.

Medvedev says: ‘I don’t believe the Americansurged Georgia’s president to invade. But I dobelieve that there were certain subtleties andcertain hints made ... which could effectively feedSaakashvili’s apparent hopes that the Americanswould back him in any conflict. In politics,connotations and nuances are very important.’

In short, Medvedev believes Saakashvili tookencouragement from Rice’s words and decided toinvade South Ossetia, and therefore stoppedcommunicating with Moscow. Saakashvilibelieves Medvedev stopped communicatingbecause he had been told to shut up by Putin, whohad already taken a decision to invade Georgia.Whatever the truth, there was now silence, andtherefore little hope of avoiding war throughdiplomacy.

A few days later, the Russian 58th Army beganmassive military exercises across the whole of theNorth Caucasus, involving 8,000 troops, 700combat vehicles and 30 aircraft. At the same time1,630 US and Georgian forces conducted militaryexercises in Georgia called ‘Immediate Response

2008’. Remarkably, despite the tension andcontinuing skirmishes in South Ossetia, theleaderships in both Georgia and Russia appearedto think the situation was calm enough to go onholiday. One senior American who visited Tbilisiin July recalls having dinner with members of theGeorgian leadership before they went away,Saakashvili to a health farm in Italy, deputy foreignminister Bokeria to Spain: ‘They were prettyhappy, and totally relaxed, hugging each other with“see you in a month or three weeks, make sure youdon’t think about work!” ’

In the first week of August almost the entireRussian leadership also went on holiday, just asthe worst Georgian–Ossetian skirmishes in fouryears erupted in South Ossetia. In the next daysthousands of Ossetians evacuated their families tothe safety of North Ossetia. On Wednesday 5August an official in the Russian governmentgloomily told me it was not a question of ‘whether’there would be war: ‘There will be war.’ Iterupted finally on the night of 7–8 August, with amassive Georgian assault on the South Ossetian

capital, Tskhinvali, followed by a Russianinvasion that swarmed deep into Georgia, farbeyond the confines of the disputed region itself.The war was almost universally blamed – at leastat first – on Russia, and comparisons were drawnwith the Soviet invasions of Hungary andCzechoslovakia. Russia’s reputation suffered itsgreatest blow since the end of communism, thougha European Union commission which was set up toinvestigate the war apportioned blame moreevenly, concluding that Georgia aggressed first,with force that was not ‘justifiable underinternational law’. The report also said that bothsides had contributed to the build-up of tensionsbeforehand, and that Russia’s reaction wasdisproportionate, going ‘beyond the reasonablelimits of self-defence’.

The war and its consequencesPresident Saakashvili, who had announced aceasefire at 19:00 on 7 August, ordered his forcesto attack Tskhinvali at 23:35. A huge artillery

bombardment, using tanks, howitzers and Gradmultiple-rocket launchers, destroyed swathes ofthe city and caused many civilian casualties.Georgian ground troops moved in. Russianpeacekeepers were killed, as well as manyOssetians, who by virtue of Putin’s‘passportisation’ policy were now Russiancitizens. The Russians evoked ‘genocide’,claiming 2,000 civilians had been killed in theGeorgian attack, a figure that proved to be grosslyexaggerated. The next day hundreds of Russiantanks poured through the Roki tunnel, with massiveair support. Over the next five days 40,000Russian troops entered Georgia, half of themthrough South Ossetia, the others through Abkhazia.They quickly drove Georgian forces out ofTskhinvali and proceeded into Georgia proper,bombarding the city of Gori, attacking airfields andarmy bases across the country, and even destroyingthe port of Poti, many miles from the disputedareas. Hundreds of thousands of Georgians fledtheir homes as Russian forces headed southtowards the capital, Tbilisi. In Gori, South

Ossetian militias rampaged through the empty city,while Russian troops turned a blind eye.Eventually, international diplomacy broughthostilities to a halt, and the Russian advancestopped. The five-day war left 850 dead and35,000 people displaced from their homes.

Such are the basic facts, but how and why it allstarted was, and remains, a subject of bitterdispute. Shortly after the initial assault onTskhinvali, Georgia’s military commander,Mamuka Kurashvili, appeared to confirm thatPresident Saakashvili had decided to press aheadwith his long-held desire to re-conquer SouthOssetia, when he told reporters that Georgia had‘decided to restore constitutional order in theentire region’. It was later said that this statementhad not been authorised, though Saakashvilihimself announced that ‘a large part of Tskhinvaliis now liberated’. The Georgians later tried tojustify their actions by claiming that they hadresorted to force only to counter a huge Russianinvasion that was already under way, but mostobservers (including the EU mission) say there is

no evidence of a large-scale Russian invasion inthe hours before the Georgian attack. IndeedSaakashvili himself did not make such a claim atthe time, and the Georgian government told a UNSecurity Council session on 8 August that ‘at 05:30[that day] the first Russian troops entered SouthOssetia through the Roki tunnel’. In interviewsconducted two years later with several members ofthe Georgian government, they seemed hopelesslyconfused about the timeline.

That the Georgians attacked first, and that it wasan attempt not to repulse a Russian attack but toretake South Ossetia, is also confirmed by aconversation the Polish foreign minister RadoslawSikorski had with his Georgian counterpart EkaTkeshelashvili the day before the attack onTskhinvali. ‘Eka called me and said they weregoing to establish constitutional authority overSouth Ossetia. What I understood was that theywere moving in. I warned her not to overplay theirhand and to be very careful, because allowingyourself to be provoked would have direconsequences.’22

The fact that President Medvedev was onholiday on a Volga riverboat, Prime Minister Putinwas in Beijing for the opening of the OlympicGames and foreign minister Lavrov was in themiddle of Russia (four-and-a-half-hours’ flightfrom Moscow), and all had to rush back toMoscow to deal with the crisis, also suggests thatRussia was taken by surprise and did not instigatethe attack – even though its army was clearly wellprepared to respond.

So why did this war erupt when it did? Only aweek or so earlier, Georgia’s leaders had been onholiday. Their best troops were serving in Iraq.Although Saakashvili wished to regain the lostterritories, he appeared to be giving diplomacy alast chance. As late as 7 August, Georgia’snegotiator, Temuri Yakobashvili, even went toTskhinvali for planned talks that failed tomaterialise (because the South Ossetian siderefused to take part and the Russian special envoyfailed to arrive, saying he had a flat tyre). Russia,it is true, had been sabre-rattling – but mainly todissuade Georgia from attacking rather than

because it was contemplating an attack itself;Moscow in fact had little to gain from attackingGeorgia and had never (despite claims to thecontrary) shown any desire to annexe or evenrecognise the two regions. Its clobbering ofGeorgia and subsequent recognition of SouthOssetia and Abkhazia as independent ‘states’should not be seen as retrospective proof that thiswas what it intended to do all along.

It seems to me that right up until the eve of battleneither side was seriously planning to go to war(though both were preparing for it). That wouldmean that the fatal decision was taken at the lastminute by Saakashvili and his closest advisers.Perhaps they felt that the world’s eyes were on theOlympics in Beijing; perhaps they weighed upeverything they had heard from the Americansrecently and decided that, on balance, they wouldhave their support; perhaps they really were givenintelligence (even if it was false) that the Russianswere already streaming through the Roki tunnel;perhaps they saw the failure of the Russians andSouth Ossetians to turn up for talks with their

negotiator as an ominous sign, and Medvedev’sevasiveness and hint that ‘things could get worse’as a threat; perhaps they jumped at what theythought was an unexpected opportunity to retakeSouth Ossetia. Whatever the reasons, the decisionconfirmed the worst fears of Saakashvili’sAmerican and other Western colleagues – wholiked him, respected him, loved his democraticcredentials, but were very alive to hisunpredictability, his impulsiveness, even hisinstability. One of the enduring images of the waris of Saakashvili, recorded by a BBC camera as hewaited to go on air for a live broadcast, nervouslystuffing the end of his tie into his mouth. TheRussians leapt on this as proof of his ‘insanity’.But many of his Western colleagues also had theirdoubts. When Angela Merkel had talks with him asa peace settlement was being thrashed out, he wasextremely agitated, drank from an empty glass andknocked a bottle of water across the table.

One senior American official (extremely closeto Saakashvili) witnessed a top-level get-togetherin Tbilisi, after midnight, a few weeks before the

war: ‘My impression was just – what a rip-roaringand disorganised way to make really importantdecisions. But it is the Georgian way – it is at leasthow that group does things. I mean, they weren’tdrunk, they weren’t juvenile or stupid, they werejust kind of shooting the breeze. I came in and theysaid, “You say we don’t have an interagencycoordination process, well this is how we do it.Would you like some wine?” ’

Though it was Georgia, in the end, that lit thetouch-paper, it was Russia that found itself in thedock for the conflagration. Partly, this was becauseviews were coloured by the initial internationaltelevision coverage of the war, which showedlittle, if any, of the Georgian bombing anddestruction of Tskhinvali and a great deal of thesubsequent Russian bombing of Gori. That in turnhappened because the Russians kept journalists outof South Ossetia, whereas the Georgians positivelyencouraged the press to go to Gori. The BBC’sforeign editor, Jon Williams, noted in a blog: ‘It’snot been safe enough to travel from Tbilisi to thetown of Tskhinvali in South Ossetia, the scene, say

the Russians, of destruction at the hands of theGeorgians. Not until Wednesday – six days afterthe first shots were fired – was a BBC team able toget in to see what had happened for themselves,and then only in the company of Russian officials.’

The role of PR advisers in the war has beenmuch written about, and much exaggerated.Georgia’s principal asset was PresidentSaakashvili himself, who gave a constant stream ofinterviews, in fluent English and French – without,I fancy, much encouragement from his Western PRteam. Moscow, on the other hand, steadfastlyresisted the urgings of its PR advisers to allowjournalists to travel to South Ossetia, and onlybelatedly began to offer English-speakinginterviewees to stations such as the BBC andCNN.

But the main reason for the opprobrium heapedupon Russia rather than Georgia was because –whatever the circumstances – it invaded aneighbouring, independent country. It did this inorder to prevent that country from doing somethingabsolutely legitimate under international law –

restoring (albeit in brutal fashion) its territorialintegrity in precisely the same way as Russia hadrestored its rights over Chechnya. The Russianleadership was incapable of seeing this parallel. Itaccused the West of tolerating Georgia’saggression, forgetting that the West had by andlarge also tolerated Russia’s much more brutalassault on Chechnya. Both cases were seen by theWest as internal affairs. Attacking a foreigncountry is different. As the Russian journalistAndrei Kolesnikov of Novaya gazeta put it,‘Russia behaved as if it were the mother countryand Georgia was its remote, rebellious province.’

The result was the dismemberment of Georgia, asovereign state, and the permanent displacement ofhundreds of thousands of people, mainlyGeorgians, from their homes on land that they andtheir ancestors had inhabited for centuries. In thecase of Abkhazia, the Russians effectively handedthe territory, now ‘ethnically cleansed’ ofGeorgians, to a tiny nation who prior to 1991 hadcomprised just one-fifth of the population.23 One-sixth of Georgia’s territory is now occupied by

Russian troops.In Beijing, only hours after the Georgian assault

began, Vladimir Putin met both President Bush andPresident Sarkozy. Both tried to caution restraint inRussia’s response, and both were rebuffed. Putinwas no longer commander-in-chief, but he acted asif he was. Sarkozy introduced Putin to his son,Louis, who received a warm hug – but that was thelast of Putin’s friendly gestures. Sarkozy’s aide,Jean-David Levitte, recalls his boss’s attempt atpeacemaking. ‘He said to President Putin, “Listen,I currently hold the presidency of the EU and I canmake the EU do everything possible to stop thiswar, a war that would be a catastrophe for Russia,for Europe, and for Russian and Europeancooperation. But for that, Vladimir, I need 48hours.” The answer? “Nyet.” So President Sarkozysaid, “Hang on, Vladimir, do you realise what’s atstake here? At least give me 24 hours.” “Nyet,impossible.” The president said, “Well, give meuntil 8pm.” “Nyet.” ’24

It was President Medvedev, though, who tookthe decision to send in Russian forces. He claims,

somewhat improbably, that he did not even discussthe matter with Putin for 24 hours, due to theabsence of a secure line to Beijing. Medvedevsays that he was woken by the defence minister tobe told of the attack on Tskhinvali, but hoped itwas just a provocation. It was only when he wastold that a tent full of Russian peacekeepers hadbeen hit, killing them all, that he gave the order tocounterattack. Anyone who believed thatMedvedev was a ‘softie’ compared to thestrongman Putin would be mistaken. It was thepresident (he says) who ordered the invasion –without even consulting his Security Council. TheCouncil did eventually meet, and supported thedecision, but this was still before Putin arrivedback from China. Eventually Putin returned, flewto Vladikavkaz in North Ossetia, to see thesituation on the ground for himself, and then toSochi, where he finally met Medvedev to discussthe situation.25

On the second day of the war, Russian bombersflew 120 sorties, aiming to destroy Georgia’sdefence infrastructure – including all the shiny new

hardware acquired from the USA, Israel andUkraine.

The next day Condoleezza Rice, who had juststarted a vacation with her aunt and sister at theluxury Greenbrier resort in West Virginia, calledSergei Lavrov and demanded an end to theinvasion. The conversation became a major boneof contention between the two. Lavrov said theRussians had three conditions: ‘First, theGeorgians have to go back to their barracks.’

Rice said, ‘OK.’‘Second, they have to sign a non-use-of-force

pledge.’‘OK.’‘And three, just between us, Saakashvili has to

go.’Rice could not believe her ears: ‘Sergei, the

American secretary of state and the Russianforeign minister do not have a private conversationabout overthrowing a democratically electedpresident.’26

She decided to go public with what sheregarded as a Russian threat of regime change in

Georgia. On 10 August the US envoy to the UN,Zalmay Khalilzad, announced: ‘Foreign MinisterLavrov told Secretary Rice that the democraticallyelected president of Georgia – and I quote –“Saakashvili must go” – end of quote. This iscompletely unacceptable and crosses a line.’

Lavrov was incensed. He said in an interview:‘To announce to the entire world what you havediscussed with your partner is not part of ourdiplomatic practice.’ He did not entirely deny thathe had said it, though, but insisted he merelyindicated ‘that we would never deal with himagain’.27

By 11 August the Georgians, having seen Goribombarded and emptied of its citizens, believedthe Russian army was planning to move on thecapital, Tbilisi. There was panic in the president’schancellery: pictures were taken off the walls,documents stuffed into boxes in readiness for aquick evacuation. Carl Bildt and the Americanenvoy, Matt Bryza, were there, calculating they hadlittle more than half an hour before the Russianswould enter the city.

Saakashvili appealed to President Bush for thehelp he thought had been promised. ‘I told him,“Look, right now, on your watch, you might see thereversal of the demise of the Soviet Union. It mightbe restored right now in my country, and it wouldbe a very sad turn of history – for us certainly, forus it would be the end – but certainly for the USand for the world.” ’28

His allegation that Russia was about to enter hiscapital and reincorporate Georgia into some newversion of the Soviet Union could have been seenas either paranoid, manipulative or simply as adisingenuous attempt to cover up his owncalamitous decision to go to war. But Medvedevlater indirectly confirmed that, while ‘our missionat the time was to destroy Georgia’s war machine’,more radical options were considered:‘Saakashvili should be grateful to me for haltingour troops at some point. If they had marched intoTbilisi, Georgia would most likely have a differentpresident by now.’

The threat was taken seriously in Washington,especially in view of Lavrov’s comment to Rice.

Bush convened his national security team. DefenceSecretary Robert Gates recalls: ‘There was a clearfeeling on the part of virtually everybody in thesituation room that the Russians had flat outcommitted an aggression against an independentstate, and were proceeding to dismember it.’29

The Americans even contemplated interveningmilitarily themselves. According to Secretary ofState Rice: ‘There was a little bit of chest beatingaround the table about what we would do andabout how we could signal the Russians militarily,that this would be a foolhardy thing to do.’

National security adviser Stephen Hadley says:‘The issue was, do we put in combat power ornot? What you needed was ground troops if youwere going to save Tbilisi.’30

But that would have risked conflict between theworld’s greatest nuclear powers, and voices suchas that of Robert Gates urged caution: ‘I was prettyadamant that we not give weapons assistance toSaakashvili. My feeling at the time was that theRussians had baited a trap and Saakashvili hadwalked right into it, and so they were both

culpable.’In the end, the Russians stopped and turned

around, and the Americans no longer needed toconsider a military response. They did send navytransport planes to Tbilisi airport, and warshipsthrough the Black Sea to the port of Batumi, todeliver humanitarian aid (and even that infuriatedthe Russians), but the decision was to letdiplomacy work. Despite considerable misgivingsabout the competence of President Sarkozy, theydecided to allow France, which at that point heldthe rotating presidency of the European Union, totake the lead.

Although the Russians maintained at the time thatonly Medvedev was involved in the talks withSarkozy, Putin was there too, predictably playingthe hard man. It was during those talks that hedeclared, ‘I am going to hang Saakashvili by theballs.’ (The Russians denied the report, but Putinhas since himself indirectly confirmed that he diduse the expression.31)

Sarkozy took with him to the talks a draftagreement which Lavrov says, ‘we corrected a

little bit’. In fact the six-point document wasalmost obliterated with amendments, so that, forexample, the first sentence read ‘The Georgian andRussian forces will withdraw fully.’

Sarkozy’s adviser, Jean-David Levitte, recalls:‘They’d completely changed the logic, it was nolonger a ceasefire, it was no longer a retreat oftroops, it was essentially a way of imposing a kindof diktat on Georgia.’

Sarkozy proved to be, in the words of PresidentMedvedev’s adviser, Sergei Prikhodko, ‘tough,very tough’. Eventually he tired of the Russians’negotiating tactics. ‘Listen,’ he said, ‘we’ve beengoing round in circles with this draft. I’m pickingup my pen and writing a new draft. Right, first ofall the conflicting parties agree to the non-use offorce. Agreed – yes or no? Yes.’

There then followed five more points: cessationof hostilities, free access for humanitarian aid,Georgian forces to withdraw to their normal bases,Russian forces to withdraw to their position beforethe outbreak of hostilities, and international talks tobe held on the future status of Abkhazia and South

Ossetia.Point 5 contained an extra clause which would

soon cause trouble. ‘Pending an internationalmechanism’, Russian ‘peacekeepers’ were to putin place ‘additional security measures’. That was afluid prescription, which Moscow would use tojustify maintaining its troops in a wide securityzone, and even in parts of Georgia proper, longafter the peace deal went into force.

Sarkozy flew to Tbilisi with the paper. But itwas to point 6 that Saakashvili refused to sign up,because ‘talks on future status’ seemed to leave thequestion of Georgia’s territorial integrity open.Lavrov said in an interview that the whole point ofhaving the clause about international talks on theregions’ status was to demonstrate that Russia didnot intend to recognise them unilaterally: it wouldbe up to an international conference to decide. ButSaakashvili was adamant, and the point waschanged, after a quick midnight phone-call fromSarkozy to Medvedev in Moscow, to read: ‘talkson security and stability’ in the two regions. Thosetalks have continued off and on, achieving little, in

Geneva ever since.But Saakashvili had already lost the big point.

On 26 August, President Medvedev suddenlyannounced that Russia was recognising theindependence of both South Ossetia and Abkhazia.Two new states were born, which would berecognised by only Venezuela, Nicaragua and thePacific island of Nauru. Even Russia’s formerSoviet allies would not go down that road. Russiahad finally accepted the Kosovo precedent (thoughnot, of course, in relation to Kosovo itself). For allthe world it gave the impression that annexationwould be the next move, and that this had beenRussia’s intent from the outset.

I have yet to meet a Russian who looked veryhappy about the situation. It can be pointed out thatGeorgia’s NATO aspirations have been knockedfor six, or that Russia has allegedly ‘increased itssecurity’, and is now building a new naval base inAbkhazia. But without doubt Russia’s securityinterests would have been better served by havinga peaceful relationship with Georgia.

