Strongman (13 page)

In October armed police raided Khodorkovsky’s orphanage near Moscow and took away its computers. And a few days later the president of ExxonMobil, Lee Raymond, came to Moscow for an
economic conference and talks with the president. He appears to have given Putin the – probably wrong – impression that Khodorkovsky planned to sell the American company not just 25 per
cent but a controlling 51 per cent of Yukos-Sibneft. Khodorkovsky’s deputy, Alexander Temerko, concedes, ‘a company like Exxon cannot be a minority shareholder. Of course it says,
we’ll buy 25 per cent, but we need an option for a controlling stake.’

Putin was by now, it seems, incandescent with rage. BP’s John Browne recalled later: ‘Shortly before Khodorkovsky’s arrest, in a private conversation, Putin made a passing but
steely remark to me: “I have eaten more dirt than I need to from that man.” ’

Putin called in the prosecutor general, Vladimir Ustinov, to arrange Khodorkovsky’s arrest. It came on 25 October. The oil tycoon had flown to Siberia, quixotically ignoring a fax that had
arrived two days earlier, bearing Ustinov’s signature, summoning him to report to the prosecutor’s office in connection with ‘irregularities in the tax regime of the Yukos oil
company’. As his plane refuelled in Novosibirsk, armed FSB troops stormed it and led Khodorkovsky away in handcuffs. His defiance of the
siloviki
was about to cost him his freedom and
his fortune.

The reaction

The headlines said it all: ‘Capitalism with Stalin’s face’ (
Nezavisimaya gazeta
), ‘A coup in Russia’ (
Kommersant
). The
New York
Times
wrote: ‘Russia lurched toward a political and economic crisis as the country’s stocks, bonds and currency plummeted after the weekend arrest of Russia’s richest
man.’

Khodorkovsky’s colleagues in the Union of Industrialists and Entrepreneurs issued a statement condemning the arrest: ‘Today Russian business does not trust the law-enforcement system
and its leaders. Thousands of small and medium enterprises suffer daily from their arbitrary rule. The authorities’ crude mistakes have thrown the country backwards by several years and
undermined confidence in their statements about the impermissibility of reversing the results of privatisation.’

Trading on the tumbling Moscow currency exchange was suspended. Putin’s chief of staff, Alexander Voloshin, resigned. His successor, Dmitry Medvedev, publicly questioned the wisdom of the
arrest, saying, ‘This is a dangerous thing, as the consequences of measures not fully thought out will have an immediate effect on the economy ... and cause indignation in
politics.’
¹⁶
Amid the turmoil, Putin rejected calls from other oligarchs for a meeting, and demanded an end to what he called the ‘hysteria
and speculation’, adding (as if he were a mere bystander) that for the courts to arrest a man they must have had reasons to do so. ‘There will be no meetings, no bargaining about the
work of the law enforcement agencies.’ Government ministers, he said, should not get dragged into discussing the matter.

The prime minister, Kasyanov, tells a curious story about a certain appointment that the Kremlin wanted him to make around this time. Viktor Ivanov, the former FSB general whom Putin had taken
on as his chief head-hunter, called Kasyanov several times, urging him to appoint a certain young man as a deputy tax minister. Kasyanov demurred, not understanding the urgency of the appointment
and unsure why the man, who had worked most of his career in St Petersburg furniture stores, was qualified for the job. He was not aware at the time that Anatoly Serdyukov was the son-in-law of
Viktor Zubkov, the first deputy finance minister (and former St Petersburg colleague of Putin). When Kasyanov was sacked in February 2004, Serdyukov was immediately moved to the tax ministry
– where he was put in charge of the case against Khodorkovsky, and within two weeks promoted to be head of the Federal Tax Service. Putin now had a man he could trust to assemble the most
damaging evidence against his enemy.

