The New Tsar (19 page)

Not everyone had, though. Too many fortunes relied on Yeltsin. They included Russia’s richest men, bankers and media moguls who the year before had acquired the state’s controlling assets in major industries in exchange for loans to keep the country’s budget afloat: Boris Berezovsky, Mikhail Fridman, Vladimir Gusinsky, Mikhail Khodorkovsky, and Vladimir Potanin. They were the pioneers of the post-Soviet gold rush, who through genius, guile, and grit cobbled together vast, diverse conglomerates that would almost certainly be at risk if Yeltsin did not
remain in office. Although rivals in business, they found a common cause against Yeltsin’s chief opponent, the Communist leader Gennady Zyuganov. Dull, heavy-browed, and shaped like a barrel, Zyuganov was by now a Communist largely in name only, but he and his party represented the enormous resentment that the collapse of the Soviet Union had wrought. With the party’s strong showing in parliamentary elections in 1995—it won the most Duma seats by far—it was no longer inconceivable that Zyuganov could prevail, simply because of the unpopularity of the oligarchy that had come to define Yeltsin’s chaotic presidency. Musing on the fate of himself and his wealthy supporters, Yelstin thought, “The Communists will hang us from the lampposts.”
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When Zyuganov appeared at the World Economic Forum in Davos, Switzerland, in February 1996, he was greeted as a president in waiting. Something had to be done. Berezovsky, Gusinsky, and Khodorkovsky thus met over dinner with another banker, Vladimir Vinogradvov, and made the “Davos Pact” to ensure Yeltsin’s reelection in June.
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They offered Yeltsin’s campaign millions in cash—and attached their strings to it. They insisted that Anatoly Chubais, Putin’s former colleague in Sobchak’s entourage and the author of the privatization programs that begot their billions, return to Yeltsin’s team as his campaign manager. (Chubais had been fired as deputy prime minister that January, as Yeltsin lurched from scandal to scandal.) With Yeltsin’s daughter, Tatyana Dyachenko, Chubais orchestrated an exquisitely Russian version of the modern political campaign, bankrolled by financial schemes so ingenious and convoluted that investigators never could track all the money spent, by some estimates as much as $2 billion.
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Yeltsin’s health and his erratic behavior were shielded from voters, his activities so carefully scripted as to almost appear normal. Berezovsky and Gusinsky controlled two of the country’s most popular television networks, ORT and NTV, and they produced documentaries portraying Yeltsin as the genial, healthy leader he had once been.

When the election was held on June 16, Yeltsin narrowly won a plurality with 35 percent of the vote, two million votes ahead of Zyuganov, but not enough to avoid a runoff. Aleksandr Lebed, a decorated general who had resigned his commission the year before to enter politics and who opposed the war in Chechnya as a grossly mismanaged waste of lives, finished a surprising third, with 15 percent of the vote. Yeltsin’s strategists had bolstered Lebed’s campaign in the last weeks before the election with an infusion of cash and television attention in a successful
effort to drain votes from Zyuganov, and now Yeltsin courted him and his voters. Yeltsin saw much to admire in Lebed. He was a “tough and unbeatable guy” who was “racing back and forth, searching for the certainty, precision, and clarity to which he’d been accustomed and couldn’t find in our new life.” Yeltsin had grown disillusioned with the country’s post-Soviet generals, who were, he thought, missing “a certain nobility, sophistication, or some sort of inner resolve.”
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As early as 1993, he claimed, he fantasized about a new general who would appear on the political scene and guide the country with a steady, professional hand, not as a tyrant, but as a democratic leader. Lebed seemed at first to be that man, and Yeltsin considered him a potential successor as president. Two days after the first round of voting, he appointed Lebed the secretary of the Kremlin’s security council, hoping to attract the votes he had received, but Lebed proved to be a disappointment from the onset. He was coarse and abrasive, impetuously clashing with other senior officials. Only days after his appointment, he berated a Cossack who asked him a question. “You say you are a Cossack,” he interrupted the man. “Why do you speak like a Jew?”
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Still, Yeltsin clung to the notion of a military man as the political savior that he seemed to understand he himself would not be. “I was waiting for a new general to appear, unlike any other,” Yeltsin mused. “Or rather, a general who was like the generals I read about in books when I was young.” He would keep looking, and find his “general,” though not in the Army, but in another security service.
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Y
eltsin’s actions before the presidential runoff exposed the rifts between his liberal advisers—his “sane forces”—and the conservative faction that included Soskovets and Yeltsin’s “generals,” Aleksandr Korzhakov and the chairman of the Federal Security Service. Yeltsin at last understood what Sobchak had tried to warn him about months earlier: the hawks in his camp “were spoiling for a fight in order to seize power in the campaign.”
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Korzhakov’s presidential guards arrested two campaign aides, close associates of Chubais and Berezovsky, as they left the White House carrying a cardboard box filled with $100 bills—$500,000 in all. The arrests threatened to expose the campaign’s secret financing. Yeltsin promptly fired his advisers, and a week later had another heart attack.