In the end, the tragedy of Georgia and its war

with Russia may come down to the personaltragedy of one mercurial and deluded man. NinoBurjanadze, formerly a close ally of Saakashvili,says he ‘rushed into war totally convinced hewould defeat the Russian army. The last time Ispoke to him was five days before the war began,and I said to him: “If you start this war it will meanthe end for my country, and I will never forgiveyou.” ’ But another question is why Saakashvili’ssupporters in the West, especially in the UnitedStates, while cautioning him against starting a war,at the same time encouraged his belief that hecould get away with it. Angela Merkel and othersknew about his impetuousness, yet NATOrecklessly insisted on promising his country (andUkraine) membership – even though that madeRussia feel insecure. To this day, no seriousattempt has been made to visualise a future inwhich all the countries of Europe and NorthAmerica might act together to ensure their security,rather than imagining that the security of some canbe built at the expense of the security of others.

The events described in this chapter illustrate

better than any in the past 12 years the failure ofRussia and the West to understand one another andto take one another’s concerns and fears intoaccount. Bush preached and lectured. Putin ragedand menaced. America said that Russia must giveup its ‘sphere of influence’ in its ‘near abroad’.Russia said that America should stop acting as if itruled the world. Bush accused Putin of communist-style authoritarianism. Putin accused Bush of ColdWar thinking. Both were right. The result wasinevitable.

11

RESETTINGRELATIONS WITH

THE WEST

Repercussions of the Caucasuswar

The Russians were livid with the West for sidingwith Georgia over a war that it had started. Theylashed out at everyone in sight, demonstrating afragile grip on reality. The Georgian attack on

Tskhinvali was compared to the 9/11 attack on theUnited States. In the true tradition of Russianconspiracy theory, Vladimir Putin declared that theAmericans had instigated the whole conflict inorder to shore up the position of Senator JohnMcCain, Barack Obama’s Republican rival in theAmerican presidential election.

The foreign minister Sergei Lavrov claimed thatcertain foreign powers decided to use Saakashvili‘to test the strength of Russian authority’ and ‘toforce us to embark on the path of militarisation andabandon modernisation’. The minister insisted theRussians had done nothing more than take outpositions from which the Georgians could attackthem. Speaking to the British foreign secretaryDavid Miliband on his cellphone, Lavrov referredto Mikheil Saakashvili as a ‘fucking lunatic’.

The Russians appeared to be oblivious to thefact that they were in the international doghousehaving invaded and occupied a large part of aneighbouring country. At the end of August,President Medvedev made his first – of several –attempts to draw weighty conclusions from the

war. He enunciated five new ‘principles’ ofRussian foreign policy, some of which hadalarming implications. Principle number fourdeclared that defending the lives and dignity ofRussians, wherever they might be, was thepriority. This included ‘protecting the interests ofour business community abroad’. Anyone whocommitted an aggressive act against them would berebuffed, Medvedev promised. Point five declaredthat there were regions where Russia had‘privileged interests’. This appeared to include allthe neighbouring post-Soviet countries, whereethnic Russians lived. Medvedev pointedly did notuse the expression ‘sphere of influence’ – but thatis essentially what he meant. It implied that formerSoviet republics such as Estonia and Latvia, nowmembers of the EU and NATO but with largeRussian minorities, were officially considered partof Moscow’s domain. The new policy was,perhaps, the precise opposite of what one mighthave expected a chastened Russia to adoptfollowing the Georgia crisis.

Showing no sign of humility, the Russians saw

the war as a pretext to plough on with their old,already rejected initiatives. In October PresidentMedvedev rushed to a conference in Evian,France, and reiterated his call for a new Europeansecurity treaty, saying events in the Caucasus had‘demonstrated how absolutely right’ his idea was,and were ‘proof that the international securitysystem based on unipolarity no longer works’.What was he saying? Had he forgotten that it washis country that had just violated the security andterritorial integrity of a neighbour? His long-winded appeal for a new treaty fell mostly on deafears. This really was, as Saakashvili might haveput it, the fox demanding co-ownership of thechicken-house.

As for Vladimir Putin, his new post as primeminister meant that the economy, rather thanforeign policy, was now his major responsibility.That, too, gave him the levers to meddle in aregion of ‘privileged interest’. The main lever wasGazprom, the huge state monopoly he had refusedto allow his ministers to split up in 2002, whichwas now a handy instrument of foreign policy.

Energy had become a convenient whip with whichto punish neighbours. In 2006, a few months afterthe gas dispute with Ukraine, Russia cut oilsupplies to Lithuania after it sold its Mazeikiairefinery to a Polish company rather than to Rosneft.The same year, power lines to Georgia weremysteriously bombed, and Russia refused to allowGeorgian investigators to see the evidence or helpwith repairs. In 2007 Russia cut oil shipments toEstonia following a row over the removal of aSoviet war memorial.

Towards the end of 2008 another gas conflictwith Ukraine was brewing, as Russia againinsisted on raising its prices to world levels, andUkraine refused to pay. This time, with a Westernpublic relations firm on board, the Kremlin tried topre-empt the bad publicity. They warned Ukraine(and customers farther west) of the impendingconflict, and Gazprom sent its top executives on atour of European capitals to ensure that, if supplieswere interrupted, like three years before, peoplewould know it was Ukraine’s fault, not Russia’s.But no one predicted that Putin would go so far as

to deliberately cut supplies intended not forUkraine but for Western Europe.

Gazprom was owed $2.4 billion by Ukraine forgas already delivered, and wanted to raise theprice for 2009 to $250 (and after a few days to$450) per 1,000 cubic metres – a price Ukrainecould not pay. On 1 January 2009 Gazprom cut gassupplies, just as it had done in 2006. To make upfor the shortfall – again, just as in 2006 – Ukrainebegan siphoning gas from the export pipelines, andsoon customers in Hungary, Austria, Bulgaria,Romania and other countries noticed aconsiderable drop in pressure. But this time therewas no quick resolution, and European countriesbegan to panic. Slovakia even consideredrestarting a mothballed nuclear power station.

On 5 January Putin took an astonishing decision.He called in the head of Gazprom, Alexei Miller,plus television cameras, and used the followingstilted conversation to announce that for the firsttime ever Russia would cut gas supplies tocustomers in Western Europe – mere bystanders tothe dispute with Ukraine – in the middle of a

freezing winter.

Alexei Miller: Ukraine has failed to pay its debt forgas supplied in 2008, and that debt amounts to morethan $600 million. If things continue like this andUkraine continues to steal Russian gas, the debt willsoon amount to billions of dollars.Vladimir Putin: What do you suggest?Alexei Miller: It has been suggested to cut theamount of supplies to the border between Russia andUkraine by exactly the amount Ukraine has stolen,65.3 million cubic metres, and to subtract the amountof gas stolen in the future.Vladimir Putin: Day by day?Alexei Miller: Yes, day by day.Vladimir Putin: But in that case, our WesternEuropean customers will not get the full amount theyhave contracted for.Alexei Miller: Yes, in that case our WesternEuropean partners will not be receiving the amountsof gas stolen by Ukraine, but Gazprom will do all itcan to compensate for that volume in other ways. Wemay increase supplies of Russian gas via Belarus andPoland and increase supplies of Russian gas via theBlue Stream to Turkey.Vladimir Putin: What about consumers inside

Ukraine? They will also be undersupplied. We aretalking about large amounts: as far as I remember,Ukraine consumes 110–125 million cubic metres aday. Ukrainian consumers will suffer. I feel sorry forthe common people.Alexei Miller: According to our reliable information,Ukrainian president Viktor Yushchenko personallyordered a unilateral suspension of talks withGazprom on gas supply to Ukraine this year.Apparently, he does not feel sorry for the commonpeople.Vladimir Putin: He is not sorry, but we are; everyoneshould feel sorry for them, because we are related tothe people who live there.Alexei Miller: We also know that Ukraine producesabout 20 billion cubic metres of gas a year, and theamount of stored gas in Ukraine at present exceedsits annual output. Given the good will of theUkrainian leadership, the people of Ukraine shouldnot suffer.Vladimir Putin: I agree. Start reductions as of today.

Thus it was that Putin, feigning pity for the poorpeople of Ukraine, ‘agreed to a suggestion’ to cutsupplies of gas intended for transit through Ukraineto Central and Western Europe. It was the first

time Russia – or the Soviet Union – had ever cutsupplies to its customers in the West. The actiondestroyed Russia’s fundamental argument, that ithad always been, and would always be, a reliableenergy supplier.

The decision was the last straw for theEuropean Union. The Americans had long beenurging its partners to diversify supplies in order tobreak Moscow’s stranglehold. Now it becameurgent. The EU began exploring every possiblealternative energy supplier – from Algeria to Iranto Turkmenistan. Putin’s decision gave freshimpetus to the so-called Nabucco project, aplanned pipeline that would bring gas to centralEurope from Turkmenistan or Azerbaijan viaTurkey, Bulgaria and Romania – avoiding Russia.

Nabucco was seen as a rival to Russia’s own‘alternative’ route – the South Stream pipeline,which would supply Russian gas via the BlackSea, Bulgaria and Serbia. Plans were already welladvanced, too, for the Nord Stream pipeline underthe Baltic Sea – yet another alternative tosupplying Europe via Ukraine. Russia didn’t quite

get (or pretended not to get) the Western argument,which was that Russia itself could no longer betrusted as a reliable supplier. Russia put the blameentirely on Ukraine as a transit country, andproffered Nord Stream and South Stream as routesfor Russian gas that would avoid potentialdisruption in the future by Ukraine. The EU fearedthat this could leave not only Ukraine but alsoPoland (another transit country) open to blackmailin the future: Russia, faced with a dispute withPoland or Ukraine, would be able to cut gas tothose countries while continuing to supplycountries further west via the new pipelines. Forthe Europeans, Nabucco seemed a safer bet, cuttingRussia out of the equation altogether. But the factremained that potential supplies for Nabucco werescarce (Russia had already bought up Turkmen gasfor years in advance), and in any case Russia, withits enormous energy resources, was fated to remaina major supplier for the foreseeable future. Butafter Putin’s intervention on 5 January 2009 itwould never be fully trusted.

It took until 20 January for Europe’s gas to start

flowing again, following a deal struck in themiddle of the night between Putin and theUkrainian prime minister Yulia Tymoshenko.Ukraine would pay European prices, but with adiscount for 2009, and in return Ukraine left the feeit charged for transit unchanged. Both sides agreedno longer to use the shady intermediary,Rosukrenergo, linked to Tymoshenko’s erstwhilecolleague and now rival, President Yushchenko.

The postscript to this story comes a year later. InFebruary 2010 Viktor Yanukovych, the mansupported in 2004 by Putin but overthrown by theOrange Revolution, was finally elected asUkraine’s president. The Yushchenko presidencyhad proved disastrous, riven by internal rivalries,corruption and inept economic policies. Some sawit as the defeat of the Orange Revolution – but thatwas short-sighted. Yanukovych beat his main rival,Tymoshenko, in a fair election, so democracy itselfwas not an issue. Moreover, Yanukovych in powerproved to be not entirely a Russian poodle. He did,it is true, quickly sign an agreement with PresidentMedvedev to extend Russia’s lease on its Black

Sea Fleet base in the Crimea for up to 30 years. Inexchange he extracted a multi-year discount onUkraine’s contracts for Russian gas deliveries. Butthe price Russia would have to pay for its Crimeanbase was extortionate. Putin commented: ‘Theprice we are now asked to pay is out of this world.I would be willing to eat Yanukovych and theprime minister for that sort of money. No militarybase in the world costs that much. Prices like thatsimply do not exist. If we look at what the contractwould cost us over ten years, it amounts to $40–45billion.’

Later, Yanukovych also began to question againhow much Ukraine was paying for its Russian gas.(The deal signed by Tymoshenko with Putin in2009 was deemed so unfavourable that she wasjailed for abuse of office.) In summer 2011Yanukovych demanded that Russia halve its prices,to less than $200. As for Ukraine’s westwardorientation, although plans to join NATO weredropped, Yanukovych continued to move towardscloser integration with the EU – spurning Putin’sattempts to woo him into a free-trade agreement

with Russia.

The Obama effectIn the summer and autumn of 2008, while Russiawas gazing at its Georgian navel, its leadershipfailed to notice that on the other side of the worldsomething important was happening. George W.Bush, Putin’s nemesis for the past eight years,would soon stand down, and there was everychance that the November presidential electionwould be won by a young, liberal black man whowas enthralling the entire world. Firstly, theRussians did not believe that a black candidatecould possibly beat Senator John McCain. But theyalso refused to believe that if Barack Obama didwin anything would change. I remember sitting in aKremlin office trying to explain to officials that anObama victory looked very likely and that it couldpresent a real opportunity to improve relations.They should start thinking now about how to reachout to him. The reaction was a smirk and a shrug ofthe shoulders: ‘Nothing will change. It’s all the

same people.’Russia really was stuck in a time-warp. It was

not just the West that still treated Russia asessentially a communist country minus a few of thetrimmings. Russia also suffered from a world viewshaped by Cold War-era Pravda cartoons of UncleSam feeding the ‘military-industrial complex’ withone hand and launching missiles at the SovietUnion with the other. For them, Barack Obama wasjust a product of the system, and nothing wouldchange.

On 4 November Obama was elected, to a paradeof delirious headlines almost everywhere.Whatever else was true, Obama was not GeorgeW. Bush, and for many people it seemed like thedawn of a new era. President Medvedev had beenpreparing for his first state-of-the-nation speechfor some weeks – it was first announced for lateOctober, then rescheduled for 5 November. Asnews of Obama’s victory came in, the Kremlin’sPR firm, Ketchum, quickly sent a recommendationthat this was the ideal chance to make an overtureto the new president, with some warm words about

future cooperation. But it was not just Ketchum’sadvice that failed to get through; it was as ifnobody had bothered to pass on the news thatObama had won.

Medvedev spoke for an hour and half in thedazzling white hall of the Great Kremlin Palace,but he did not even mention Obama’s name, farless congratulate him. He did, however, blame USforeign policy for the war in Georgia, and heannounced that Russia might deploy Iskandermissiles in Kaliningrad, bordering Poland, toneutralise Bush’s missile defence system.

The next day’s headlines recorded a missedchance. ‘Russian President Dmitry Medvedevorders missiles deployed in Europe as world hailsObama,’ said the London Times. ‘Russia givesObama brisk warning,’ said the Washington Post.

It has often been pointed out that Russia’sforeign policy is essentially reactive, and this wascertainly largely the case throughout the Putinyears. He made few, if any, initiatives off his ownbat: as we have seen, he expected NATO to‘invite’ Russia to join, he responded to the 9/11

attacks with positive gestures, and to NATOexpansion and missile defence plans with negativeones – but he rarely came out with initiatives of hisown for others to react to. The same was clearlygoing to be the case now: Russia’s foreign policymight change, but only if the Americans made thefirst move.

Obama chose Stanford University professorMichael McFaul as his chief Russia adviser, andthe new team immediately came up with a new,pragmatic philosophy which they called ‘dual-track engagement’. It meant that the administrationwould not link country-to-country relations withRussian behaviour on human rights or democracy.It would continue to challenge the Kremlin robustlyon its human rights record and over its occupationof Georgia, but it would not make diplomatic ormilitary cooperation in other areas (on Iran, forexample, or missile defence) hostage to that. Thetwo would operate on separate tracks. ‘The idea’svery simple,’ McFaul says. ‘We’re going to engagewith the Russian government on issues that are ofmutual interest and we’re going to engage directly

with Russian civil society, including Russianpolitical opposition figures, on things that weconsider are important as well.’1

The first public hint of a new approach came ina speech by Vice-President Joe Biden at theMunich Security Conference in February 2009.This was the same venue where two years earlierPutin had virtually turned his back on the UnitedStates. ‘The last few years have seen a dangerousdrift in relations between Russia and members ofour alliance,’ Biden said. Now, the US wanted to‘press the reset button’. The phrase quicklybecame shorthand for Obama’s new approach toRussia. His secretary of state, Hillary Clinton,tried to turn it into a television image a month laterby presenting her opposite number, Sergei Lavrov,with a large red button marked ‘reset’. The wordwas unfortunately rendered into Russian as‘overload’ or ‘overcharged’ – which at leastensured some smiles as the policy was formallyinaugurated.

Behind the scenes, more important resetting wasgetting under way. A week after Biden’s speech,

Michael McFaul went to Moscow to hand-delivera personal letter from Obama to Medvedev. Theletter was intended to be a kind of bait, laidoutside the cave to tempt the growling bear tocome out. ‘We are taking a careful look at themissile defence programme,’ it said, hinting that itshould become an issue for cooperation, notconfrontation. The letter laid out in big, broadterms a vision of US–Russian relations whichrecognised that, in fact, America’s interests wereby and large also Russia’s interests, and theyshould be looking for ‘win-win’ situations ratherthan the ‘zero-sum’ attitude that had dogged thepast.

The bear sniffed the package and seemed to likeit. Medvedev had his first face-to-face meetingwith Obama in London on 1 April, on the marginsof a G20 summit convened to tackle the globalfinancial crisis. They got through the preliminaries– how nice that we’re both young, both lawyers,both new to the job – and then Obama decided totry out his new ‘win-win’ approach on atroublesome example that had recently arisen. A

few months earlier, President Bakiyev ofKyrgyzstan had suddenly announced he wanted theAmericans to leave the Manas air base, a vitaltransit centre for the Afghan war, having been leanton – and bribed – by the Russians. Bakiyev’sdecision came on the same day as Russia offeredKyrgyzstan a $2 billion loan. Sitting together in theUS ambassador’s Regent’s Park residence, Obamaexplained to Medvedev, a trifle condescendingly,why it was in Russia’s interest to let theAmericans stay at Manas: ‘I need you tounderstand why we have this base here. It supportsour activities in Afghanistan. It’s where our troopsfly in and out of Afghanistan. They take showers.They have hot meals and they get ready to go in tofight in Afghanistan, to deal with enemies of oursthat are also enemies of yours. And if we weren’tfighting these people, you would have to befighting these people. So tell me, PresidentMedvedev, why is that not in your national interest,that we would have this base of operations thathelps what we’re doing in Afghanistan?’Medvedev did not respond immediately. But three

months later the Americans signed a deal thatallowed them to stay at Manas.

Michael McFaul recalls that Medvedev alsomade a surprising gesture at the London meeting,offering to expand the so-called ‘NorthernDistribution Network’ for Afghanistan, to allowthe US to transport lethal cargoes through Russianair space for the first time.

This became a key accord to be announcedduring Obama’s first official visit to Moscow inJuly 2009, together with a framework agreementfor talks to begin on a new disarmament treaty toreplace the old START nuclear arms reductiontreaty, which was due to expire in December. Thetreaty, which would become known as New Start,was to be the centrepiece of the reset. But evenagreeing wording for the framework agreementrequired some diplomatic acrobatics, toaccommodate the two sides’ diametricallyopposed views on whether the treaty should alsoimpose limits on missile defences.

President Obama had promised to ‘review’George W. Bush’s missile defence plans, and in

September he would delight the Russians bycancelling the plans for a radar in the CzechRepublic and interceptors in Poland. But he stillintended to build something in their place, and theAmericans were determined not to include in theNew Start treaty anything that would impede theirdevelopment of a missile shield. The Russianswere equally determined to link the two. Theyinsisted that building defences against offensivenuclear missiles destabilised the general strategicbalance by making the side without the shieldvulnerable to a first strike.

‘We were categorical that we were not going tohave this conversation together,’ says McFaul.‘We could have a separate conversation aboutmissile defence, but here we were going to talkabout reducing offensive strategic weapons. That’swhat the negotiations had to be about. TheRussians wanted to do it all together. We said no.’

