In Putin’s ramshackle Russia — successor to the Soviet Union (“Upper Volta with ICBMs”) — as recently as 2018, almost a third of medical facilities lacked running water, 40 percent lacked central heating and more than half lacked hot water. But a fortunate few people live large, as is explained in Catherine Belton’s exhaustive new book (500 pages, 1,735 endnotes), “Putin’s People: How the KGB Took Back Russia and Then Took On the West.”
Mikhail Khodorkovsky was the richest Russian, and the world’s richest person under 40, until Putin’s 2003-2005 destruction of him, in a fraudulent judicial process, on bogus charges of fraud and tax evasion. This episode, the hinge of recent Russian history, taught the rest of Russia’s elite, who had grown fabulously wealthy in the 1990s by buying and plundering former state enterprises, this lesson: Russia’s private sector was only provisionally private, subject to Kremlin whims.
Belton says that “by 2012 more than 50 percent of Russia’s [gross domestic product] was under the direct control of the state and businessmen closely linked the Putin.” Belton calls the takeover of Russia’s political, economic and legal systems by Putin and other KGB alumni “hybrid KGB capitalism.” But state-directed capital allocation actually is crony socialism.
Belton, the Financial Times’s Moscow correspondent from 2007 until 2013, detects in today’s Russia a residue of the incense of the old Communist church, but without even the Soviet pretense that the interests of the governing kleptocrats coincide with those of the governed. One former Russian insider, now in luxurious London exile, says Putin’s cohort are “mutants,” a “mixture of homosoveticus with the wild capitalists of the last twenty years.” Belton says that when capitalists of the 1990s “began to eclipse their former sponsors in the KGB,” Putin broke the successful to the saddle of the state.
Putin cut his sharp teeth controlling St. Petersburg’s port, in collaboration with an organized crime group. Belton reports that a city official, who tried to reclaim the city government’s rights that were lost when the port was privatized, “was shot dead by a sniper as he drove to work.” In November 1998, four months after Putin became head of the KGB’s successor agency, St. Petersburg’s “leading democrat” and “most vocal crusader against corruption” was “shot dead at the entrance to her apartment.”
Assassinations, blackmail via sex tapes and other gamy practices propelled Putin to the top in what Belton calls “a creeping coup by the security men.” He was installed partly by nouveau riche oligarchs who — like the German grandees who made Adolf Hitler chancellor on Jan. 30, 1933 — “thought Putin was a temporary figure they could control.”
Belton’s concluding chapter, “The Network and Donald Trump,” is devastatingly judicious: She says his Russian partners were alleged associates of Russian mobsters who funneled cash through real estate developments with Trump, on behalf of the sometimes melded interests of Russian intelligence services and organized crime. When, in the 1990s, Trump’s precarious finances caused other banks to shun him, Deutsche Bank, which Belton says had “a special relationship with Putin’s Kremlin,” became “Trump’s lender of last resort,” in one 2011 instance providing more than $300 million, even though he had defaulted on a $334 million payment.
Earlier this month, Putin demonstrated that Russia’s constitution is essentially fictitious by adding 206 amendments. They were ratified by a preposterous referendum. (Covid-19 spoiled Putin’s plan to hold it on April 22, Lenin’s birthday.) Copies of the amended “constitution” were in bookstores before the referendum. One amendment reset the presidential term-limits clock, so in 2036 an 84-year-old Putin could enjoy his 36th presidential year (counting the four years, 2008-2012, during which Putin allowed a sock puppet to pretend to be president). Joseph Stalin ruled for 29 years, Catherine the Great for 34.
President Barack Obama in 2014 dismissed Russia as merely a “regional power.” Some region: The Eurasian landmass is dominated by, and Europe is menaced by, a thugocracy whose president is pleased with the U.S. president.