He spent the last week in a hospital bed installed in the living room of his dacha. His campaign canceled his scheduled events and pretended nothing had happened, his aides dissembling furiously when asked
about the absence of the candidate. When the runoff was held on July 2, Yeltsin could barely cast his ballot, choosing a polling station near his dacha rather than the one in Moscow he would normally have used. He managed to speak to a small pool of journalists but only for a minute before guards hustled him back to bed.

And yet, in the end, Yeltsin beat Zyuganov convincingly, winning 54 percent of the vote, compared to 40 percent for the Communist. More than three million Russians, nearly 5 percent, voted “against all.” Yeltsin had triumphed, but at an enormous cost to democratic values because of the dirty tricks, the lies, and the corrupting power of money. The outcome may have reflected the will of the electorate, but the campaign left ordinary Russians with a view of the country’s democracy that was as jaded as the one they had of its capitalism. They might not favor a return to Soviet rule, but according to one exit poll, only 7 percent of voters approved of the democracy Russia had then.
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Most Russians now associated their democracy with the dishonesty, criminality, and injustice they had long been conditioned by Soviet propaganda to fear. Russia had become, as one historian put it, a “nightmare vision of the West.”
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V
ladimir Putin, by all appearances, shared this view. He had helped run Yeltsin’s reelection campaign in Petersburg, though he played too minor a role to attract much attention in Moscow. The furious power struggle after Yeltsin’s victory, however, opened an unexpected path to the capital. Shortly after the second round ended in July, Yeltsin’s hawkish chief of staff, Nikolai Yegorov, invited Putin to Moscow and offered him a position as a deputy. Two days later, though, Yeltsin fired Yegorov and replaced him with Chubais, a reshuffling that was seen to strengthen the influence of the Kremlin’s economic reformers—and to repay the oligarchs for bankrolling his reelection. Chubais represented the Petersburg clan in Yeltsin’s new administration, and he needed allies with experience dealing with officials and businessmen.
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He turned to another man left adrift by Sobchak’s defeat—not Putin, but rather the other deputy, Aleksei Kudrin.

Kudrin, who had overseen the city’s finances and budget, was much closer to Chubais in temperament and experience than Putin, whom Chubais treated with a chilly distance. Chubais appointed Kudrin the chief of the Main Control Directorate, which served as the Kremlin’s auditor, empowered to probe the finances of government agencies and the private enterprises with which they were increasingly entwined. As
for Putin, Chubais eliminated the position in the administration that Putin had accepted from Yegorov only days before. The rebuff nurtured the animosity between the two men who had begun their public lives under Sobchak’s tutelage. “He’s so hard-nosed, like a Bolshevik,” Putin would say later of Chubais.
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Putin returned to his limbo in Petersburg that summer.