Russia’s deputy foreign minister, SergeiRyabkov, recalls: ‘It was clear from the beginning– for us at least and I think for our Americanfriends too – that the subject of missile defence

would become a stumbling block.’2

They agreed a compromise, but it was a messyfudge. Their memorandum of understandingincluded a ‘provision on the interrelationship ofstrategic offensive and strategic defensive arms’.The two presidents interpreted this in quitedifferent ways. At their joint press conference,Medvedev said: ‘We have agreed that offensiveand defensive systems of both countries should beconsidered as a complex.’ Obama said: ‘It isentirely legitimate for our discussions to talk notonly about offensive weapons systems but alsodefensive weapon systems.’ He did not say theyshould be ‘considered as a complex’, indeed heexplicitly pointed out that America’s plannedmissile shield was aimed exclusively at dealingwith a strike from Iran or North Korea and hadnothing to do with Russia’s strategic forces, andadded: ‘And so, in that sense, we have not thoughtthat it is appropriate to link discussions of amissile defence system designed to deal with anentirely different threat unrelated to the kinds ofrobust capabilities that Russia possesses.’ So was

there linkage or not? The fudge allowednegotiations to start ... but on a fatally flawedbasis.

The July summit in Moscow was designed todemonstrate the new ‘dual track’ approach, takingin not just summit talks with the Russian leadershipbut also ‘civil society’ – a speech at anindependent college, the New Economic School,and a meeting with opposition figures, ‘the biggestcritics we could find of the Russian government’,according to McFaul.

The first day was devoted to talks withPresident Medvedev, but Obama was also keen tomeet the man who had shaped Russia for the pastten years. The second morning began withbreakfast on the veranda at Putin’s dacha – asumptuous meal that included three types of caviar(‘at least one of which must have been illegal’,according to one of the Americans). The meetingwas scheduled to last one hour, but went on fortwo and a half. Obama started by asking Putin,‘How did we get into this mess – this low pointthat US–Russian relations have been in for the past

years?’ Luckily Obama is a good listener. Putin’sanswer took up the whole of the first hour.

He delivered a history of the two countries’relations, going back to his hobby horse, theWest’s bombing of Serbia, and enumerating everyslight he had felt in the years that followed: ABM,Iraq, WTO, NATO expansion, missile defence,Kosovo ... Putin’s tale of unrequited love. McFaulfelt that while one could argue over the substance‘the prime minister was actually saying things that Ithink President Obama also agreed with – that ifwe just focus on our interests and talk verypragmatically about where we agree and disagree,we can cooperate’. For Obama, the history lessonwas even rather helpful because it enabled him toemphasise to Putin: well, I’m different, I’m new,and I don’t want the past to haunt the future. Iactually want to reset the relationship with Russia.

The summit achieved its goals – but in asurprisingly unspectacular way. There was none ofthe euphoria (or tension) that used to accompanyEast–West summitry during the Cold War.Obamamania just did not infiltrate Russia. The

student audience for his major public speechlooked rather bored.

Gradually, though, the reset began to bear fruit –including a marked shift in Russia’s stancetowards Iran. Since joining the six-nation Irangroup in 2005, Russia had consistently argued thatwhile it, too, opposed the proliferation of nuclearweapons, it did not believe that Iran was trying tobuild them or could build them in the near future. Itdefended its right to help Iran develop a civilnuclear programme, and was reluctant to supportsanctions. But at their first meeting in London inApril 2009, Obama was astonished whenMedvedev admitted that the Americans had‘probably been more right’ than the Russians whenit came to assessing Iran’s ballistic missile threat.

In September the Americans had a uniquechance to prove they were right about Iran’snuclear ambitions too. The presidents were due tomeet at the United Nations in New York. Justbefore the meeting, Obama’s national securityadviser, General James Jones, called his Russianopposite number, Sergei Prikhodko, and told him

they needed to meet urgently. In a room at theWaldorf Astoria hotel, Jones showed Prikhodkospy photographs of a secret uranium enrichmentplant that the Iranians were building near the holycity of Qom. Prikhodko admitted in an interview:‘This was not the nicest surprise we could havegot.’3 Jones says the Russian was shocked and keptshaking his head, saying, ‘This is bad, really bad...’4

Foreign minister Lavrov couldn’t believe whathe was seeing. He took Michael McFaul aside andsaid: ‘Why didn’t you tell us before, Mike?’

McFaul replied: ‘Well ... we thought you knew.I mean, these are your guys, not ours!’

Obama and Medvedev then met to discuss thenews, and Medvedev’s reaction at a pressconference generated positive headlines inWestern countries, as for the first time he statedthat ‘sanctions rarely lead to productive results,but in some cases the use of sanctions isinevitable’. It was only two days later, when newsof the Qom facility was revealed to the world at aG20 summit in Pittsburgh, that the reason for

Medvedev’s change of attitude could be guessedat. For the first time, Russia and the West nowstarted to work more closely on Iran. Thefollowing June, Moscow would back new UNsanctions, and in September even cancel the sale ofan S-300 air defence system to Iran, losing abillion-dollar contract.

Negotiations on New Start, meanwhile, beganon a permanent basis in Geneva. Two stickingpoints quickly became evident. One was theexchange of what was known as ‘telemetricinformation’ – sharing data about missile tests andlaunches. The second was ‘unique identifiers’ –essentially, bar-coding every missile so they couldall be accounted for and tracked.

Both Obama and Medvedev became deeplyinvolved in the process, hammering out all themost important details in telephone calls and face-to-face meetings. Medvedev joked later that‘telemetry’ had become his favourite Englishword.

One of their meetings took place in December inCopenhagen, where both leaders were attending

climate-change talks. With every venue in the cityapparently taken up with global warmingdiscussions, Obama and Medvedev foundthemselves in a makeshift meeting-room in acurtained-off area of a women’s dress shop,surrounded by naked mannequins. It proved to be aconducive atmosphere. Obama explained theconcept of unique identifiers: ‘Look, we just putthese barcodes on the missiles, so we can countthem. That’s what the treaty’s all about, after all.’

Russia’s negotiators had been resisting this,insisting that ‘if we sign a treaty, we fulfil it’ andthat it should not be assumed they would cheat. ButMedvedev saw the sense of it. ‘OK,’ he said, ‘solong as it’s done in a fair way. That you do it andwe do it, and we do it in a symmetrical way.’

The breakthrough was followed by one ontelemetry, and it seemed agreement was close. InJanuary General Jones called Obama fromMoscow airport after talks that seemed to clinchthe deal.

But there was a hitch. The Americans had beenassuming that the Russians agreed that the strategic

arms treaty would stand alone, with no reference tomissile defence. But now Obama’s replacement forthe Bush missile shield was beginning to takeshape, and the Russians did not like it. Instead of aradar in the Czech Republic and interceptors inPoland, Obama was developing what he called a‘Phased Adaptive Approach’, which in many waysmight pose even more of a potential threat toRussia. It would involve highly mobile sea-basedmissiles and radars, and short-range missilesbased in Eastern Europe. On 4 February 2010 itwas announced that those missiles would belocated in Romania. It seemed to cause a hardeningof attitudes in Moscow, where they realised theywere about to agree a treaty that wouldconsiderably reduce Russia’s strategic arsenal,while the Americans were building a fence right ontheir border.

On 24 February the hot line between theKremlin and the White House glowed red foralmost an hour and a half. Medvedev was againtrying to couple the arms cuts with legally bindingmissile defence restrictions – within the new

treaty. Obama was angry. ‘We’d agreed, Dmitry! Ifthe conditions for the treaty are this, then we’re notgoing to have a treaty.’ Obama was also angry withhis staff, who had led him to believe the deal wasall but done. In fact, his negotiators had done him abad service by letting the Russians think they couldinsert a condition in the treaty that would freezemissile defence systems as they currently stood.

It took three more weeks of intense negotiationin Geneva and Moscow, and another Medvedev–Obama phone call on 13 March, to settle the deal.The New Start treaty was finally signed in Pragueon 8 April. It dealt only with arms reductions, asthe Americans wished, while both sides appendedunilateral statements regarding missile defence.The Americans stated that US missile defencesystems were not intended to affect the strategicbalance with Russia. But the Russian statementinvoked the right to withdraw from the treatyshould it deem a future American build-up ofmissile defence capabilities to be a threat to itsown strategic nuclear potential. The Russiansthereby achieved some kind of linkage, as they had

wanted: if at any point they decide that the USmissile shield has become too strong, they canleave the treaty and build up their own nuclearforces.

iMedvedevSo far, internationally, President Medvedev hadacted in much the same way as one would haveexpected Vladimir Putin to have acted. It did notgo unnoticed that as prime minister, Putincontinued to express his opinions on foreign affairsand even to make trips to other countries. It washe, for example, who publicly stated that missiledefence was in fact an obstacle to the search for astrategic arms agreement – just weeks beforeMedvedev infuriated Obama by repeating the samethought.

Medvedev’s views on defending Russia’sinterests, and being treated as an equal partner,were identical to his mentor’s. Even therapprochement with the West over Iran did notsignify a strategic shift: for a variety of reasons –

commercial, political and strategic – Moscow wasnever going to risk making an enemy of Tehran.

Medvedev, as we shall see in the next chapter,was slowly changing the agenda at home butstruggling to make an impact. The same was true ofhis early foreign overtures. His keynote speechesin Berlin and Evian had flopped. But now that theice was broken with President Obama, he spotted away, perhaps, to boost his image at home andabroad. Since ‘modernisation’ was his watchwordin domestic politics, it made sense for him to beseen hobnobbing with a modern Americanpresident. It wasn’t enough just to own an iPad andrecord video-blogs for his website. He needed toget out West and visit Silicon Valley. He wasnever going to compete with Putin’s Action Manholiday stunts, but he could try to look cool in thecompany of Barack Obama and ArnoldSchwarzenegger. Or would he just look puny? Thatwas the problem.

A couple of months after the Prague treaty wassigned, Medvedev set off on his first state visit tothe United States. He did everything a modernising

president should do. He opened a Twitter account,visited Cisco and Apple and Stanford University,met Russian émigrés working in Silicon Valley,then flew to Washington for talks withcongressmen and an impromptu shirt-sleeves lunchwith Obama at Ray’s Hell Burger joint. Theydiscussed whether jalapenos were better thanpickles, but what Barack did not tell Dmitry overlunch was that the FBI had just uncovered a nest ofRussian spies. That only emerged after Medvedevwas back in Moscow, and a grand spy swap wasexecuted at Vienna airport, in true Cold War style,on 9 July. Ten Russian ‘sleeper’ agents, includingthe glamorous and instantly celebrated AnnaChapman, were exchanged for four Americans whohad been jailed in Russia, accused of espionage.

The incident did more than remind everyone thatespionage is still a thriving business. It alsoinvoluntarily brought to mind the spymaster whowas President Medvedev’s patron and now hisprime minister. Putin welcomed the spies home asheroes – notwithstanding the fact that they had, infact, proved to be almost useless during their many

years as ‘sleepers’, with fake identities and jobs inthe United States. They had failed to penetrate anyworthwhile institution and allowed themselves tobe caught doing the most basic of espionage tricks.But Putin’s loyalty to his profession isunequivocal, and he fell comfortably into his roleas godfather of Russia’s spies. A week or so afterthe agents’ return, Putin organised a morale-boosting meeting with them, where they sangpatriotic Soviet songs and he promised them ‘aninteresting, bright future’ working in ‘worthyplaces’. He also promised retribution for thetraitor who exposed them to the Americans: ‘Thiswas the result of treason, and traitors always endbadly. They finish up as drunks, addicts, on thestreet.’

One of the songs they sang together was ‘WhereDoes the Motherland Begin?’, from a 1968 film,The Sword and the Shield, about a Soviet spyworking in Nazi Germany. Putin also played it onthe piano, with two fingers, at a charity event inDecember. It’s clearly a favourite – sentimentaland patriotic ...

Where does the motherland begin?With the song your mother used to sing,With your comrades good and true,The neighbours always there for you.With the birch-tree in the windy field,The steady sound of wagon-wheels,The never-ending country track,The windows lit in a distant shack ...Where does the motherland start?With the pledge you made in your heart.

12

THE STRONGMANAND HIS FRIENDS

Weathering the global financialcrisis

Vladimir Putin once remarked that he was ‘tired offoreign policy’ and glad to be prime ministerrather than president. But in September 2008, justfour months into the new job, he had to deal withan economic and financial crisis for which he wasill prepared. Eight years earlier he had received

intensive tuition in economics from his team ofbright young reformers. But little in Putin’sexperience prepared him for the tornado that wasabout to hit his country.

Immediately prior to the global financial crash,things were looking good. Buoyed by record-highoil prices, the Russian economy had grown by anaverage of 7 per cent a year between 1999 and2008. The Stabilisation Fund, set up to provide acushion if oil prices should drop, was huge, andhad been split into a Reserve Fund, with $140billion, and a National Welfare Fund, with $30billion, the latter mainly earmarked to solve thelooming pension crisis. Only in February 2008Putin had been boasting that ‘the main thing wehave achieved is stability’. But Russian businesshad borrowed heavily from Western banks, andthose were about to start crashing.

Luckily Putin still had his team of experts, whohad watched America’s subprime crisis gathering,and were only too aware that the tsunami wouldsoon engulf Russia. The day after Lehman Brotherswent bankrupt on 15 September, Putin’s economics

team gathered at the office of his deputy primeminister, Igor Shuvalov. They included PresidentMedvedev’s economic adviser, ArkadyDvorkovich, and the finance minister, AlexeiKudrin, who would later be named ‘FinanceMinister of the Year’ by Euromoney magazine.‘When we realised that everyone in the marketcould go bankrupt overnight, we knew we had todo something,’ he recalls. ‘We came up with aplan to provide a line of credit for 295 businesses.They’d get special rights to credit from banks.’1

Those 295 companies represented 80 per cent ofthe country’s income.

The plan was to offer loans through two state-owned banks, Vneshekonombank and Sberbank.The latter was headed by the architect of Putin’searly reforms, German Gref. He was hesitant: ‘Isaid that I was willing to do this but only with stateguarantees, because I had the money of ourshareholders. I had to answer to them if the riskswere too high.’2

The team came up with a scheme whereby theCentral Bank would guarantee the loans. ‘We spent

two days and nights here in Sberbank,’ Grefrecalls. ‘We sifted through all the papers workingout who owed what to whom. My staff didn’t sleepfor two days.’

In the end the Central Bank spent about $200billion, about a third of its cash reserves, keepingthe economy afloat. Most of this was used torecapitalise banks, buy up plunging shares andsupport the declining rouble. $50 billion wasdisbursed to the 295 key businesses, so that theycould repay hard currency loans from foreignlenders. The beneficiaries included privateoligarchs such as Oleg Deripaska ($4.5 billion)and Roman Abramovich ($1.8 billion), but alsostate companies such as Rosneft ($4.6 billion) andRussian Technologies ($7 billion). At 13 per centof GDP, it was the biggest bail-out package in theG8, dwarfing even the huge US stimulus packageof $787 billion or 5.5 per cent of US GDP.

The strategy worked. Within a couple of yearsalmost all of the loans were repaid, as Russiaswung out of the recession in rather better shapethan some Western countries. GDP fell during the

crisis by 8 per cent, more than any other economyin the G20, but within a year growth had recoveredto plus 5 per cent.

Sergei Guriev, a respected economist withwhom President Obama had a meeting on his firstvisit to Moscow, says the government’s responseto the crisis was ‘resolute and effective’. ‘TheRussian financial system came out of the acutefinancial crisis virtually unscathed, andunemployment remained under control. Thegovernment prevented the collapse of the bankingsystem. Moreover, the crisis did not result in majornationalisations of private companies. Thegovernment could have nationalised all banks andcompanies in financial distress under the banner offighting the crisis, but it did not.’3

Nonetheless, in the year of recession, thousandsof Russian banks and businesses collapsed.Foreign investors began to flee, wiping a trilliondollars off the value of the Russian stock exchange.

Putin himself refused to accept that the crisisrevealed any structural shortcomings in Russia’seconomy. He blamed it all on American

recklessness and saw it as yet more proof of theiniquity of American hegemony. ‘Everything that ishappening in the economic and financial sphere hasstarted in the United States. This is a real crisisthat all of us are facing. And what is really sad isthat we see an inability to take appropriatedecisions. This is no longer irresponsibility on thepart of some individuals, but irresponsibility of thewhole system, which as you know had pretensionsto (global) leadership.’

He went to the Davos World Economic Forumin January to deliver this message, but likeMedvedev’s homily on world security after theinvasion of Georgia, no one was much interested inPutin’s recipes for the world economy. It was,after all, only days since Russia had frozenEuropeans in their homes by cutting their gassupplies.

The crisis hit Russia differently from the moreestablished Western economies. It exposed thedependency of the country on its oil exports, as theprice plummeted from $145 to $35 a barrel. Russiaproduces almost no manufactured goods for export

– neither electronics nor clothes nor machinery –to provide more stable revenues. The crisis alsolaid bare the calamitous state of much of Russia’sindustrial base, inherited from the Soviet plannedeconomy. The Soviets had created industrial zoneson a scale unknown in the West – so-called ‘mono-cities’, where literally everything revolved aroundand depended upon a single enormous engineeringplant. If you didn’t actually work at the factory, orone of its subsidiaries or supply units, you wereemployed by the local government or the schoolsor health system, or in the shops that fed theworkers. If the central plant – be it a car factory oraluminium plant or steel works – stoppedproducing, then the entire network built around itwould also collapse. Soviet planners did notenvisage economic downturns. Now the mono-cities they built, even if they had passed intoprivate hands, were hopelessly vulnerable to thevicissitudes of Wall Street.

One such mono-city was at Pikalyovo, near StPetersburg. It grew up around a cement works,now a complex of three intertwined factories, one

of which was owned by one of Russia’s richestmen, Oleg Deripaska. The economic crisis causedthousands to be laid off with no pay at thebeginning of 2009. When the factory could not payits bills to the local heating and power station,supplies of hot water and heating to the entire townwere cut. The population, facing a huge socialcrisis, took matters into their own hands.Protestors blocked the main highway leading to StPetersburg, causing a 400-kilometre tailback ofvehicles, just as Vladimir Putin was visiting hishome town – inaugurating, of all things, a shinynew Nissan car assembly plant. Now there was afull-blown crisis. At a meeting with the factoryowners and government ministers in Pikalyovo on4 June, Putin read the riot act. He ordered unpaidwages – more than 41 million roubles – to be paidthat day, and lectured the owners: ‘You madethousands of people hostages to your ambition,incompetence and greed. It’s absolutelyunacceptable!’ Suddenly the hallowed precepts ofthe market economy were forgotten as Putinseemed to threaten a state takeover: ‘If the owners

can’t come to an agreement by themselves then nomatter what, this complex will be restarted oneway or another. But if you can’t come to anagreement, then we’ll do it without you.’

In a scene that left television viewersastonished, he then demanded that the owners,whom he likened to cockroaches, sign a pledge toget the factories working again. ‘Did everybodysign this agreement? Yes? Deripaska, have yousigned? I can’t see your signature ... Come here!’The billionaire shuffled up and meekly signed thepaper, only to hear Putin snarl at him: ‘Give meback my pen!’

It was as if Leonid Brezhnev had come back tohaunt Russia – the Communist Party generalsecretary stepping in to whip the local bosses intoorder. But this was 2009, almost two decades afterRussia was supposed to have espoused capitalism.Putin’s solution could only be a quick fix. In thelonger term Russia had to find a way to make eventhe mono-cities respond to the market.

The city of Tolyatti on the Volga, 800 kilometressoutheast of Moscow, is the country’s biggest

mono-city – a conurbation of 700,000 peoplewhere every fourth adult works in the AvtoVAZfactory producing Lada cars. Shortly before therecession, in February 2008, the Frenchmanufacturer Renault bought a 25 per cent stake inAvtoVAZ for $1 billion. But like automobilemakers around the world, the company sufferedbadly during the crisis. Renault failed to streamlineproduction or reduce the bloated workforce. Asmany as 100,000 cars were unsold. Again, theprime minister’s instinct was to put workers’welfare ahead of all else. The factory simply couldnot be allowed to fail: in a city like Tolyatti, thecollapse of the dominant industry would havecatastrophic consequences for hundreds ofthousands of people – and threaten the verystability of the state. On 30 March 2009 Putinvisited the factory and praised its managers for notcausing massive layoffs (in contrast to Pikalyovo)and promised 25 billion roubles ($830 million) ofgovernment aid in the form of loans, cash andguarantees. Sergei Guriev describes the bail-out of‘this behemoth of inefficiency’ as one of the few

mistakes of the crisis.But Putin also engaged in some tough diplomacy

to ensure the company’s longer-term survival. InOctober he issued a public ultimatum to Renault tohelp bail out the plant or see its 25 per cent stakein the company reduced. ‘Either they participate inthe further financing of the company or we willhave to negotiate with them about our relativestakes.’ Then, on 27 November, he made a dash toParis and got what he wanted. Renault promised toprovide new technology for the factory, in returnfor which the government put in an extra 50 billionroubles.