The two faces of Putin

The events described in this chapter – the stifling of the media, the establishment of the ‘vertical of power’ and appointment of Putin’s cronies to key
jobs, the war in Chechnya, the callous response to the sinking of the
Kursk
, the taming of the oligarchs and the persecution of Khodorkovsky – all had a salutary effect on those in the
West who had decided from the outset to do business with Putin. The man who was stretching his hand out to Western leaders, and implementing welcome economic reforms at home, was at the same time
acting true to type, confirming his own phrase: there is no such thing as an ex-Chekist. His actions strengthened the hand of those in the West – particularly in the Bush administration
– who from the start had advocated a tough stand against him.

In Britain, the
Observer
newspaper expressed a common view, saying it was now ‘crunch-time’ for Putin, and he must decide who he wanted to be. ‘Is he the westward
leaning ally of President Bush and Tony Blair, or someone whose real affection is for the bad old days of the Soviet Union? ... If Mr Putin opts for the authoritarian path, then it is time for
London and Washington to reassess relations.’
¹⁷

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

5

A foot in NATO’s door

It was Tony Blair, perhaps, who best understood the ache that gnawed at Vladimir Putin’s KGB soul. The two men continued to meet regularly after the ground-breaking first
visit to St Petersburg before Putin was elected. As well as formal talks they had jeans-and-shirt-sleeves get-togethers at Chequers, the prime minister’s country residence, and
tête-à-têtes over vodka and pickled gherkins at Pivnushka, a Moscow beer hall. Blair tried to soothe the Russian’s anxieties about American plans for a missile defence
shield. And behind Putin’s bluster about how Moscow would have to take counter-measures he sensed a deeper problem.

One of Blair’s aides, in an off-the-record interview, put it in terms that were so condescending they would have incensed Putin had he known this was what Blair thought: ‘The main
thing Tony took away from those meetings was the need to treat them seriously. Their problem was that they felt excluded from the top table and weren’t being treated as a superpower. You had
to show them respect. Even if they weren’t really a superpower any more,
you had to pretend they were
. This was the point Tony made to the Americans.’

To put flesh on the idea, Blair came up with a proposal to create a new NATO–Russia Council (NRC), to bind the Russians more closely to the Western alliance – stopping well short of
membership, but at least giving them a sense of belonging to the club. The NRC would represent a significant upgrading of relations from the consultative ‘Permanent Joint Council’ that
had existed since 1997 and given Russia zero influence over the alliance’s actions. Russia would now have a permanent ambassador at NATO headquarters, who would participate in sessions of the
NRC on a par with each of the 19 other ambassadors – not ‘Russia plus NATO’, in other words, but ‘Russia plus the US, France, Britain, Germany’, and so on.

Blair’s initiative went down well in Western capitals, where it was seen as a realistic alternative to the more fanciful vision of actual NATO membership, which some, including the German
chancellor, had discussed. The idea soon got hijacked by the Italian prime minister, Silvio Berlusconi, who had also been striking up a bond with Putin. The two men were rather similar in
temperament – equally ‘blokeish’, equally vain and with a similar taste in earthy or tasteless jokes. Putin also saw in Berlusconi’s media empire some justification for his
own control of Russian television.

One Friday evening early in 2002, NATO’s secretary general, George Robertson, had just got off a plane at Edinburgh airport, heading for a weekend at home in Scotland, when his mobile
phone rang. It was Berlusconi. He had decided that Italy would host a special NATO summit to launch the NRC.

‘Hang on, Silvio,’ said Robertson. ‘We haven’t quite got to that point yet.’

‘No, no,’ replied Berlusconi. ‘I have spoken to Vladimir. It’s all agreed. We will host the summit – and we will pay for it.’

Robertson was not going to be pushed around. ‘You can’t just do a deal with Putin. There are 19 countries in NATO and I have to consult all of them. But we’ll take your offer
into account.’
¹

The proposal to pay for the summit, however, was a clincher. It didn’t take long to persuade the others to let Berlusconi stage the show. And a show it was, with no expense spared.
Berlusconi took a run-down air base at Pratica di Mare outside Rome and transformed it into the Roman equivalent of a Potemkin village – a palatial canvas conference centre modelled on the
Colosseum, complete with ancient marble statues.