On August 18, three days after his dacha burned to the ground, Putin’s fortune changed. Yeltsin’s prime minister, Viktor Chernomyrdin, announced a new cabinet, appointing Aleksei Bolshakov, a former legislator from Petersburg who had been in charge of relations with the former Soviet republics, as the first deputy prime minister. Bolshakov once served on Petersburg’s city council, but was forced to resign after the August 1991 putsch and “wound up almost on the street.”
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He was a twice-failed candidate for the congress of deputies and later the Duma, but then took over a shadowy company with plans to build a high-speed train to Moscow that never materialized, despite obtaining millions of dollars’ worth of loans.
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When he unexpectedly resurfaced in Yeltsin’s administration, Putin treated him with obsequious formality during his working visits to Petersburg. “I never forced him to wait in the reception area,” Putin said. “I would always stop what I was doing, kick everybody out, come into the reception area myself, and say, ‘Aleksei Alekseyevich, right this way.’ We were never close, but maybe he remembered me.”
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In the palace intrigue triggered by Yeltsin’s infirmity, everyone was competing to expand their influence by bringing in trusted appointees. It was Kudrin who persuaded Bolshakov to consider Putin for a job. At first Bolshakov agreed to appoint Putin to the Directorate of Public Liaison—making him effectively a spokesman. Though Putin did not relish the idea of working with the public, he accepted. He had traveled to Moscow at the end of August, and slept on Kudrin’s sofa.
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As the men drove back to the airport the next day, Kudrin called Bolshakov again, but now he had changed his mind. Bolshakov asked Putin to stay longer in Moscow, and the next day he arranged for him to meet a flamboyant bureaucrat named Pavel Borodin, who would be the man who introduced him to the inner workings of the Kremlin.
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Borodin was a jovial politician from Siberia who managed the Presidential Property Management Directorate. From that post, he looked after hundreds of buildings and plots of land, palaces, dachas, fleets of aircraft and yachts, hospitals, spas and hotels, art and antiques, and scores of state factories and enterprises that included everything from
funeral homes to an Arctic diamond mine. By Borodin’s estimate at the time—and it could only be a guess—the value of the Kremlin’s assets exceeded $600 billion.
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Borodin showed a flair for creative capitalism, diversifying the directorate’s holdings in newly emerging sectors like banking and commercial real estate. He also used the position to replenish Yeltsin’s patronage mill, dispensing gifts of apartments and dachas, travel and vacation vouchers. The press mockingly called his office the Ministry of Privileges.
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Borodin’s pride—and folly—was an extensive renovation of the Kremlin itself, which Yeltsin began in 1994 when no one thought the country could afford the expense.
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In August 1996, Borodin signed a contract with a Swiss company, Mercata, for the renovation of the Grand Kremlin Palace, the former home of the tsars that the Communist Party of the Soviet Union had refitted with all the charm of a factory auditorium. The project succeeded in re-creating tsarist splendor, but the contracts with Mercata and a sister company, Mabetex, would also entangle Yeltsin and his family in an international scandal involving accusations of bribes and offshore bank accounts.

Putin had met Borodin before when he once visited St. Petersburg in search of a northern dacha for Yeltsin. He also once helped when Borodin’s daughter, a university student in Petersburg, fell ill.
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The exchange of these kinds of favors—known as
blat
—had been a tradition of the tsarist and Soviet systems, where informal connections and networks cut through bureaucratic obstacles. Even in a free Russia, where money mattered more,
blat
remained a currency in Kremlin politics.
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It also helped land Putin his first job in Moscow.

He was “somewhat surprised” that so elevated a bureaucrat, one with close ties to Yeltsin’s family, would take an interest in him.
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Borodin, in fact, was wary of having Putin installed in his office, as were others in the directorate “who suspected that Putin was loyal to other people and organizations.”
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Putin, for his part, was out of his element in the hothouse of conspiracy and infighting that consumed Moscow after Yeltsin’s reelection and his (still secret) preparations to undergo heart surgery in the fall. Even his experience in Sobchak’s government had not prepared him; he was an outsider in Moscow, and also something of a naïf. As he had when he entered public life in 1991, he arranged for a television interview showing him as he moved to Moscow. “Whose man are you?” was the interviewer’s first jaded question to Putin as he waited to board a flight in a lounge at Pulkovo Airport. No one, after all, rose to positions
of power in Russia without a patron, and the patrons in Yeltsin’s “family,” as in all unhappy families, were practically at war with one another. Putin, wearing an ill-fitting, luridly blue suit, demurred. He was his father and mother’s son, he replied a little too earnestly, and no one’s man. He insisted that he did not even belong to the “Petersburg clan” that was giving his political career a second act. “It’s hard for me to imagine that some kind of group or faction even exists,” he said. “I don’t intend to concern myself with that. They brought me in to work.”
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