It was a good couple of days in Paris for Putin.As well as the Renault success, he also supervisedthe signing of a deal between Gazprom and theFrench energy giant EDF on the latter’sparticipation in the controversial South Streamproject – the pipeline designed to bring Russiannatural gas to Europe while bypassing ‘unreliable’transit countries such as Ukraine and Belarus –while the other French energy major, GDF-Suez,held talks with Putin about taking a 9 per cent

share in the other bypass pipeline, Nord Stream.Both pipelines were now making good progress:the German government and energy companiessupported Nord Stream, while the Italian ENI wasa partner in South Stream. The EU’s alternative,Nabucco, by contrast, was making slow progress.

Meanwhile, at a private dinner with the Frenchprime minister, Putin discussed something evenmore sensational – the purchase of a French-builtMistral amphibious assault ship, the second-largestvessel in the French fleet, with room forhelicopters, tanks, landing craft and 750commandoes. The sale of two Mistrals wasconfirmed a year later, representing anunprecedented transfer of NATO naval technology– and causing considerable unease among Russia’sEast European neighbours.

The prime minister seemed to relish his job asinternational salesman for Russia. But he sufferedone notable failure – again involving theautomobile industry. In the spring of 2009 he andthe German chancellor, Angela Merkel, togethersupported a bid to rescue Opel, the German

division of the bankrupt American manufacturerGeneral Motors. The deal would see one ofRussia’s state-controlled banks, Sberbank, clubtogether with a Canadian firm, Magna, to buy a 55per cent stake in Opel and save tens of thousandsof jobs, mainly in Germany. Merkel and Putin metregularly to discuss and promote the deal. ForMerkel, facing elections in September, it waspolitically vital, and for Putin it was anotherchance for Russia to get its hands on Westerntechnology: Sberbank’s partner in the deal was theGAZ car factory, owned by Oleg Deripaska, whichstood to gain access to Opel’s latest technologiesand build cars that might finally shed theimpression that Russians could only produceshoddy Ladas.

On 10 September GM agreed to the deal. Putinwas jubilant. ‘I hope that this is one of the stepsthat will lead us to true integration into theEuropean economy,’ he told members of the ValdaiClub at his country residence. Over the next coupleof months the chairman of Sberbank, German Gref,oversaw the final negotiations, flying back and

forth to GM headquarters in Detroit. Theyproduced a 5,000-page contract. ‘Then, oneevening in early November,’ Gref recalls, ‘Ihappened to be in a meeting with Putin, and I wassupposed to fly to Russelsheim that evening to signthe contract the next morning. I came out of themeeting and was given a message that GM haddecided not to sell Opel!’ At first, Gref thought itmust be a joke. ‘The whole deal was worked out.We’d done colossal work, getting agreement withall European governments!’

Eventually the president of GM, FrederickHenderson, called Gref to apologise and explainthat it had been a decision of the board. Gref toldhim it might be better for them not to have aconversation right then, because he might uselanguage he would regret: ‘It was a short call. Iwas so shocked, it took me ages to recover. Wehad worked day and night for half a year on thisdeal – with a huge team of people.’

Putin himself hit the roof. It was not just a hugeblow to his hopes of reviving the Russian carindustry, but also confirmation of American

perfidiousness: ‘We will have to take into accountthis style of dealing with partners in the future,though this scornful approach toward partnersmainly affects the Europeans, not us. GM did notwarn anyone, did not speak to anyone ... despite allthe agreements reached and documents signed.Well, I think it is a good lesson.’

The need to reformThe financial crisis exposed the weakness ofRussia’s semi-reformed economy. You could notrely solely on a hyperactive prime minister to rusharound chivvying owners to sign pledges orforeigners to invest. The economy itself had tobecome more responsive, and more attractive toinvestors. Putin’s team of reformers understoodthis, and so did his president. Medvedev’s adviser,Arkady Dvorkovich, says: ‘We had to askourselves, why was the Russian economy hitharder than any other? And the main conclusion wecame to was that the structure of the Russianeconomy just didn’t match up to modern demands

and was open to far too big risks. Of course, thatwas obvious back in 2000 when we worked outthe reforms under Putin. We achieved some thingsin those eight years, but the structure of theeconomy didn’t change.’4

Constantly rising oil prices had helped to raiseliving standards, but also induced complacencywith regard to economic reform. ‘When oil pricesfell again in 2008,’ says Dvorkovich, ‘we realisedthis was not enough – we had to change direction.Medvedev decided we just couldn’t stay on the oldpath.’

The change in direction was signalled in anarticle entitled ‘Go, Russia!’, published byMedvedev in an online (of course) journal on 10September 2009. It took him just four lines to get tothe point, condemning Russia as ‘a primitiveeconomy based on raw materials and endemiccorruption’. The more cynical Russiancommentators refuse to see even a glimmer ofdifference between Medvedev and Putin, but thefact is that Putin never uttered such words aboutthe economy. The article reminded me a little of

some of Mikhail Gorbachev’s reformist tracts inthe late 1980s: he too would be accused of beingbetter on analysis than solutions, and he too foundthat many of his reforms were either smothered bythe Old Guard or withered in the unyielding groundof the Soviet system.

Medvedev declared that ‘20 years of tumultuouschange has not spared our country from itshumiliating dependence on raw materials. Ourcurrent economy still reflects the major flaw of theSoviet system: it largely ignores individual needs.With a few exceptions domestic business does notinvent or create the necessary things andtechnology that people need.’ Referring, it seemsto his predecessor’s reforms, Medvedev said: ‘Allthis proves that we did not do all we should havedone in previous years. And far from all the thingswere done correctly.’ He promised‘modernisation’ in almost everything: the countrywould hire the best specialists from around theworld; there would be inward investment, moderninformation technologies and even political reform– whereby parliamentary parties would

periodically replace each other in power, ‘as inmost democratic states’.

It read like an election manifesto – the one hemight have published before the election ratherthan a year after, had there been a free election.This was the first of many such liberal-soundingprospectuses Medvedev would deliver during hispresidency, but very few of the ideas found theirway into real life. Analysts argue over why. Is itbecause Medvedev is simply a Putin puppet,dancing his liberal dance to entertain the West,while the puppeteer keeps a tight control ofeverything behind the scenes? Or is it because areal would-be reformer is thwarted at every turnby his master? Or is the task of reforming Russiasimply too great, and the system – the corruption,the sheer enormity of the task – fights back andkills every initiative?

Like Gorbachev, Medvedev’s first visiblemeasures were top–down initiatives designed tobring about what the market achieved, with verylittle help from governments, in the West. In March2010 he chose the town of Skolkovo, in Moscow

region, as the site for what he hoped wouldbecome Russia’s ‘Silicon Valley’. But was it not acontradiction in terms for a government to beestablishing by decree an ‘innovation centre’? Notif the Kremlin ideologue Vladislav Surkov was tobe believed. He advocated what he called‘authoritarian modernisation’ (sic) and saidpolitical liberalisation was not needed foreconomic reform. According to Surkov‘spontaneous modernisation’ only worked inAnglo-Saxon countries, whereas France, Japan andSouth Korea (and by implication, Russia) relied on‘dirigiste methods’.

The following month Medvedev announcedanother ‘reform from above’: Moscow was to beturned into a leading global financial centre. Buthow? It smacked of Medvedev’s earlier attempt to‘establish’ the rouble as an international reservecurrency (this was announced in the same ill-conceived speech at Evian in which he called for anew security treaty in the wake of the Georgiawar). There seemed little understanding of thepsychology of markets, with their unfathomable

mixture of gambling, guesswork, experience andforesight. Alexander Voloshin, former chief of staffto both Yeltsin and Putin, was put in charge of theproject. He is a renowned wheeler-dealer, but thisseemed a task too great even for him. A year laterMedvedev announced that the project was ‘half-complete’. So apparently if such progress keepsup, Moscow will be an international financialcapital by mid-2012.

Medvedev became obsessed with Russia’sinability to become integrated into the worldeconomy. In 2009 foreign capital investment fellby 41 per cent. In February 2010 the president putdeputy prime minister Igor Shuvalov personally incharge of improving Russia’s investment image,with a ‘special structure in the ministry to analyseobstacles that hinder it’. Shuvalov is a clean-cut,crew-cut, smart young politician much admired byWestern businessmen. He personally contributes toRussia’s international links by renting a 400-square-metre apartment in London and a 1,500-square-metre villa in Austria. Shuvalov has ledRussia’s efforts (crucial for integration into the

world economy) to join the World TradeOrganisation – an on-off process hampered both byAmerican obstacles and by Putin’s apparentlylukewarm approach. In June 2009, for example,two days after the US and EU trade representativessuccessfully completed a round of talks withShuvalov that would lead to WTO membership ‘bythe end of the year’, Putin announced out of theblue that Russia would only join together withBelarus and Kazakhstan, as a ‘single customsunion’, even though both countries were milesbehind Russia in their negotiations with the WTO.The announcement appeared to take Medvedev andShuvalov by surprise and put off Russianmembership indefinitely.

When he returned from his eye-opening trip toCalifornia in July 2010, President Medvedevcalled in Russia’s foreign ambassadors for aprivate talk in which he hauled them over the coalsfor their antediluvian approach to their work. (Itreminded me of the foreign ministry official whotold us, when asked to explain why it took so longto organise interviews with deputy ministers, that

‘we still work in the nineteenth century here’.)Medvedev sternly told his diplomats to stopsending him pointless dispatches about worldevents. ‘I can read about them perfectly well on theinternet,’ he said, ‘and a lot sooner than you tell meabout them.’ In future, the foreign service was todevote itself to Medvedev’s Big Idea –modernisation – by advancing Russia’s cause andattracting investment, especially from keycountries, which he named as Germany, France,Italy, the EU in general and the USA. A Kremlinofficial who was present summed up thepresident’s lecture as ‘either change your viewsand your brains, or get out of the diplomaticprofession’.5

But a question remained unanswered – one thathas bothered me over many years since the fall ofcommunism in Russia. Why is it that Russia did not– could not – turn itself into a thrivingmanufacturing country like China or many otherdeveloping economies? It has the brains and skills,an educated but relatively cheap workforce,limitless natural resources, all the space you could

want for the construction of new facilities, amarket desperate for Western goods ... and yetwhen do you ever look at the label on an article ofclothing and read ‘Made in Russia’, or buy acomputer or camera or piece of furniture importedfrom Russia?

There are many explanations. But by far thebiggest obstacle to foreign investment (or thecreation of an international financial centre inRussia) can be summed up in one word –corruption – a word so complex that one leadingRussian businessman told me I would never, as aWesterner, ever, understand it. ‘Theft,’ he said, ‘isnot theft as you know it. It is the entire system – thepolitical system, the business establishment, thepolice, the judiciary, the government, from top tobottom, all intertwined and inseparable.’

Crooks and thievesIn Chapter 3 I described how IKEA became one ofthe first stores to open up outlets in Putin’s Russia.There are now 12 stores around the country, where

millions of Russians love to spend their weekendsbuying affordable and fashionable furniture. IKEAhas done more than any other institution to enhancethe look and comfort of Soviet-built apartments.Yet the Russian machine – local mayors,bureaucrats, judges, police – did everything intheir power to stop it from happening. Not becausethey objected to the Swedish business moving in,but because, being part of the Russian machine,they could not even imagine letting that happenwithout reaping fabulous profits for themselves –and IKEA righteously refused to pay the bribes thatwould have smoothed the way. The company evensacked two senior executives who werediscovered, not even to have paid bribesthemselves, but to have turned a blind eye to acorrupt transaction between one of IKEA’ssubcontractors and a power-supply company. Butits ethical stance caused unimaginable problemsthat might easily have prevented one of the world’smost ubiquitous and successful stores frompenetrating the Russian market.

The tactic most often used by crooked

authorities (and they are almost all crooked) toextort money from businesses is to invent aproblem (lack of some permit, for example), thendemand cash for that ‘problem’ to be ignored.Unless the bribe is paid, the problem remains, andpermission for development is withdrawn – orworse, the police are called in and theentrepreneur ends up in prison for ‘violating’ someregulation or other. The size of the bribe dependson the size of the company – so Russian authoritiesnaturally saw IKEA as a big, friendly, blue-and-yellow cash cow.

IKEA’s Russia manager, Lennart Dahlgren,came to Moscow in 1998 and stayed for eightyears, battling with the authorities to open the firstIKEA stores and ‘Mega malls’. He has sincewritten his memoirs, Despite Absurdity: How IConquered Russia While It Conquered Me,6detailing with remarkable good humour his nearimpossible mission to do business in Russiawithout paying bribes. When the company built itsfirst distribution centre in Solnechnogorsk, outsideMoscow, at a cost of $40 million, the police

suddenly turned up and closed the entire site downbecause they didn’t have all the correct permits.‘To build a big shopping centre like IKEA orMega it is necessary to get more than 300 separatepermits,’ he says. The district mayor demanded 10million, then 30 million roubles (more than $1million) to relaunch construction. Dahlgren agreedto pay the money – not to the mayor but to a charityfund, openly and publicly. It worked.

A year later IKEA tried to open a huge store inthe Moscow suburb of Khimki, but was obstructedbecause the shopping centre operated on reservegenerators and a traffic interchange had not beenbuilt. To overcome this problem IKEA had tobuild two bridges for $4 million and pledge $1million for the development of children’s sports.IKEA’s founder, Ingvar Kamprad, says Russianpower companies cheated the company out of $190million by overcharging it for electricity and gas.He said it only happened because they refused topay bribes.

The World Bank publishes an annual survey inwhich it ranks 183 countries of the world

according to ‘ease of doing business’. In 2011Russia came in at 123 – far behind other post-Soviet states such as Georgia (at 19) andKyrgyzstan (at 44). In terms of ‘dealing withconstruction permits’ Russia sits in 182nd place,ahead only of Eritrea.7

Dahlgren wanted to arrange a meeting forIKEA’s owner – one of the wealthiest people inthe world, and a man with great enthusiasm fordoing business in Russia – with Putin. At first theypalmed him off with meetings with a deputy primeminister. Then Dahlgren had an opportunity todiscuss the proposal with someone from Putin’sentourage, who told him they didn’t think IKEAwould really want to have a meeting with Putin.Dahlgren writes: ‘I don’t know whether they meantit seriously or as a joke, but they said: “IKEA ispenny-pinching, and the going rate for a meetingwith Putin is 5 to 10 million dollars, which youwill never pay.” ’

The New Times magazine has cited governmentsources as saying that an appointment with deputyprime minister Igor Shuvalov, by contrast, costs a

mere $150,000. A member of the public wrote toPresident Medvedev on Twitter that he requested ameeting with first deputy chief of staff, VladislavSurkov, in February 2011 and was asked for$300,000. Medvedev even replied to him: ‘Ishowed your tweet to Surkov. Call his office. Tellhim who is trying to extort money.’

Needless to say, all such suggestions that topofficials grant audiences only in exchange forbribes are officially denied. But there is absolutelyno attempt to hide the scale of the problemgenerally in Russia – nor that it is escalating at aphenomenal rate under the current Russianleadership. At a Kremlin meeting devoted tocorruption on 29 October 2010 Medvedev himselfstated that Russia loses up to $33 billion a yeardue to corruption. Officials in charge of statepurchases rake in so much in kickbacks fromsuppliers that it officially accounts for one-tenth ofall state expenditure. According to the chiefmilitary prosecutor, 20 per cent of the militaryprocurement budget is stolen by corrupt officials.8Overall, according to Medvedev, ‘the level of theft

could be reduced by a trillion roubles, by the mostconservative estimates. That is, we alreadyunderstand that in [the sphere of stateprocurements] gigantic sums are being taken bybureaucrats, and by unscrupulous businessmenworking in this area.’9 An independent report putsthe level of corruption even higher – at $300billion a year, equal to one quarter of GDP.10

The financial crisis made no difference in theworld of Russian corruption: between 2008 and2009 the average size of a bribe in Russia nearlytripled – according to an official interior ministryreport – to more than 23,000 roubles ($776). ByJuly 2010, according to the same official body, theaverage bribe had reached 44,000 roubles($1,500), and by July 2011 the incredible sum of300,000 roubles, or $10,000. The chief of theinterior ministry’s Main Economic SecurityDepartment, Denis Sugrobov, told reporters:‘Officials in charge of purchase and the placementof orders for state and municipal needs areparticularly infected by bribe-taking.’ The head ofTransparency International’s Moscow office added

that $10,000 was the average business bribe, notconnected with ‘mega projects’: ‘It is a bribe thatmedium-level businesses give to officials.’

The strange thing is that while theseinvestigators know the size of the average bribethey do not apparently know who the bribes arepaid to – or at least rarely take action. In terms ofhow much of a deterrent this rampant corruption isto foreign investors, it is enough to considerTransparency International’s corruption index,which ranks the countries of the world accordingto the level of perceived corruption among publicofficials and politicians: since 1996 Russia hasslumped from number 46 in the world, to 82 in2000 when Putin came to power, to 154 in 2010.There are, in other words, only a dozen countriesin the world considered more corrupt than Russia.