The historic agreement was duly signed on 28 May. It would allow Russian generals for the first time to have permanent offices in NATO’s headquarters. And while Russia would not be able to
veto alliance decisions, it would at least take part in joint discussions about issues such as peacekeeping, regional security, search-and-rescue operations and the fight against international
terrorism and nuclear proliferation. In practice, according to Blair’s chief of staff, Jonathan Powell, the original idea – to give Russia a ‘real voice’ – got watered
down in the NATO bureaucracy.
²
Russia would later complain that NATO representatives would usually meet ahead of any Council session, coordinate their
position and then effectively act as a bloc in their talks with Russia.

At the press conference after the signing ceremony, Putin said something that startled some of those present with its frankness. ‘The problem for our country,’ he said, ‘was
that for a very long period of time it was Russia on one side, and on the other practically the whole of the rest of the world. And we gained nothing good from this confrontation with the rest of
the world. The overwhelming majority of our citizens understand this only too well. Russia is returning to the family of civilised nations. And she needs nothing more than for her voice to be
heard, and for her national interests to be taken into account.’

His words were so powerful that Robertson remembered them and could almost recite them from memory nine years later. ‘That seemed to me to be quite a dramatic appraisal, a confession, by a
Russian leader about the years of failure and what he aimed to do in the future.’

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

Just what do we think of Russia?

Within the Bush administration there were two diametrically opposed views of what to do about Russia – plus many shades of opinion in between. Those, like national
security adviser Condoleezza Rice, who spoke Russian and had a background in Soviet studies, were not necessarily the best disposed towards the new Russia. Several of Putin’s advisers have
described her to me as ‘a Soviet expert, not a Russia expert’. They felt that she still viewed Russia through red-tinted spectacles. She took a tough line on Russia’s aggression
in Chechnya, and an even tougher line on any Russian interference in neighbouring countries, which she took to be a sign of post-Soviet recidivism – but nonetheless she did try to understand
the underlying causes of Russian policies.

Some of the Russia experts in the administration argued that there was not enough consideration of where Russia was coming from, that you couldn’t expect it to become
‘Westernised’ overnight (or perhaps at all), and that the way to win Putin round was to understand his fears (the Blair view) and accept that Russia had a legitimate right to expect its
voice to be heard and its interests to be taken into account. This view was represented most strongly at the highest level by Secretary of State Colin Powell. According to one insider, speaking off
the record, President Bush himself, having developed a real friendship with Putin, tilted in that direction, but policy tended to be shaped more by those who simply did not trust Russia, the
so-called ‘neo-cons’ such as Vice-President Dick Cheney, Defence Secretary Donald Rumsfeld, Under-Secretary of State John Bolton, Dan Fried, who handled European and Eurasian affairs at
the National Security Council, and Nick Burns, US ambassador to NATO (and later under-secretary of state). Somewhere between the two camps were national security adviser Condoleezza Rice and her
deputy Stephen Hadley.

The insider went on: ‘Some of the policy makers understood a lot, but they understood it from a particular perspective. The real drivers behind Russia policy were people who had been
working on European security issues all the way through the 1990s, and the goal was to continue the unfinished business of the 1990s – a Europe free, undivided and peaceful and all the rest
of it. And there was a view that if you took in the Russia perspective you were somehow affirming its right to assert certain interests or privileges.’

So Bush’s Russia policy was largely forged by people who were above all concerned with the security of Central and Eastern Europe, who believed the West had ‘won’ the Cold War,
and were determined to cement the former Soviet satellites into the free West, including NATO and the European Union – even at the risk of alienating Russia in the process. Poland, the Czech
Republic and Hungary had already joined NATO in 1999, and now the alliance was about to embark on a second wave of enlargement, to include Slovakia, Slovenia, Bulgaria and Romania, plus –
most controversially as far as Russia was concerned – the Baltic states of Estonia, Latvia and Lithuania, which had once been part of the USSR and stood right on Russia’s present
borders.