There have been a few small successes incombating corruption. At a Kremlin meeting on 10August 2010, the head of the Presidential ControlDirectorate, Konstantin Chuichenko, reported toPresident Medvedev on an audit of medicalequipment purchased by state hospitals. He had

discovered that, among other things, 7.5 billionroubles ($250 million) had been spent on 170 CTscanners – many of them costing ‘two or threetimes’ more than the manufacturer’s prices.Chuichenko opined that public funds were beingused ‘inefficiently’. But Medvedev’s reply wasmore blunt: ‘You know, I think this is not justcorruption but an absolutely cynical and brazentheft of public funds. The people who perpetratethis fraud have absolutely no shame and noconscience.’11 This led to a number ofprosecutions of officials responsible for medicalprocurement, not just at lower levels but even inthe presidential administration itself. Two of them,Vadim Mozhayev and Andrei Voronin, operated anextortion racket: they informed manufacturers ofmedical equipment (for example, Toshiba) thatthey had been placed on a fictitious blacklist,barring them from participating in publicprocurement tenders for their products, and offeredto remove the companies from the blacklist if theypaid $1 million. Toshiba reported the extortionattempt to the police, who investigated, and the

officials were arrested. Voronin was sentenced tothree years in prison.12 In another high-profilecase, the head of the defence ministry’s medicaladministration, Alexander Belevitin, was arrestedon 2 June 2011 for taking a $160,000 bribe from aforeign supplier of a CT scanner.13

Sometimes, though, it seems that US legislation– the Foreign Corrupt Practices Act – is moreeffective in uncovering bribery in Russia thananything the Russians do. In 2010 Diebold, theAmerican ATM manufacturer, complied with theFCPA by dismissing five top managers of itsRussian subsidiary after it discovered they hadgiven kick-backs to officials to get business. TheGerman car-maker Daimler was charged under theFCPA with giving bribes worth more than €3million to secure contracts with Russiangovernment customers for the purchase of vehicles.The cars were bought mainly by the interiorministry, the defence ministry and the ‘specialpurposes garage’ which serves the political elite.Daimler paid the money into offshore accounts.After a long delay, in November 2010, President

Medvedev ordered an investigation into the case.14

Corruption goes hand in hand with the lack of anindependent judiciary. Little has changed despiteMedvedev’s calls for an end to what he termed‘legal nihilism’. The most notorious caseconcerned the young lawyer Sergei Magnitsky,who died in prison in November 2009 after beingarrested by the very officials he had accused offraud. Magnitsky was a lawyer representing a UK-based firm, Hermitage Capital, the largest foreignportfolio investor in Russia. Its founder, BillBrowder, had done much to attract investors toRussia and was a self-professed supporter ofVladimir Putin. He had even applauded the arrestof Mikhail Khodorkovsky as an attempt to clean upRussian business. Part of his strategy was topromote good corporate governance and fightcorruption in the Russian companies in which heinvested, in order to increase their share price andincrease profits. In November 2005, after he hadtried to force a secretive oil company,Surgutneftegaz (which is rumoured to have links toPutin), to disclose its ownership structure, he was

blacklisted as a ‘threat to national security’ andbarred from Russia. Hermitage’s Moscow officeswere raided in June the following year by –Hermitage claims – corrupt law-enforcementofficers who used the tax documents and companyseals they stole to perpetrate a spectacular theftfrom the Russian state budget. Magnitsky’sinvestigations revealed that organised criminalsworking with corrupt officials used the stolendocuments to fraudulently reclaim $230 million oftaxes paid by three Hermitage subsidiaries. WhenMagnitsky officially accused the policemen whohad raided the Hermitage offices of fraud, thosesame policemen at once arrested him and threwhim into Butyrka prison, where he was heldwithout trial for 11 months in squalid conditions.He fell seriously ill, was denied treatment anddied on 16 November 2009. There is no medicalrecord for the last hour of his life, and relativesfound that he had broken fingers and bruises on hisbody. According to a report by PresidentMedvedev’s Council on Human Rights, in his finalhours, when he was in need of immediate medical

care, Magnitsky was handcuffed and taken to asmall room by eight officers, where he was beatenand then left alone for over an hour until he died,while an ambulance team waiting outside wasrefused entry.15

The story is a Kafkaesque nightmare of anindividual destroyed by a ruthless andimpenetrable system, in which the people whoshould have been upholding the law were breakingit, and the alleged criminals were able to persecutethe man who accused them. Hermitage has sincecarried out detailed investigations into the caseand compiled an impressive dossier of evidence.They discovered colossal sums of money inforeign bank accounts belonging to one VladlenStepanov, the husband of Olga Stepanova, who, ashead of Moscow Tax Inspectorate No. 28, hadauthorised the ‘tax refund’ to dummy companies.The Stepanovs’ fortune is estimated at $39 million(one thousand times greater than their declaredjoint income). They have luxury villas on thePersian Gulf and the Adriatic and one in theMoscow region worth $20 million. Not bad for a

mere state tax official. Their alleged accomplicesin the tax office and police also have fabulousfortunes. Hermitage has located assets worth $3million, for example, acquired by the family ofLieutenant Colonel Artyom Kuznetsov (officialsalary $10,200) in the years after he arrestedMagnitsky.16

In Russia, Hermitage’s accusations have goneunexplored. Following the report by his Council onHuman Rights, President Medvedev calledMagnitsky’s death a ‘crime’. Several senior prisonofficers were fired, and two prison doctorseventually charged with negligence. But the reportalso found fundamental flaws in the prosecution ofMagnitsky (including the fact that he wasinvestigated by precisely the people against whomhe had testified), yet those who allegedlycommitted the enormous fraud and then framedMagnitsky have gone unpunished. Indeed some ofthe investigators were rewarded and promoted fortheir services. The tax inspector accused byHermitage, Olga Stepanova, now works atRosoboronpostavka, the procurement agency of the

Ministry of Defence, whose minister, AnatolySerdyukov, happens to be a former head of thefederal tax office.

In July 2011 the US State Department announceda visa ban for Russian state officials it believesare linked to Magnitsky’s death. Rather thaninvestigate the case uncovered by Hermitage,however, the Kremlin announced it would retaliateby blacklisting certain US citizens.

How high does the trail of Russia’s sleaze,which is so blatant at lower and middle levels ofthe state, lead? There are simply no verifiablefacts about corruption at the very top, only awealth of speculation, gossip, accusations andcircumstantial evidence. Putin, it is true, does notmind sporting luxury wristwatches that suggest anincome far in excess of his government salary.Neither does Dmitry Medvedev. Several websitesshow photographs of the men wearing watches thatcost as much as they earn in a year.

The allegedly well-connected commentatorStanislav Belkovsky famously claimed that he had‘evidence’ that Vladimir Putin’s assets amounted

to $40 billion. According to Belkovsky, Putincontrolled 37 per cent of the shares of the oilextraction company, Surgutneftegaz, owned 4.5 percent of Gazprom and held at least 75 per cent of asecretive Swissbased oil-trading company,Gunvor, founded by a friend, GennadyTimchenko.17 There is simply no way of verifyingsuch claims, and Belkovsky is something of a self-publicist. Putin himself described the allegationsas ‘just rubbish, picked out of someone’s nose andsmeared on bits of paper’. A prominent Russianbusinessman, acquainted with both Putin andTimchenko, told me the figures were nonsense andthat Putin does not even need such huge sums ofmoney because, like a mafia boss, he can simplyhave anything he desires. It is not ownership butcontrol, and the network of acquaintances, thatcounts.

It is certainly undeniable that a clique ofbusinessmen close to Putin made immense fortunesduring his presidency.18 It would be surprising ifhis friends did not feel indebted to him.

According to a list of Russia’s richest people

published by Finans magazine in February 2011,Gennady Timchenko, with a personal wealth of$8.9 billion, is in 17th place. His company,Gunvor, has become the world’s third-largest oiltrader, shipping one-third of Russia’s exports,including those of the biggest state companies,Rosneft and Gazprom Neft. Timchenko and Putinhave links that go back to the latter’s days workingin the mayor’s office in St Petersburg. Accordingto the Financial Times, corporate records showthat the two men participated in the early 1990s ina company known as Golden Gates, which wasestablished to build an oil terminal at StPetersburg’s port, but foundered in a clash withorganised crime. Local parliament records showthat a Timchenko company was also ‘a beneficiaryof a large export quota under a scandal-tainted oil-for-food scheme set up by Putin when he workedas head of the city administration’s foreigneconomic relations committee in 1991’.Timchenko is also said to have close ties withSurgutneftegaz, the Kremlin-loyal oil companywhose ownership is undisclosed.19

Arkady and Boris Rotenberg, Putin’s judopartners in his youth, each have assets worth $1.75billion. One of Arkady’s companies was awardedmajor contracts in the preparations for the SochiWinter Olympics in 2014, another is involved inthe construction of the Nord Stream gas pipelineunder the Baltic Sea. Together with GennadyTimchenko, the Rotenberg brothers founded theYavara-Neva judo club, of which Putin is honorarypresident (and whose trustees, incidentally,include first deputy prime minister Viktor Zubkov).

Yuri Kovalchuk, Putin’s neighbour in the Ozerodacha cooperative back in the 1990s, is themajority owner of Bank Rossiya and the NationalMedia Group, and owns assets worth an estimated$970 million. In February 2011 his media group,which already controlled two national televisionchannels, RenTV and Channel Five, bought a 25per cent stake in Russia’s most popular station,Channel One, from Roman Abramovich for just$150 million. According to an opposition report oncorruption, Bank Rossiya’s assets soared from$236 million at the beginning of 2004 to $8.2

billion in October 2010, mainly through itsacquisition, at knock-down prices, of key assets ofGazprom.20

Nikolai Shamalov, another dacha neighbour andco-owner of Bank Rossiya, is worth $590 million.His name surfaced at the end of 2010 in connectionwith sensational rumours that a ‘palace’ wasallegedly being built for Putin in the south ofRussia, at a place called Gelendzhik, near Sochi.Websites printed photographs of a Versailles-stylepalace; aerial photographs showed its position, atthe end of a secluded road close to the Black Seacoast. Shamalov turned out to be the nominalowner of the ‘villa’. However, one of his formerbusiness partners, Sergei Kolesnikov, claimed tohave proof that the palace was in factcommissioned by the Kremlin property departmentin 2005 when Putin was president, and wasintended for his personal use. Novaya gazeta laterprinted what it said was an authenticated copy ofthe original contract for the palace, signed byVladimir Kozhin, the Kremlin’s property manager.When investigative reporters tried to visit it they

were turned away by government security men,even though the site was allegedly Shamalov’spersonal property. The whole story emerged afterKolesnikov wrote an open letter to PresidentMedvedev asking him to investigate his claims. Hesaid he had been personally involved in the projectuntil 2009 when he was removed for raisingconcerns about corruption. He claimed a stateconstruction company was building the palace andthat state funds had been illegally diverted to theproject. The claims were naturally denied by theKremlin and by Putin’s spokesman. In March,apparently to try to put a lid on the scandal,Shamalov sold the palace to another businessman,Alexander Ponomarenko – a partner of ArkadyRotenberg but not closely connected to Putin.

The network of corruption that gobbles up somuch of the country’s wealth touches almost everyRussian’s life – from the driver who bribes atraffic cop, or the small shop owner who passescash to a public health official for a specioushygiene certificate, to the Kremlin bureaucrat whoextorts millions from a foreign trading company.

A Spanish prosecutor, Judge José GrindaGonzalez, who led a long investigation intoRussian organised crime in Spain, resulting in 60arrests, came to the conclusion that it wasimpossible to differentiate between the activitiesof the government and organised crime groups.According to a cable released by the Wikileakswebsite, he told American diplomats that Russiahad become a virtual ‘mafia state’ and that therewere ‘proven ties between the Russian politicalparties, organised crime and arms trafficking’. Hesaid that the authorities used organised crimegroups to carry out operations it could not‘acceptably do as a government’, such as sales ofarms to the Kurds to destabilise Turkey. Anycrimelords who defied the FSB could be‘eliminated’ either by killing them or ‘putting thembehind bars to eliminate them as a competitor forinfluence’.21

Corruption is not just an impediment toinvestment and a destroyer of the economy, it isalso politically explosive. The opposition hassuccessfully branded Vladimir Putin’s United

Russia party as ‘the party of crooks and thieves’ –a slogan now recognised, I am sure, by mostRussians, all the more so since United Russia triedto sue its originator, Alexei Navalny, for slander.

Navalny, in his mid-30s, is a lawyer,businessman and political agitator, who has madeit his mission to scrape away layers of filth fromthe sleazy world of Russian corporate business. Heis the most popular blogger in the Russian internet,and has uncovered corruption of fabulousproportions. Navalny bought shares in state-runcompanies such as Gazprom, Rosneft andTransneft (which runs the government’s oilpipelines), and began investigating their finances.Some of his findings have spawned criminalinvestigations, as well as the ire of the authorities.In one case, he found that Gazprom was buying gasfrom a small company, Novatek, through anintermediary, Transinvestgas, though it could havebought it directly for 70 per cent less. Theintermediary channelled at least $10 million of thedifference to a fraudulent consulting company. Inanother case, VTB, a major state bank, bought 30

oil rigs from China – again at a vastly inflatedprice through an intermediary, which kept thedifference, $150 million. His most sensationalclaim is that Transneft embezzled ‘at least $4billion’ during the construction of a 4,000-kilometre oil pipeline from East Siberia to thePacific Ocean.22

Navalny publishes his findings on a Russianblog site, Live Journal, and has a large followingon Twitter. He recently founded a new website,RosPil.info, ‘to fight against bureaucrats who usethe system of state procurements for their ownenrichment’. The site exploits an early decision byPresident Medvedev to post all state requests fortender online. Navalny asks readers to send in anythat arouse suspicion (‘for example, a 5 millionrouble contract to design a government website,with a one-week deadline for applications’), sothat experts can analyse them and follow them up.Faced with such exposure, dozens of dodgy callsto tender have already been cancelled: the websiteclaimed in August 2011 to have thwarted corruptcontracts worth 7 billion roubles.23 Examples

include a regional governor’s request to buy 30gold-and-diamond wristwatches (‘as gifts tohonour teachers’), an interior ministry order for ahand-carved, gilded bed made of rare wood, andan order from St Petersburg authorities for 2million roubles’ worth of mink for 700 patients ina psychiatric institution.24

13

TANDEMOLOGY

A bicycle built for twoEver since Medvedev became president, and Putinhis prime minister, Russians and foreigners alikehave searched for signs of differences between thetwo halves of what has become known as theruling ‘tandem’. Perhaps it is done more in hopethan expectation, for the dissimilarities are more ofstyle than substance. So elusive is the search that ithas given rise to the modern equivalent ofKremlinology, analysing pictures and parsingsentences in the hope of discerning what is going

on in the dark recesses of the Kremlin (or ofPutin’s and Medvedev’s minds). It might be called‘tandemology’.

The differences between the two men are oftenplayed down because of the lack of real changesince Medvedev became president – but, ofcourse, lack of results does not in itself mean thatchange was not desired. I would argue that whilein foreign policy, as we have seen, there wasscarcely any discernible difference between thetwo men, the evidence suggests that they did havediffering views on the economy and on humanrights – even though actual progress in these areaswas negligible. The differences, moreover, grewmore pronounced in the second half ofMedvedev’s presidency, as a certain rivalry grewbetween them, and both appeared to bemanoeuvring to become the ‘establishment’candidate for president in the 2012 election. Whatis certain is that the two men developed separateconstituencies of supporters, something that wouldnot have happened if their views were identical.They could, in fact, have become the nuclei of

separate political parties, offering alternativesolutions for Russia’s future. The reason this didnot happen is because Putin had a firm grip on thehandlebars, and rarely turned round to hearMedvedev’s protests that they might want to take adifferent path, or get a better bike. The evidencesuggests that Medvedev grew increasinglyfrustrated on the back seat, and was determined tostand for a second term as president. But the twoagreed early on that they would not run againsteach other, and Medvedev knew that if Putindecided to return to the Kremlin, he would do it.This time, the prize was bigger than ever: at theend of 2008 Medvedev had extended thepresidential term from four to six years.

Medvedev’s most symbolic early act of defiancewas to receive the editor of the oppositionnewspaper Novaya gazeta in January 2009, tendays after one of its journalists was shot by acontract killer. To feel the significance of this, youwould have to hear – as I have done – members ofPutin’s team fulminating against the newspaper,which they consider beyond the pale. This is the

paper that used to publish Anna Politkovskaya’sfull-blooded attacks on the Putin system. I haveheard the prime minister’s men use obscenelanguage about it, and they told me Putin feels thesame way. Owned by former Soviet presidentMikhail Gorbachev and the proprietor of theLondon Evening Standard and Independentnewspapers, Alexander Lebedev, Novaya gazetais a small but strident campaigner againstcorruption and authoritarian rule. One of its youngreporters, Anastasia Baburova, was walking downa Moscow street with a human rights lawyer,Stanislav Markelov, when they were both shotdead. Markelov, who defended victims of Russianatrocities in Chechnya and anti-fascist activists,worked closely with the newspaper. He wasthought to have been the gunman’s main target,while Baburova was killed as a witness.

After the shooting – in a move that contrastedvividly with Putin’s brush-off of Politkovskaya’sdeath – President Medvedev called DmitryMuratov, the newspaper’s editor. Muratov recalls:‘He invited Gorbachev and myself to the Kremlin

to discuss the situation. I didn’t expect that. At themeeting he expressed his condolences, and evenmentioned Anastasia’s parents’ names withoutlooking at any notes.’ Muratov says he foundMedvedev totally sincere, and reminded me:‘When Anna Politkovskaya was killed, Putin saidthat her death did more harm to the country than herlife!’ Muratov points out that, in contrast toPolitkovskaya’s killers, the murderers of Baburovaand Markelov – members of a neo-Nazi group –were tracked down and sent to jail for life.1

When Muratov admitted that the murders of fourof his journalists since 2000 had made him wonderwhether to close the paper down, Medvedevreplied: ‘Thank God the newspaper exists.’ Heeven agreed to give his first ever Russian pressinterview as president to Novaya gazeta, Putin’smost hated newspaper, and told Muratov: ‘Youknow why? Because you never sucked up toanybody.’ In the interview, carried out threemonths later, Medvedev openly distanced himselffrom the Putinite idea of a ‘social contract’,whereby the state offered its citizens stability and a

measure of prosperity in exchange for politicaldocility. You could not counterpoise democracyand well-being, he said. He could offer Russiaboth freedom and prosperity.

On the same day as the interview was published,15 April, Medvedev held an extraordinary sessionof the Presidential Council on Human Rights. Themeeting lasted for many hours, but as it beganMedvedev ordered his staff to start publishing theproceedings in instalments on his website – anunprecedented idea that ensured full publicity forhis own words and whatever the human rightsactivists wished to say.

He criticised officials who interfered with theright to demonstrate, or who persecuted NGOs,and admitted that ‘our government machine’ was‘steeped in corruption’. Part of the discussionconcerned the official portrayal of Russian history,at a time when democrats were worried by agrowing tendency to underplay the enormity ofStalinism. One speaker, Irina Yasina, formerlyvice-president of Mikhail Khodorkovsky’s OpenRussia Foundation, was blunt about the communist

legacy: ‘Our country has inherited a terriblelegacy. Throughout the entire twentieth century thevalue of human life was negated, and human rightswere trampled underfoot, to put it mildly. And nowwe, the children and grandchildren of those wholived through that century, must try to change thissituation somehow.’

Medvedev replied: ‘I have to agree with MsYasina that the entire twentieth century was one ofdenial of the value of human life.’

Six months later, in a video-blog posted onRemembrance Day for the Victims of PoliticalRepression, President Medvedev appeared to layinto the authors of new schoolbooks, whichattempted to whitewash Stalin. He said: ‘Let’s justthink about it: millions of people died as a result ofterror and false accusations – millions. They weredeprived of all rights, even the right to a decenthuman burial; for years their names were simplyerased from history. But even today you can stillhear voices claiming that those innumerablevictims were justified for some higher nationalpurpose. I believe that no national progress,

successes or ambitions can develop at the price ofhuman misery and loss. Nothing can takeprecedence over the value of human life. And thereis no excuse for repression.’

Contrast that with Putin, who as presidentreinstated the old Soviet national anthem, calledfor the reintroduction of Soviet-era basic militarytraining in schools and allowed the publication ofa manual for history teachers which describedStalin as an ‘efficient manager’. The book arguedthat one of the reasons for Stalin’s repressions, inwhich millions were incarcerated or murdered,was ‘his goal of ensuring maximum efficiency ofthe management apparatus, while the Great Terrorof the 1930s had achieved ‘the creation of a newmanagement class suited to the tasks ofmodernisation under the conditions of scarceresources’.

It was not just ‘liberal talk’ on Medvedev’spart. He also took small but real steps that gaveheart to the democrats. In January 2009, forexample, he quietly scuttled a draft law backed byPutin, that would have expanded the definition of

treason to include almost any criticism of thegovernment or contact with foreigners, and said hehad been influenced by the outcry in the media andsociety against the proposed change.

He also took measures to defend the right todemonstrate. Since July opposition activists hadbegun holding unauthorised rallies on the last dayof any month with 31 days, to draw attention toArticle 31 of the constitution, which guarantees theright of assembly. The rallies were invariablybroken up within minutes by riot police, andprotestors arrested. The Duma then passed a bill torestrict street protests even further, but inNovember Medvedev vetoed it. Putin’s view ofprotests, by contrast, is that it is normal for policeto ‘beat demonstrators about the head with a batonif they’re in the wrong place’.

In June 2010 a Duma bill broadened thefunctions of the security services to ‘fightextremism’. The law would have allowed the FSBto issue warnings to people it believed were‘about to’ commit a crime, and threaten, fine oreven arrest them for up to 15 days for disobeying

its orders. After his Human Rights Councilcomplained that the bill ‘revived the worstpractices of the totalitarian state’, however,President Medvedev watered it down – andinsisted: ‘I want you to know that this has beendone on my personal orders.’

Putin and Medvedev never, at this stage, openlycontradicted each other. But a battle of ideas wasbeing waged by their proxies. A liberal think-tank,the Institute of Contemporary Development(INSOR), was set up just after Medvedev waselected president, and he became chairman of itsBoard of Trustees. The institute’s chairman, IgorYurgens, says the president agrees with ‘some butnot all’ of his views, but over the few years of itsexistence Medvedev has in fact veered more andmore towards INSOR’s ideas. In February 2010 itpublished a long report titled ‘Russia in the 21stCentury: Vision for the Future’, which suggestedundoing many of Putin’s political reforms. Itenvisaged a Western-style two-party system, amedia free of state interference, independentcourts, directly elected regional governors and a

scaled-back security service. The report was atonce denounced by Putin’s spin doctor, VladislavSurkov, who declared: ‘You can’t createdemocracy in three days, you can’t turn a child intoan adult just like that.’

But in November Medvedev himself turned hisguns on Putin’s much vaunted ‘stability’. He usedwords reminiscent of Gorbachev’s, who brandedthe period of communist government just before hecame to power as years of ‘stagnation’. In a videoblog Medvedev appeared to condemn the de factoone-party rule of Putin’s United Russia party: ‘It isno secret that for some time now signs ofstagnation have begun to appear in our politicallife and stability has threatened to turn intostagnation. And such stagnation is equallydamaging for both the ruling party and oppositionforces. If the opposition has no chance at all ofwinning a fair fight it degrades and becomesmarginal. If the ruling party never loses a singleelection, it is just coasting. Ultimately, it toodegrades, like any living organism which remainsstatic. For these reasons it has become necessary

to raise the degree of political competition.’Despite Medvedev’s apparent encouragement to

the media to take risks, the Kremlin maintained itstotal control of the central television channels. Atthe end of November the popular presenterVladimir Pozner had his closing remarks on hisweekly show censored when he referred to thedeath in prison of Sergei Magnitsky. Anotherrespected television journalist, Leonid Parfyonov,used an award ceremony to launch a stinging attackon how television news was controlled – mostlyby the very people sitting at the tables at theceremony. He said news bulletins had come toresemble Soviet propaganda, with no room forcritical, sceptical or ironic commentary about theprime minister or president. ‘The correspondent is... not a journalist but a bureaucrat, following theservice and logic of obedience,’ he said.

The irony was that Medvedev himself, asrecently as September, had used his control overstate television – resorting to black propagandatechniques straight from the Communist Partyhandbook – to discredit and then oust the corrupt

mayor of Moscow, Yuri Luzhkov. Here, there wasno hint of Medvedev’s democratic inclinations.Since Putin had abolished mayoral elections, therewas no question of getting rid of Luzhkov throughthe ballot box. It had to be done by presidentialdecree – but you couldn’t just do that, with no goodreason, certainly not with a mayor as powerful asLuzhkov. His corruptness was just about as blatantas it could possibly be: everyone knew his wifehad become Russia’s richest woman principally bysecuring the vast majority of Moscow’s mostlucrative building contracts for her own company.But he was part of the Kremlin furniture, in officesince Yeltsin’s days, and still popular; he hadtransformed Moscow into a glittering showcase ofpost-communist revival; and he had Putin’ssupport. But Medvedev wanted rid of him, and thelast straw was Luzhkov’s public criticism of thepresident’s decision to halt construction of acontroversial highway being built through anancient forest north of Moscow. At a meeting withnewspaper editors in St Petersburg, Medvedevadopted Putin-like language when he accused

Luzhkov of ‘rattling his balls’, a quaint Russianexpression meaning to talk nonsense.

Medvedev cranked up the old propagandamachine, and the journalist ‘bureaucrats’ describedby Parfyonov were asked to oblige their masters.All three main television channels aireddocumentaries that blackened Luzhkov’s character.They criticised his policy of ‘reconstructing’Moscow’s architectural heritage by allowingdevelopers to retain only the facades of eighteenth-century buildings, while demolishing everythingwithin. They blamed him for the city’s traffic jamsand described his wife’s fabulous wealth. Andthey derided Luzhkov for spending the scorchingsummer of 2010, when Moscow was engulfed bypoisonous smog from peat fires, on holiday abroador tending to his bee-hives instead of helpingMuscovites survive.

On 17 September Luzhkov was summoned to theKremlin and asked by Medvedev’s chief of staff to‘go quietly’. But he didn’t go quietly. He went onholiday to Austria for a week, and then, on 27September, wrote a letter to Medvedev, in which

he laid into Medvedev’s pretensions to be ademocrat, accusing him of unleashing an‘unprecedented defamation campaign’, designed toget rid of a mayor who was ‘too independent andtoo awkward’. Luzhkov demanded that mayoralelections be reinstated. And he suggested thatMedvedev’s only motive for wanting rid of himwas to move one of his own allies into the mayor’sseat to boost his own chances in a futurepresidential election. ‘You have two options,’Luzhkov wrote: ‘fire me, if you have weightyreasons, or else publicly distance yourself fromthose who have done you this favour [the blackpropaganda campaign].’ The next morning,Medvedev sacked the mayor, citing ‘loss of trust’.

It took another fortnight for a new mayor to beappointed, however – a sign that Putin andMedvedev could not agree on a candidate. Thechoice finally fell on Putin’s right-hand man,Sergei Sobyanin. He was Putin’s chief of staff andowed his entire career to him (and, incidentally,knew little about the capital he was about to run,having lived there for only five years – during

which he had observed the notorious traffic jamsonly through the darkened windows of hisgovernment limousine as it sped down the speciallane reserved for the elite). If Luzhkov was right tosuspect that Medvedev had wanted to install one ofhis own supporters, then this was an importantbattle he had lost to Putin. He was about to losemore.

Since the start of his presidency, Medvedev’sattempt to project a liberal image had beenundermined by the continuing imprisonment of theoil magnate Mikhail Khodorkovsky. His jailsentence was due to end in 2011, but his enemies(Khodorkovsky specifically names deputy primeminister Igor Sechin) were determined to keep himbehind bars for longer. They certainly did not wanthim released just before parliamentary andpresidential elections. And so a second trial waslaunched in February 2009. The fresh case againsthim was implausible. The first trial had alreadyfound him guilty of fraud and tax evasion. Thistime the prosecutors wanted to prove that he andhis co-defendant, Platon Lebedev, had embezzled

the total amount of oil that Yukos produced from1998 to 2003 – oil that prosecutors had previouslyargued Yukos had sold, while failing to pay thecorrect taxes. How could Khodorkovsky have‘stolen’ the oil if it was previously accepted thathe had ‘sold’ it?

His defence appeared to gain a boost when theindustry minister, Viktor Khristenko, and theformer economics minister, German Gref, bothappeared in court as witnesses, and cast doubt onthe charges. If embezzlement had been discovered,I would have been made aware of it,’ said Gref.Khristenko admitted he was unaware of millions ofbarrels of oil having disappeared.

Any hopes Khodorkovsky’s lawyers had wereshort-lived, however. The judge was due todeliver his verdict on 15 December, but reportersturning up at the courthouse that morning found anote pinned to the door announcing, withoutexplanation, that it was postponed until the 27th.Perhaps there was an explanation: the next day, the16th, the prime minister was due to take part in hisannual television phone-in, and he would have

surely faced questions about the trial. That mighthave been awkward – and certainly too late forPutin to influence the verdict. By having the verdictdelayed, he was able to use the phone-in tointerfere quite brazenly in the course of justice.Asked about the case, Putin said, ‘a thief should sitin jail’. It sounded like a direct order to JudgeDanilkin, who was at that moment considering hisoptions. Even President Medvedev took exceptionto such blatant interference. He said in a televisioninterview: ‘No official has the right to expresstheir position on a case before the court announcesits verdict.’ It was the first time Medvedev hadgone further than merely expressing views thatdiffered a little from Putin’s; this was, in effect, apublic reprimand.

It made no difference to the outcome of the showtrial, however. Judge Danilkin foundKhodorkovsky guilty, as the siloviki desired, andsentenced him to 14 years behind bars, to runconcurrently with his first sentence and backdatedto his arrest in 2003. He would not be free until2017.

If 2009 and 2010 saw President Medvedevspeaking a lot about democracy and human rights,and occasionally taking action to support them, hisprime minister’s response became more and morebizarre. It was during this period that VladimirPutin began to find more and more time in his busyschedule for publicity stunts – extravagant displaysof virility that appeared designed to demonstratethat, despite being 13 years older than Medvedev,he was fitter and stronger.

In August 2009 Putin bared his chest and swambutterfly stroke in an icy Siberian river. Kremlincameras clicked furiously as he went fishing andhorse-riding. In 2010 scarcely a month went bywithout a photo-shoot. He put a tracking collar ona polar bear. He rode a Harley Davidson at abikers’ rally. He sprayed wildfires with waterfrom an aeroplane. He fired a dart from acrossbow at a whale in a stormy sea. He drove aFormula One car at 240 kilometres an hour. InOctober the press was full of speculation that hehad gone one step too far to rejuvenate his image.He appeared in Kiev with his face looking puffy

and bruised, and heavily made-up. ‘There are nobruises there,’ said his spokesman. ‘He was justreally tired after several flights and extra meetings.Also, the light may have fallen on him in anunfortunate manner.’ But the press wondered if hehad had a facelift, or botox injections, like hisfriend, the ever youthful Silvio Berlusconi.

Medvedev did not try to match Putin’sstrongman appearances – though he did begin towalk with an exaggerated swagger and to talk withrather aggressive mouth movements, not unlikePutin’s. But for the most part, his props were notfast cars and wild animals but iPads and tweets.

Image was crucial to both men. They wereappealing to different constituencies. By the end of2010, with just a year to go before the comingparliamentary and presidential elections, twothings were becoming crystal clear: that both menwanted to be the next president of Russia, and thatit would be Putin who would decide which of themwould go forward. Ultimately, the tandem wasmore of a penny-farthing.

2011: Paralysis again – thephoney campaign

In a sense the whole of Medvedev’s presidencywas a slow-burning campaign for the next election.But as the final year began, paralysis once againafflicted the president’s Kremlin and the primeminister’s White House – just as it had done priorto the last election. The agreed line was that thetwo men would ‘decide together’ which of themwould be the candidate in 2012, and they wouldannounce their decision when the time was ripe.Officials in both camps began manoeuvring,uncertain of how the dice would fall. At the toplevels, Medvedev’s and Putin’s spokespeopleweighed every word like a raw diamond that couldtip the scales. At lower levels, bureaucratspositioned themselves to jump ship if necessarywhen the situation became clear. At every level,officials were afraid of saying anything that mightbe a hostage to fortune.

Mikhail Dvorkovich (the brother of Arkady, the

president’s economic adviser) wrote in his blog:‘Ministers, not knowing who is their real boss, aretripping up, trying to carry out often contradictoryinstructions. It’s no joke, having to choose betweentwo people, either of whom could becomepresident in 2012. One mistake and in a yearyou’re a “political corpse”.’

At the end of February, Peskov told me to expect‘hysteria’ around the world in a few months’ time.I took it to mean that Putin was going to announcehis intention to run for re-election. But nothing wasmade public and the uncertainty continued.

Both ‘candidates’ began an undeclaredcampaign, starting with a farcical argument overthe choice of mascot for the Sochi WinterOlympics. Putin decided to demonstrate his abilityto influence any decision in the country merely byexpressing an opinion. Just as he had put the judgein the Khodorkovsky trial in an impossibleposition by declaring that ‘a thief should sit injail’, so he casually opined that the snow leopardwould make a fine Olympics mascot – just hoursbefore a nationwide television vote on the matter.

Naturally, the snow leopard was chosen.Medvedev was not happy. Two days later, talkingabout something completely different – the ideathat possible designs for a new universalelectronic ID card should be discussed on theinternet – he added caustically: ‘I hope it will befairer than the discussion of the Olympic symbols.’

There were more serious spats to come. InMarch open disagreement broke out between the‘candidates’ over the world’s response to ColonelGaddafi’s crackdown on dissenters in Libya. Atthe United Nations, Russia abstained on Resolution1973, which authorised the use of air strikesagainst Gaddafi’s forces. Russia’s position was acompromise: Medvedev had wanted to back theWestern stance, his foreign ministry was against it.But Putin was outraged by it, and said so publicly.Visiting a ballistic missile factory in the republicof Udmurtia, he likened the UN resolution to a‘medieval call to crusade’. He said he wasconcerned by the ‘ease with which decisions to useforce are taken in international affairs’. He saw itas a continuation of a tendency in US policy:

‘During the Clinton era they bombed Belgrade,Bush sent forces into Afghanistan and then under aninvented, false pretext they sent forces into Iraq.Now it is Libya’s turn, under the pretext ofprotecting the peaceful population. But in airstrikes it is precisely the civilian population thatgets killed. Where is the logic and theconscience?’

When Medvedev heard Putin’s words – a directcriticism of his own decision to allow the Westernair strikes to go ahead – he hit the roof. Foreignpolicy was his domain, not the prime minister’s.Within a couple of hours he called a handful ofRussian journalists to his dacha, and emerged intothe garden to deliver a stern and lengthy rebuttal ofhis prime minister’s remarks. He looked nervous,swallowing hard and jerking his shoulders, as hecalled Putin’s remarks ‘unacceptable’. Talkingabout ‘crusades’, he said, could lead to a clash ofcivilisations. ‘Let us not forget,’ he went on, ‘whatmotivated the Security Council resolutions in thefirst place. These resolutions were passed inresponse to the Libyan authorities’ actions. This

was why we took these decisions. I think these arebalanced decisions that were very carefullythought through. We gave our support to the firstSecurity Council resolution and abstained on thesecond. We made these decisions consciously withthe aim of preventing an escalation of violence ... Itwould be wrong for us to start flapping about nowand say that we didn’t know what we were doing.This was a conscious decision on our part. Suchwere the instructions I gave to the foreign ministry,and they were carried out.’

For only the second time (after theKhodorkovsky incident), President Medvedev hadput Prime Minister Putin firmly in his place. Itcame as no surprise when, a week or so later,Medvedev’s press secretary, Timakova, madeurgent calls to all the television stations, banningthem from showing footage of Putin drivingMedvedev around in an new experimental car. Thephoney campaign was now in full swing: therewould be no more images of Putin in the drivingseat.

It was a surreal battle: the only people who

really had to be convinced were Putin andMedvedev themselves – it was they who woulddecide which of them would run. (As onecommentator put it, the only election going on wasthe one inside Putin’s head.) But Medvedevdecided to take his pitch to the people, perhapshoping to gather support in the press and putpressure on Putin to allow him to remain aspresident. On 3 March he used a speechcommemorating the 150th anniversary of TsarAlexander II’s emancipation of the serfs in Russiato set out his ideological platform, arguing that‘freedom cannot be postponed’. A few monthslater, not to be outdone, Putin chose his ownhistorical role model – not the ‘Tsar Liberator’ butPyotr Stolypin, the reformist but repressive primeminister of the last tsar, Nicholas II. Stolypincarried out liberal agrarian reforms but had somany dissenters executed that the hangman’s noosebecame known as ‘Stolypin’s necktie’. Putinpraised him in terms he could have used forhimself, and called for a monument to Stolypin tobe erected in front of the government White House.

Medvedev followed up his call for freedomwith his economic pitch. In a speech inMagnitogorsk he listed ten priorities to improvethe investment climate. Sensationally, he demandedthat government ministers who held directorshipsof state companies should give them up. Theyincluded Putin’s closest ally, Igor Sechin, thechairman of Rosneft. Medvedev (who himself usedto be both deputy prime minister and chairman ofGazprom) said it could no longer be the case that‘government leaders who answer for the rules andregulations in a certain industry also sit on theboard of directors of competitive companies’. Thenewspaper Kommersant called the proposal toreplace the state officials with independentdirectors revolutionary: ‘Dmitry Medvedevessentially demanded the liquidation of statecapitalism.’

Arkady Dvorkovich says it was a ‘difficult step’for the government (that is, Putin) to agree to.2Olga Kryshtanovskaya, a sociologist whospecialises in studying the composition of the elite,says the move was part of a trend, however, which

has seen the presence of siloviki in state structuresweakened since Medvedev became president. Attheir height, in 2007, officials from the securityservices and military accounted for 47 per cent ofthe government elite, whereas by the summer of2007 the figure had shrunk to 22 per cent. Thatdoes not mean Putin has forfeited his powers ofpatronage to the new president, however.Kryshtanovskaya says that of 75 ‘key figures’, allbut two remain ‘Putin’s men’.3

Significantly, the country’s biggest state-controlled company, Gazprom – with its web ofpolitical, business and media connections – turnedout to be exempt from the new requirement forgovernment ministers to leave their directorships(just as it survived the reformers’ attempts todemonopolise it a decade earlier). It was revealedat the end of August that first deputy prime ministerViktor Zubkov would remain chairman of Gazprom(though he had given up all his otherdirectorships). Zubkov was Putin’s formerfinancial crime-buster, and also a St Petersburgfriend and trustee of his judo club. Dvorkovich

explained that Gazprom directors had access to agreat deal of ‘secret information’, which made theappointment of independent directors‘complicated’.4 The news seemed to confirmGazprom’s untouchable status at the very hub of thePutin system, used to control the media, to exertpressure on foreign states and to fill the pockets ofa network of cronies.

Putin responded to Medvedev’s ‘manifestospeech’ in Magnitogorsk with his own long speechto the Duma on 20 April, in which he warnedagainst ‘jerks or rash experiments based onliberalism’ in the economy. It was beginning tolook as if Putin no longer entirely trusted hisprotégé to stick to the right path.

For a while in the spring it looked as if Putin –and possibly Medvedev – were casting around foralternative political solutions. An official attemptwas made to boost, and apparently co-opt, a smallcentre-right party called Right Cause, perhaps asan approved liberal ‘opposition’. The first deputyprime minister Igor Shuvalov and the financeminister Alexei Kudrin were initially courted as

potential leaders of the party, but after a week orso of intrigue both turned the offer down. Then oneof the country’s richest men, the oligarch MikhailProkhorov, became leader. But he pledged to turnthe party into a real alternative to United Russia,and began fiercely criticising the Kremlin. Thiswas not at all the ‘loyal’ opposition that wasintended, and at a farcical party conference inSeptember Prokhorov was ousted. He accused theKremlin’s ‘puppeteer’, Vladislav Surkov, of‘privatising the political system’.

Finally, on 6 May, came an announcement soredolent of the Soviet past that it seemed that allpretence at democracy had at last been dropped.Without any public consultation or priordiscussion, Putin announced, during a speech inVolgograd, that he was setting up a neworganisation, the All-Russia People’s Front. At itsheart would be his United Russia Party, but ‘non-party supporters’ – organisations and individuals –were welcome to join. By the very next day thePeople’s Front already had a ‘CoordinationCouncil’, which met at Putin’s dacha to plan its

election campaign. Over the next weeks, thousandsof individuals and organisations were recruited.Whole streets joined, as did factories and offices,youth groups and war veterans, associations ofmusic producers and reindeer herders. Tradeunions signed up – often without even consultingtheir members. Some refused to be corralled in thisway. The Union of Architects later voted tooverturn the decision taken on its behalf.Individual members of the Composers’ Unionprotested loudly, insisting they would not helpPutin to stage ‘sham elections’.5

Ostensibly the People’s Front was formed tohelp United Russia fight the coming Duma electionin December. The party’s poll ratings werecollapsing so dramatically that this might be theonly way to ensure victory. But Putin’s spokesman,Dmitry Peskov, revealed its true purpose. TheFront would ‘operate above the party, it’s notbased on the party,’ he told reporters. ‘It wouldmore likely be based around Putin, who came upwith the idea.’

Putin’s initiative seemed to make a mockery of

Russia’s already emasculated party system. Insteadof having normal political parties, representingdifferent sectors of the political spectrum, Putinnow envisaged United Russia as an amorphousmass organisation, representing all groups. It isworth recalling that the Communist Party of theSoviet Union also did not ‘fight’ elections alonebut as part of ‘the indestructible bloc ofcommunists and non-party people’ – claiming, inother words, to represent everybody.

Here is how Putin introduced his idea in hisspeech to United Russia members in Volgograd:

I have some suggestions. I will explain them now toyou. I want to note that selections to the State Dumacandidate pool must be completed before August. Wethen need to discuss the candidates, so that theelectoral list can be finalised in September at theparty congress. The selection procedure should notonly involve party members, but non-affiliated UnitedRussia supporters, trade union members, members ofwomen’s and youth organisations, publicassociations, citizens who take the initiative, who areactively engaged. In short, all those willing to have adirect influence on government policy through

United Russia in the State Duma.

What am I suggesting and how do I propose we dothis? Essentially, I propose creating what in politicalpractice is called a broad popular front.[Applause]Thank you very much for that reaction, for yoursupport.

This approach to consolidating the efforts of a broadrange of political forces ahead of major politicalevents has been taken in the past and is still practisedin various countries at various points by a variety ofpolitical forces: by those on the left, and by what weknow here as right-wing liberal, nationalist andpatriotic forces.

How it is called is not the issue. The issue is how weconceptualise it and what we want to achieve. This isa tool for bringing together like-minded politicalforces.

And I would very much like United Russia and otherpolitical parties, trade unions, women’sorganisations, youth organisations, for example,veterans’ organisations, including World War II

veterans and Afghan war veterans – everyone who isunited in their common desire to strengthen ourcountry, united by the idea of finding optimalsolutions to the challenges before us – to benefitfrom this single platform, let’s call it, say, the ‘All-Russia Popular Front’, because ahead of May 9 and atStalingrad, this kind of rhetoric is in the air, and thename ‘All-Russian Popular Front’ seems quite apt ...[Applause]Thank you.

I suspect that this was the event that Peskovpredicted to me would cause ‘hysteria’, because itappeared to be so obviously aimed at further side-lining President Medvedev and positioning Putinas ‘national leader’ – head not just of a decliningparty but of a ubiquitous People’s Front. Thecoming Duma elections would be dominated byPeople’s Front posters and Putin’s image.

Medvedev at first reacted coolly – describingthe idea merely as ‘legitimate’ – and then hostilely:a week after the prime minister’s announcement, hetold a group of ‘young parliamentarians’ fromvarious parties: ‘Attempts to tailor the political

system to one specific individual are dangerous ...Excessive concentration of power is definitely adangerous thing that has happened repeatedly inour country ... As a general rule, it led to stagnationor civil war.’

By the summer, Medvedev was beginning tosound defeatist. In an interview with the FinancialTimes he admitted for the first time that he didwant to stand for re-election: ‘I think that anyleader who occupies such a post as president,simply must want to run. Another question iswhether he is going to take that decision forhimself or not. The decision is somewhat differentfrom his desire to run.’6 It was a humiliatingadmission that no president fully in charge of hiscountry would ever make: I want to stand for re-election but it’s not my decision, or not mine alone.

Medvedev still ‘campaigned’. At a huge Putin-like press conference he showed his liberal side:Khodorkovsky, if released from jail, would be‘absolutely no danger to society at all’, he said. Inan interview to mark the third anniversary of thewar against Georgia he showed he was just as

tough as Putin, insisting that he alone took thedecision to invade Georgia. At the St PetersburgEconomic Forum he declared that Putin’s reforms,though necessary, had run their course: ‘Yes, wehad a stage of development that is associated withan increased state role in the economy. It wasimportant to stabilise the situation after the chaosof the 1990s. But now the potential of this path hasbeen exhausted ... Such an economic model isdangerous for the country’s future.’ At a closedmeeting with business leaders he reportedlyappealed to them to support his economic policies,rather than his predecessor’s. And he told leadersof political parties that he wanted to roll backseveral of Putin’s political reforms: lowering thethreshold to enter the Duma from 7 to 5 per cent,‘decentralising’ power, and promising other,unspecified changes.

Some commentators suggested that Medvedevand Putin were in fact still working in tandem: oneout front pushing for reform, the other calling forcaution to stop the process from spinning out ofcontrol.7 But that ignored the one indisputable fact:

that an election was approaching and only one ofthem would be the ruling elite’s candidate. Neitherman was indifferent as to who that candidatewould be.

It seemed that Medvedev was approaching anignominious moment, when he would – in thewords of the veteran Kremlin adviser GlebPavlovsky – ‘tiptoe out of the Kremlin’, confirmingto the entire world that he had only ever been astand-in for Putin. His four years as presidentwould look like a farce, designed to keep theconstitution formally intact while actuallyentrenching Putin’s autocratic rule.

In August, Putin went scuba-diving in the BlackSea, over an ancient archaeological site, andemerged from the water clutching two Grecian urnsthat were conveniently lying on the sea bed, havingescaped the attentions of thousands of other diversover the centuries. There seemed to be no end tohis wizardry. Returning to the presidency wouldsurely be no harder for him.

The announcement at a United Russia congresson 24 September that Putin would indeed run for

president, and that Medvedev could become hisprime minister, was therefore no real surprise –yet still, because of its implications, it came as athudding shock. After all Medvedev’s talk ofpolitical and economic stagnation, and the need forreforms, Russia faced the possibility of another 12years of Putin. The dreams of Medvedev’s ‘Go,Russia!’ article had vanished. The smile stretchedacross Medvedev’s face could not hide hishumiliation. Most cynically, the two men revealedthat all the talk for the past year of ‘taking adecision when the time was right’ was a charade:the job-switch had in fact been discussed yearsago, when Putin handed over to Medvedev.

With television and the electoral processcontrolled by the Kremlin, there was little doubtthat Putin would be re-elected as president inMarch 2012. Russia’s future had been decided bytwo men, behind closed doors.

CONCLUSION

The picture of Russia that has emerged from thesepages is not the one I would have wished to paint,or that I imagined painting 20 years ago, when thecountry emerged from the destruction andhumiliation of communism.1

After a hopeful start, when he wooed the Westand took steps to stimulate the economy, VladimirPutin presided over the smothering of mediafreedoms and democracy, and developed apersonality cult that exploited all the modernmeans of communication. The economy remainsalmost entirely dependent on exports of rawmaterials, with no modern manufacturing base tospeak of. Corruption is by the government’s own

admission overwhelming and growing – the gluethat holds together a mafia-like state, dominated bya clique of Putin’s friends and colleagues, from theKGB, St Petersburg and even his dachacooperative. If Dmitry Medvedev truly wanted toreform all of that, he failed abysmally. Putin’spledge to crack down on the oligarchs applied onlyto those who opposed him politically, while thecountry’s wealth was amassed in the hands offabulously rich tycoons and state bureaucrats. Aland of limitless human and natural resources,freed two decades ago from the grip oftotalitarianism, failed to burst into bloom. Some 40per cent of young people, according to a poll,would rather live somewhere else.2

It is not misplaced, therefore, to ask: why isPutin so popular? In fact, his ratings have beensteadily falling. According to the Levada Centre,only 39 per cent of respondents in August 2011said they would definitely vote for Putin,compared to a high point of 58 per cent three yearsearlier, during the war with Georgia. His‘approval rating’ dropped over the same period

from 83 per cent to 68 per cent. (Approval ofMedvedev fell from 73 to 63 per cent, and only 20per cent said they would ‘definitely’ vote for him.)It is also worth remembering that the atmosphere ofautocratic rule (and the residual fears of a KGBstate) mean that many Russians give answers topollsters (even independent ones) that they thinkthe government wants to hear.

Putin remains, though, the most popularpolitician in Russia, despite his failings andfailures. For part of the answer to this conundrum,read again his favourite song, which I translated atthe end of Chapter 11. It may sound maudlin andcheesy to Westerners, and it might be scorned bythe sophisticated and cynical Russian intellectualswho loathe Putin and everything he stands for. Butyou could go into millions of Russian homes andfind people going watery-eyed over Sovieteraclassics. It doesn’t mean they are all oldcommunists! The chord that Putin strikes amongmillions of Russians is one of nostalgia – forsimpler days, for ‘equality’, for comradeship,unity, the wartime spirit that lasted so much longer

in Russia than anywhere else. These things arereal. Alien perhaps to most Westerners, but real.

The mass of the Russian public is not generallythe same as ‘average’ Westerners. In a televisioncontest in 2008 to find ‘the greatest Russian’,Stalin came in third place – and, it is thought,would have come first if the authorities had notrigged the result to avoid complete embarrassment.

In Chapter 1 I pointed to the mistaken Western(especially American) belief that Russia was just aWestern country waiting to be freed. Putin plays tothat part of the Russian mind that rebels,instinctively, against that. He speaks for those whowant to have a Western economy and enjoy all thebenefits of it, but who want to find their own pathtowards that future, and recoil from some of theWest’s failings. He speaks for those who wantRussia to be respected in the world – and, sadly,for those millions who mistakenly confuse respectwith fear. And he speaks for those who simplylove Russia and savour its uniqueness – those whoinfuriate Westerners like myself who genuinelyendeavour to ‘understand’ it, by smirking at us,

saying: ‘You’ll never understand the Russian soul.’If only Putin had combined his intuition with an

instinct for democracy, and trust in the people’schoice, he would have been a great leader.

But Putin does not really understand democracy.As we have seen, he believes that Americanpresidents can have pesky newscasters removedfrom their jobs. He falls for conspiracy theories(the Georgia war was started to help SenatorMcCain) and believes nonsense served to him byhis intelligence service (America has separatepoultry factories producing substandard chickensto sell to Russia). He has created a system where(he believes) nothing will happen properly if hedoes not personally supervise it: after the outbreakof wildfires in the summer of 2010 he even hadCCTV monitors installed in damaged villages sothat he could monitor the progress ofreconstruction work from his own office.

His style of leadership includes publiclyberating officials on television, sometimes forcingthem to change their policies on the spot, becausethe cameras are whirring. An example:

Vladimir Putin: I want to understand how manyRussian airplanes Aeroflot is going to buy. Otherwisethe situation is that you want to dominate the domesticmarket, but don’t want to buy domestic equipment.That’s no good.Vitaly Savelyev (Director General of Aeroflot): Butwe are buying Russian-built planes ...Vladimir Putin: Not enough of them.Vitaly Savelyev: All right, we will draw up plans. I willreport back.Vladimir Putin: Good.

Putin instituted a tradition (continued byMedvedev) of having the opening of every cabinetmeeting recorded and shown on television news,apparently in the belief that this demonstratesopenness and democracy. In fact, it means thatgovernment sessions turn into shows. Instead of anatural and perhaps difficult discussion in theprivacy of the cabinet room, there is a speech byPutin and, at best, a stilted dialogue with ministers.No Western government televises its cabinetsessions, and no one would expect this to happen,because difficult decisions can only be taken inprivate. Putin has thus taken a superficially

‘democratic’ idea – televising the decision-makers– and turned it into an instrument of dictatorship.

Putin revealed his flawed understanding ofmedia freedom when he visited the studios ofChannel One in February 2011. He toldjournalists: ‘I think representatives of allauthorities and ministries not only can but mustappear on federal television, explaining what goeson in their departments, explaining the processesthat happen there, so that people hear from thehorse’s mouth about the intentions of officials,about their plans.’ At first sight it sounds liberal.But what Russian television lacks is not‘explanation’ of the government’s ‘intentions’ and‘plans’ that have already been made, but free andinformed debate of policies before they becomegovernment plans.

For all the iniquities of the Putin system,however, it is not ‘like the Soviet Union’, as is sooften glibly stated. I was struck by ex-PresidentBill Clinton’s sarcastic comment to Putin after thelatter’s homily about how to reform the capitalisteconomy in Davos in January 2009: ‘I’m glad to

hear Prime Minister Putin come out for freeenterprise. I hope it works for him.’ The BaltimoreSun ran an article in 2011 about the Russians’ loveof fast food restaurants under the headline: ‘We’relovin’ it, comrade.’ Comrade! It’s 20 years sinceRussians were comrades – but it seems they arestill lumbered with the stigma of communism.

You only need to see the queues of excitedfamilies at Moscow airport, heading for holidaysabroad, or visit the Gulag Museum with itsdisplays from Stalin’s camps, or go to a theatreproduction of Solzhenitsyn’s One Day in the Lifeof Ivan Denisovich, or look at Russian websitesand blogs, or simply eat and shop in Moscowtoday, to understand that communism is well andtruly buried.

I am tempted to end by quoting Sir RodricBraithwaite, a former British ambassador to theSoviet Union, whose affection for the country andunderstanding of its people leads him to a rareunderstanding of Russia’s situation. ‘There aremany flaws in the Putin system’, he wrote. ‘But ithas restored Russian self respect, and laid the

ground for future prosperity and reform. As theprocess goes forward, the rest of us are betteremployed in keeping our mouths shut, rather thanoffering advice which is sometimes arrogant andinsulting, and often irrelevant or useless.’3

That is precisely what the Clinton and Bushadministrations failed to do, and, as the eventsdescribed in this book show, the advent of a newCold War was probably due as much to Americaninsensitivity as it was to Putin’s stridency inpursuing his legitimate goal of restoring Russianpride and status. As we have seen throughout thisbook, both sides fall too easily into stereotypedthinking, rooted in an era when two ideologiesfought for world domination. That era is gone:there is no ‘Russian ideology’, and wishing to havea say in world affairs is a far cry from the Sovietambition to spread communism around the globe.Yet the Cold War thinking and frictions remain –on both sides, each winding the other up instead oftrying to understand the other’s fears.

Russians showed during the Gorbachev andYeltsin period that they aspired to democracy and

freedom, but they hated the chaos that accompaniedit. Putin brought greater stability but curtaileddemocracy. Russians have yet to find a leader whocan provide them with both.

NOTES

Chapter 1. The SecretPoliceman’s Ball

1. Strobe Talbott, The Russia Hand (New York:Random House, 2002), p 416.

2. Interview with Konstantin Kosachev, 16December 2009.

3. Talbott, p 397.4. Stephen F. Cohen, Failed Crusade: America

and the Tragedy of Post-Communist Russia(New York: W.W.Norton & Co, 2000), p xii.

5. Interview with Toby Gati, RIA Novosti, 22March 2011.

6. Vladimir Putin, Ot pervogo litsa

(http://archive.kremlin.ru/articles/bookchapter3.shtml– last accessed 7 September 2011).

7. For a good account of this part of Putin’s career,see Peter Baker and Susan Glasser, KremlinRising: Vladimir Putin’s Russia and the End ofRevolution (New York: Lisa Drew, 2005), pp47ff.

8. Ibid., p 53.

Chapter 2. Courting the West

1. Interview with George Robertson, 9 March2011.

2. Interview with Jonathan Powell, 9 March 2011.3. Guardian, 18 April 2000.4. Interview with Mikhail Margelov, 29 April

2010.5. Interview with Condoleezza Rice, 14 April

2011.6. Interview with Stephen Hadley, 24 January

2011.7. Interview with Colin Powell, 3 March 2011.

8. Interview with Igor Ivanov, 11 December 2010.9. Interview with Sergei Ivanov, 29 October 2010.10. Yelena Tregubova, Bayki kremlevskogo

diggera (Moscow: Ad Marginem, 2003), pp160ff.

11. Bob Woodward, Bush at War (New York:Simon & Schuster, 2002), p 119.

12. Interview with Colin Powell, 3 March 2011.13. Interview with Condoleezza Rice, 20 June

2011.14. Bolton interview with Peter Baker and Susan

Glasser, quoted in Kremlin Rising, p 131.15. Interview with Sergei Ivanov, 29 October

2010.16. White House translation, quoted in Woodward,

Bush at War, p 118.17. In 2009 the Russians finally tried to force the

Kyrgyz government to eject the Americans fromManas by offering loans worth $2 billion. Theprice paid by the US to be allowed to stay was aquadrupling in the rent and the renaming of theair base into a less permanent-sounding ‘TransitCentre’.

18. John Bolton, Surrender is not an Option (NewYork: Threshold Editions, 2007), p 71.

19. Interview with Gerhard Schröder, 8 June 2011.20. Interview with George Robertson, 9 March

2011.21. Interview with Sergei Prikhodko, 30 June

2011.22. Interview with George Robertson, 9 March

2011.23. Interview with Colin Powell, 17 May 2011.24. Interview with Stephen Hadley, 24 January

2011.25. Interview with Igor Ivanov, 11 December

2010.26. Interview with Colin Powell, 17 May 2011.27. Interview with Sergei Ivanov, 29 October

2010.28. Interview with Condoleezza Rice, 20 June

2011.

Chapter 3. The Battle forEconomic Reform

1. Interview with Alexei Kudrin, 14 December2010.

2. Interview with German Gref, 7 December 2010.3. Interview with Andrei Illarionov, 27 January

2011.4. Interview with German Gref, 7 December 2010.5. Mikhail Kasyanov, Bez Putina (Moscow:

Novaya gazeta, 2009), p 216.6. Interview with Mikhail Kasyanov, 16 February

2011.7. See Marshall Goldman, Petrostate (New York:

OUP, 2008), chapter 5.8. Interview with Vladimir Milov, 16 February

2011.

Chapter 4. The Darker Side

1. Interview with Viktor Shenderovich, 14December 2010.

2. Komsomolskaya Pravda, 11 February 2000.3. Novaya gazeta, 27 March 2000, reprinted in

Anna Politkovskaya, Nothing but the Truth

(London: Harvill Secker, 2010).4. Mikhail Kasyanov, Bez Putina (Moscow:

Novaya gazeta, 2009), p 217.5. Interview with German Gref, 7 December 2010.6. David E. Hoffman, The Oligarchs (Oxford,

Public Affairs Ltd, 2002), p 449.7. John Browne, Beyond Business (London:

Weidenfeld & Nicolson, 2010), p 145.8. Interview with German Gref, 7 December 2010.9. Martin Sixsmith, Putin’s Oil (London:

Continuum, 2010), p 52.10. Interview with Mikhail Kasyanov, 16 February

2011.11. My account of this meeting is based on

interviews with those present, on (edited) videoof the event and on the versions given bySixsmith, Putin’s Oil, and Andrei Kolesnikov inKommersant, 20 February 2003.

12. Interview with Leonid Nevzlin, 14 May 2011.13. Interview with Andrei Illarionov, 27 January

2011.14. Interview with Mikhail Kasyanov, 16 February

2011.

15. Kasyanov, Bez Putina, pp 199ff.16. Quoted in Sixsmith, Putin’s Oil, p 153.17. Observer, 2 November 2003.

Chapter 5. New Europe, OldEurope

1. Interview with George Robertson, 9 March2011.

2. Interview with Jonathan Powell, 9 March 2011.3. Interview with Dan Fried, 27 January 2011.4. Interview with Nicholas Burns, 15 July 2010.5. Interview with Nicholas Burns, 21 January

2011.6. Interview with Maurice Gourdault-Montagne,

20 June 2011.7. Die Zeit, 5 April 2001.8. Interview with Gerhard Schröder, 8 June 2011.9. Interview with Alexander Kwaśniewski, 24

November 2010.10. Interview with Igor Ivanov, 11 December

2010.

11. Interview with Nicholas Burns, 21 January2011.

12. Interview with Sergei Ivanov, 29 October2010.

13. Interview with Maurice Gourdault-Montagne,20 June 2011.

14. Interview with Condoleezza Rice, 14 April2011.

Chapter 6. Putin Mark II

1. Interview with Igor Ivanov, 11 December 2010.2. Interview with Nino Burjanadze, 29 March

2011.3. Interview with Mikheil Saakashvili, 9 May

2005.4. See Thomas de Waal, The Caucasus: An

Introduction (Oxford: Oxford University Press,2010), pp 194–5.

5. Interview with Colin Powell, 3 March 2011.6. de Waal, The Caucasus, p 197.7. Interview with Mikheil Saakashvili, 31 March

2011.8. Wall Street Journal, 30 August 2008, Daily

Telegraph, 23 August 2008.9. de Waal, The Caucasus, p 199.10. Interview with Eduard Kokoity, 4 April 2011.11. The cause of the fire, which left only the outer

walls intact, has never been fully established.The destruction of the historic building (erectedafter the Napoleonic fire of 1812) provided anexcuse for its total reconstruction, which wascriticised by conservationists for distorting theoriginal architectural vision.

12. Komsomolskaya Pravda, 28 September 2004.13. Surkov on Chechen television, 8 July 2011,

quoted by Interfax and Reuters.14. Dmitry Trenin, ‘Moscow the Muscular’: The

Loneliness of an Aspiring Power Center(Moscow: Carnegie Moscow Center Briefing,volume 11, issue 1, January 2009).

Chapter 7. Enemies Everywhere

1. Interview with Leonid Kuchma, 22 March 2011.2. Interview with John E. Herbst, 16 May 2011.3. Interview with Gleb Pavlovsky, 18 February

2011.4. Interview with Sergei Markov, 30 June 2011.5. Interview with Oleh Rybachuk, 28 November

2010.6. Interview with Viktor Yushchenko, 29

November 2010.7. Interview with Alexander Kwaśniewski, 24

November 2010.8. Interview with Leonid Kuchma, 22 March 2011.9. Interview with Alexander Kwaśniewski, 24

November 2010.10. Washington Post, 9 February 2010.11. Gleb Pavlovsky, Nezavisimaya gazeta, 7

December 2004.12. Nezavisimaya gazeta, 7 December 2004.13. Interview with Tony Brenton, 5 April 2011.14. ICNL (The International Journal of Not-for-

Profit Law), volume 9, issue 1, December 2006.15. Interview with Lyudmila Alexeyeva, 23

February 2011.16. Interview with Jonathan Powell, 9 March

2011.17. Interview with Mikhail Kasyanov, 16 February

2011.18. Interview with Viktor Yushchenko, 29

November 2010.19. Interview with Damon Wilson, 2 March 2011.20. Interview with Oleh Rybachuk, 28 November

2010.21. Interview with John E. Herbst, 16 May 2011.

Chapter 8. A New Cold War

1. Interview with Stephen Hadley, 24 January2011.

2. Rather was at the centre of a controversy afterpublicising documents critical of PresidentBush’s military service during the 2004presidential campaign. The documents’authenticity was later disputed, and inNovember Rather announced he would retire the

following March, but there was never anysuggestion that Bush had put pressure on CBS tofire him.

3. Interview with Damon Wilson, 2 March 2011.4. Interviews with Nicholas Burns, 21 January

2011, and Condoleezza Rice, 20 June 2011.5. Wikileaks cable in the Guardian, 1 December

2010.6. Interview with Oleg Mitvol, 14 April 2010.7. These events are reconstructed from interviews

with Condoleezza Rice, Bill Burns, SergeiIvanov, Igor Ivanov, Sergei Lavrov and others.

8. Some of Litvinenko’s colleagues later ‘returned’to the FSB fold and accused him of havingtricked them into making this appearance. For anexcellent account of all the conspiracy theoriesand intrigues surrounding the case, see MartinSixsmith, The Litvinenko File (London:Macmillan, 2007).

9. Yelena Tregubova,http://viperson.ru/wind.php?ID=413357&soch=1 (last accessed 7 September2011).

10. Interview with David Miliband, 7 July 2011.11. Interview with Sergei Lavrov, 25 October

2010.12. Sixsmith, The Litvinenko File, pp 303ff.

Chapter 9. Media, Missiles,Medvedev

1. Dmitry Peskov, interviewed on Dozhdtelevision, 4 October 2011.

2. US companies are obliged to declare feesreceived from foreign principals for ‘politicalactivities’. For the period January to June 2008,the fee declared by Ketchum and its partner TheWashington Group for work done in NorthAmerica and Japan on behalf of the RussianFederation was $2,436,600. GPlus received asimilar sum for its work in Europe, making atotal of almost $5 million for that six-monthperiod. The initial contract for the G8 year hasbeen rolled over year by year, with the fees foreach new contract varying somewhat.

3. Dmitry Peskov, interviewed on Dozhdtelevision, 4 October 2011.

4. See, for example, The New Times, 16 March2009.

5. See Luke Harding, Mafia State (London:Guardian Books, 2011).

6. Lilia Shevtsova, Lonely Power (Moscow:Carnegie Endowment, 2010), pp 98ff.

7. Interviews with Dan Fata, 1 March 2011, andEric Edelman, 4 March 2011.

8. Dmitri Trenin, ‘Moscow the Muscular’: TheLoneliness of an Aspiring Power Center(Moscow: Carnegie Moscow Center Briefing,volume 11, issue 1, January 2009).

9. Interview with Sergei Prikhodko, 30 June 2011.10. Off-the-record interview with senior Russian

official.11. Interview with Condoleezza Rice, 30 June

2011.12. Interview with Stephen Hadley, 24 January

2011.13. Interview with Eric Edelman, 4 March 2011.14. Interview with Robert Gates, 16 May 2011.

15. Interview with Sergei Lavrov, 25 October2010.

16. Interview with Anatoly Antonov, 2 April 2011.17. Boris Nemtsov and Vladimir Milov, Putin:

Itogi (Moscow: Novaya gazeta, 2008).18. Michael McFaul and Kathryn Stoner-Weiss,

‘The Myth of the Authoritarian Model’, ForeignAffairs, volume 87, number 1, January/February2008.

Chapter 10. The Descent intoWar

1. Interview with Damon Wilson, 2 March 2011.2. Interview with Mikheil Saakashvili, 31 March

2011.3. Interview with Jean-David Levitte, 12 March

2011.4. Interview with Robert Gates, 16 May 2011.5. Interview with Stephen Hadley, 24 January

2011.6. Interview with Radoslaw Sikorski, 25

November 2010.7. Interview with Condoleezza Rice, 20 June 2011.8. Interview with Frank-Walter Steinmeier, 20

June 2011.9. Angus Roxburgh, ‘Georgia Fights for

Nationhood’, National Geographic, volume181, number 5, May 1992.

10. Quoted in Thomas de Waal, The Caucasus: AnIntroduction (New York: Oxford UniversityPress, 2010), p 208.

11. Interview with Damon Wilson, 2 March 2011.12.

http://www.rferl.org/content/Did_Russia_Plan_Its_War_In_Georgia__/1191460.html (last accessed 7 September2011).

13. Interview with Giorgi Bokeria, 30 March2011.

14. Interview with Batu Kutelia, 29 March 2011.15. Interview with Nino Burjanadze, 29 March

2011.16. Interview with Mikheil Saakashvili, 31 March

2011.17. Interview with Sergei Prikhodko, 30 June

2011.18. I do not regard Saakashvili as a particularly

reliable witness. His interview for the TV seriescontained at least two ‘memories’ that areverifiably false. He has a clear tendency toembellish stories to his own advantage.

19. Interview on Ekho Moskvy, published 7 August2011.

20. Medvedev interview with Russia Today, PIK-TV and Ekho Moskvy, published 5 August 2011.

21. Interview with Condoleezza Rice, 20 June2011.

22. Interview with Radoslaw Sikorski, 25November 2010.

23. I accept that this is an oversimplification. Theethnic balance of Abkhazia changed hugely overthe decades: the Abkhaz were once the majorityethnic group, and huge numbers of Georgiansand Russians were brought into the regionduring the Soviet period – a deliberate Georgianpolicy, the Abkhaz say, to turn them into aminority.

24. Interview with Jean-David Levitte, 12 March

2011.25. Medvedev interview with Russia Today, etc, 5

August 2011.26. Interview with Condoleezza Rice, 14 April

2011.27. Interview with Sergei Lavrov, 25 October

2010.28. Interview with Mikheil Saakashvili, 31 March

2011.29. Interview with Robert Gates, 16 May 2011.30. Interview with Stephen Hadley, 24 January

2011.31. In a live television phone-in programme on 4

December 2008 Putin was asked by a viewer,‘Is it true that you promised to hang Saakashviliby “one place”?’ Putin paused for a moment,smiled, and replied: ‘Why by “one”?’

Chapter 11. Resetting Relationswith the West

1. Interview with Michael McFaul, 15 April 2011.

2. Interview with Sergei Ryabkov, 27 October2010.

3. Interview with Sergei Prikhodko, 30 June 2011.4. Interview with James Jones, 4 March 2011.

Chapter 12. The Strongman andHis Friends

1. Interview with Alexei Kudrin, 14 December2010.

2. Interview with German Gref, 7 December 2010.3. Sergei Guriev and Aleh Tsyvinski, ‘Challenges

Facing the Russian Economy after the Crisis’, inSergei Guriev, Anders Aslund and AndrewKuchins (eds), Russia After the GlobalEconomic Crisis (The Peterson Institute forInternational Economics, 2010), p 21.

4. Interview with Arkady Dvorkovich, 29 June2011.

5. Kommersant, No. 124, 13 July 2010.6. Currently available only in Russian and

Swedish.

7. http://www.doingbusiness.org/rankings (lastaccessed 7 September 2011). The top tencountries for ease of doing business are, inorder: Singapore, Hong Kong, New Zealand,UK, USA, Denmark, Canada, Norway, Ireland,Australia.

8.http://www.gazeta.ru/politics/2011/05/24_a_3627341.shtml(last accessed 7 September 2011).

9. http://news.kremlin.ru/transcripts/9368 (lastaccessed 7 September 2011).

10. Report by INDEM foundation, quoted in V.Milov, B. Nemtsov, V. Ryzhkov and O. Shorina(eds), Putin. Korruptsiya. Nezavisimyyekspertnyy doklad (Moscow, 2011).

11. http:// eng.kremlin.ru/news/752 (last accessed7 September 2011).

12.http://www.vedomosti.ru/politics/news/1247042/skandal_s_zakupkami_tomografov(last accessed 7 September 2011).

13. http:// ria.ru/trend/belevitin_case_02062011/(last accessed 7 September 2011).

14. Financial Times, 12 November 2010.

15.http://en.rian.ru/russia/20110706/165063309.html(last accessed 8 September 2011).

16. See http://russian-untouchables.com/eng/ (lastaccessed 7 September 2011).

17. Guardian, 21 December 2007. In a differentinterview, with Die Welt, Belkovsky put Putin’sstake in Gunvor at 50 rather than 7 per cent.

18. Putin’s own website reprints an article fromthe opposition newspaper Novaya gazeta aboutthe prime minister’s network of business friendsand interests:http://premier.gov.ru/pda/eng/premier/press/ru/4558/(last accessed 7 September 2011).

19. Financial Times, 15 May 2008.20. Milov, Nemtsov, Ryzhkov and Shorina (eds),

Putin. Korruptsiya. Nezavisimyy ekspertnyydoklad.

21. Guardian, 1 December 2010.22. http:// navalny.livejournal.com/526563.html.23. http:// rospil.info/results.24. See Julia Joffe’s excellent account of

Navalny’s work in The New Yorker, 4 April

2011.

Chapter 13. Tandemology

1. Interview with Dimitry Muratov, 14 December2010.

2. Interview with Arkady Dvorkovich, 29 June2011.

3. Interview with Olga Kryshtanovskaya inSvobodnaya pressa, 8 February 2011,svpressa.ru/politic/article/38451 (last accessed7 September 2011).

4.http://www.bfm.ru/news/2011/08/29/dvorkovich-zubkov-ne-ujdet-iz-gazproma-do-1-oktjabrja.html(last accessed 7 September 2011).

5. Guardian, 1 July 2011.6. Financial Times, 20 June 2011.7.

http://www.rferl.org/content/medvedev_talks_reform_in_st_petersburg/24238558.html(last accessed 7 September 2011).

Conclusion

1. I notice that my book about the Gorbachev yearsended very hopefully. See Angus Roxburgh, TheSecond Russian Revolution (London: BBCBooks, 1991).

2. Sunday Times, 14 August 2011.3. http://valdaiclub.com/history/29960.html – 18

August 2011 (last accessed 7 September 2011).

ENDNOTES

1. The magistrate who rejected the extraditionrequest for Berezovsky (and also for an exiledChechen leader, Akhmed Zakayev, who was alsowanted by Moscow) was Judge TimothyWorkman. A few months later, in January 2004, an83-year-old man with the same surname, RobertWorkman, was shot dead when he opened his frontdoor to a stranger in a quiet village north ofLondon. No motive for the murder has beenestablished and the killer has not been found.There was speculation that the murder could havebeen a case of mistaken identity.

2. The word silovik is often translated as‘strongman’, but it really means ‘a member of the

security forces’. It derives from the term silovyestruktury, or ‘power structures’, in other wordsthe FSB, ministry of defence, police, and so on. Ineffect the siloviki are men (I can’t think of anyfemale siloviki) who derive their power fromhaving worked in one of these structures.

LIST OFILLUSTRATIONS

1. President Yeltsin hands Vladimir Putin the sealsof office, 31 December 1999. (www.kremlin.ru)

2. President Putin’s inauguration speech, 7 May2000. (www.kremlin.ru)

3. Putin’s St Petersburg friend Alexei Kudrinbecame Russia’s most successful financeminister. (www.kremlin.ru)

4. Putin with his early team of reformers, GermanGref, Alexei Kudrin and Andrei Illarionov.(Courtesy of RIA Novosti)

5. President George W. Bush with Putin in 2001,when Bush looked into Putin’s eyes and saw his

soul. (www.kremlin.ru)6. Bush and Putin became good friends despite

serious policy clashes. (www.kremlin.ru)7. US Secretary of State Condoleezza Rice and

Russian defence minister Sergei Ivanov came totrust one another after 9/11. (www.kremlin.ru)

8. Tony and Cherie Blair with the Putins at theMariinsky Theatre, St Petersburg, March 2000.(www.kremlin.ru)

9. Putin with one of his closest Western allies,Italian leader Silvio Berlusconi.(www.kremlin.ru)

10. Putin got on less well with German chancellorAngela Merkel, whom he tried to scare with hisdog. (www.kremlin.ru)

Victims of the Putin regime?11. Oil tycoon Mikhail Khodorkovsky. (Photo by

Oleg Nikishin/Getty Images)12. Journalist Anna Politkovskaya. (Photo by

Schreibstube)13. Ex-KGB agent Alexander Litvinenko. (Photo

by Natasja Weitsz/Getty Images)

14. Putin’s placeman in Chechnya, RamzanKadyrov. (Photo by RuslanAlkhanov/AFP/Getty Images)

15. All smiles at Putin’s first meeting in 2004 withthe Western-oriented Georgian leader MikheilSaakashvili. Saakashvili later mocked theRussian as ‘Liliputin’. (www.kremlin.ru)

16. Viktor Yushchenko and Yulia Tymoshenko,leaders of Ukraine’s Orange Revolution.(Courtesy of European Peoples Party)

17. Putin’s patriots. The Russian leader holdsregular meetings with his young supporters inNashi. (www.kremlin.ru)

18. Putin’s portraits for sale in a stationery store.(Vladimir Menkov)

19. Putin as a child dreamt of joining the KGB.(www.kremlin.ru)

20. After university he fulfilled his dream.(www.kremlin.ru)

21. Putin with his wife Lyudmila on a rare publicappearance together. (www.kremlin.ru)

22. Putin’s appearances with his dog Koni are

more frequent. (www.kremlin.ru)23. Putin the judoist. (www.kremlin.ru)24. Putin discovers two Grecian urns in the Black

Sea in the summer of 2011. His spokesman lateradmitted they were planted for him. (Courtesy ofRIA Novosti)

25. Doing the butterfly stroke in an icy Siberianriver. (Courtesy of RIA Novosti)

26. Putin at the controls of a jetplane.(www.kremlin.ru)

27. Putin and Dmitry Medvedev celebrate thelatter’s election as president in May 2008. Thecrowd on Red Square chanted only Putin’sname. (www.kremlin.ru)

28. During the 2009 financial crisis, Putin forcesbillionaire Oleg Deripaska to sign a paperpromising to get the one-factory town ofPikalyovo working again. (Courtesy of RIANovosti)

29. July 2009: President Barack Obama explainshis plans for a US–Russian ‘reset’ at Putin’sdacha. (www.kremlin.ru)

30. June 2010: President Medvedev heads off with

Barack Obama for a hamburger lunch.(www.kremlin.ru)

31. Foreign minister Sergei Lavrov and Secretaryof State Hillary Clinton press a toy ‘resetbutton’. (www.kremlin.ru)

32. The modernising Medvedev is rarely seenwithout his iPad. (Courtesy of RIA Novosti)

33. Dmitry Medvedev became president in 2008knowing he would probably hand back to Putinfour years later. (www.kremlin.ru)

34. In September they told a congress of the UnitedRussia party that they had agreed to swap roles,allowing Putin to regain the presidency for asmuch as 12 more years. (www.kremlin.ru)

President Yeltsin hands Vladimir Putin the seals of office,31 December 1999. (www.kremlin.ru)

President Putin’s inauguration speech, 7 May 2000.(www.kremlin.ru)

Putin’s St Petersburg friend Alexei Kudrin becameRussia’s most successful finance minister.

(www.kremlin.ru)

Putin with his early team of reformers, German Gref,Alexei Kudrin and Andrei Illarionov. (Courtesy of RIA

Novosti)

President George W. Bush with Putin in 2001, when Bushlooked into Putin’s eyes and saw his soul.

(www.kremlin.ru)

Bush and Putin became good friends despite serious policyclashes. (www.kremlin.ru)

US Secretary of State Condoleezza Rice and Russiandefence minister Sergei Ivanov came to trust one another

after 9/11. (www.kremlin.ru)

Tony and Cherie Blair with the Putins at the MariinskyTheatre, St Petersburg, March 2000. (www.kremlin.ru)

Putin with one of his closest Western allies, Italian leaderSilvio Berlusconi. (www.kremlin.ru)

Putin got on less well with German chancellor AngelaMerkel, whom he tried to scare with his dog.

(www.kremlin.ru)

Victims of the Putin regime?

Oil tycoon Mikhail Khodorkovsky. (Photo by OlegNikishin/Getty Images)

Journalist Anna Politkovskaya. (Photo by Schreibstube)

Ex-KGB agent Alexander Litvinenko. (Photo by NatasjaWeitsz/Getty Images)

Putin’s placeman in Chechnya, Ramzan Kadyrov. (Photo byRuslan Alkhanov/AFP/Getty Images)

All smiles at Putin’s first meeting in 2004 with theWestern-oriented Georgian leader Mikheil Saakashvili.

Saakashvili later mocked the Russian as ‘Liliputin’.(www.kremlin.ru)

Viktor Yushchenko and Yulia Tymoshenko, leaders ofUkraine’s Orange Revolution. (Courtesy of European

Peoples Party)

Putin’s patriots. The Russian leader holds regular meetingswith his young supporters in Nashi. (www.kremlin.ru)

Putin’s portraits for sale in a stationery store. (VladimirMenkov)

Putin as a child dreamt of joining the KGB.(www.kremlin.ru)

After university he fulfilled his dream. (www.kremlin.ru)

Putin with his wife Lyudmila on a rare public appearancetogether. (www.kremlin.ru)

Putin’s appearances with his dog Koni are more frequent.(www.kremlin.ru)

Putin the judoist. (www.kremlin.ru)

Putin discovers two Grecian urns in the Black Sea in thesummer of 2011. His spokesman later admitted they were

planted for him. (Courtesy of RIA Novosti)

Doing the butterfly stroke in an icy Siberian river.(Courtesy of RIA Novosti)

Putin at the controls of a jetplane. (www.kremlin.ru)

Putin and Dmitry Medvedev celebrate the latter’s electionas president in May 2008. The crowd on Red Square

chanted only Putin’s name. (www.kremlin.ru)

During the 2009 financial crisis, Putin forces billionaireOleg Deripaska to sign a paper promising to get the one-

factory town of Pikalyovo working again. (Courtesy of RIANovosti)

July 2009: President Barack Obama explains his plans for aUS–Russian ‘reset’ at Putin’s dacha. (www.kremlin.ru)

June 2010: President Medvedev heads off with BarackObama for a hamburger lunch. (www.kremlin.ru)

Foreign minister Sergei Lavrov and Secretary of StateHillary Clinton press a toy ‘reset button’. (www.kremlin.ru)

The modernising Medvedev is rarely seen without his iPad.(Courtesy of RIA Novosti)

Dmitry Medvedev became president in 2008 knowing hewould probably hand back to Putin four years later.

(www.kremlin.ru)

In September they told a congress of the United Russiaparty that they had agreed to swap roles, allowing Putin to

regain the presidency for as much as 12 more years.(www.kremlin.ru)