The New Tsar (21 page)

Putin seemed indifferent to the academic undertaking. He rarely mentioned it during the writing or afterward, though he did list it on his résumés, which had probably been the point in the first place. It is possible he was embarrassed by its academic unscrupulousness, or the improbable facility with advanced mathematics
⁴⁵
that he had never displayed as a student. The thesis nevertheless showed an interest in the economics of natural resources that was a fixation for the circle of friends he had gathered in Petersburg (and later at the Ozero dacha cooperative founded in 1996). Putin defended the thesis at the Mining Institute in June 1997, and one of those critiquing his presentation described his defense as “brilliant.”
⁴⁶

Now, in Moscow, he was in a position to influence the distribution of those resources on a national, not regional, level. An international commereial
dispute over a gold deposit in Siberia, for example, prompted Putin to write a report in 1997 recommending the dismissal of the first deputy minister of natural resources, Boris Yatskevich. Yatskevich served in the ministry that granted mining permits, even as he served as chairman of the board of the company, Lenzoloto, which held the license to the deposit. Putin found the arrangement a flagrant violation of the law.
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As was typical in Yeltsin’s government, nothing happened; in fact, Yatskevich went on to become the minister of natural resources. Putin, though, began to formulate strong views about the necessity of reexerting state authority to put an end to the pilfering of the country’s most precious assets. In an essay published in the Mining Institute’s annual periodical two years later, he argued that natural resources would prop up Russia’s economy for “at least” the first half of the twenty-first century, but they would require foreign investment and the strong guiding hand of the state in licensing and regulating the exploitation of the riches buried beneath the vast expanse of Eurasia.
⁴⁸
Few academics ever have the chance to put their ideas so directly into practice, but Putin soon would. First, though, he had another piece of unfinished business in Petersburg.

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A
natoly Sobchak’s exile from power had not been tranquil. The investigation that had begun during his reelection campaign had not ended, not even after Yeltsin dismissed those who had plotted against Sobchak’s reelection. They might have left office, Sobchak noted, but they had not left “the abyss in which they flew.”
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And they had allies in the parliament, which by April 1997 passed a resolution calling on the prosecutor general’s office to finish the various investigations into “the heinous crimes” of Sobchak and several of his deputies.
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Meanwhile, Sobchak’s public commentary on political affairs won him no allies inside the Kremlin. In January 1997, he criticized Yeltsin’s leadership, saying his illnesses had created “virtual anarchy” and the “criminalization of authority.”
⁵¹
By July, one of his advisers, Larisa Kharchenko, was arrested and charged with negotiating bribes paid by the head of the construction company Renaissance, and Sobchak was summoned as a witness. The arrest of his chief of staff, Viktor Kruchinin, followed. All summer, leaks filled newspapers with details of the case and speculation that Sobchak himself was about to be arrested. He complained that his phone was tapped and that he was followed everywhere he went by agents of the
FSB, even as he ignored a dozen summonses to testify and denied he had done anything illegal in privatizing city property.
⁵²

He had reason to be paranoid: he was caught in Yeltsin’s highly publicized, if not particularly serious, campaign against corruption, one in which Putin himself was playing a prominent role. On October 3, investigators and ten heavily armed special police arrived at Sobchak’s office, now in the UNESCO headquarters, and arrested him as a material witness. While being questioned in the prosecutor’s office, Sobchak complained of chest pains and was taken to the hospital. His wife said he suffered a heart attack, though no one believed it and the hospital’s doctors did not confirm it. Either way, he was well enough the next day to fulminate to the news agency Itar-Tass that the investigators’ work recalled the Great Terror of 1937. “Only in 1937 they would have killed me,” he said.
⁵³

Sobchak spent a month in the hospital, his fate resting on the diagnoses of physicians. Even Yeltsin, whose antipathy for Sobchak had grown, felt the prosecution was going too far. He sent a message to the prosecutor general, Yuri Skuratov: “You can’t harass a sick man.”
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But the prosecutors pressed on. They doubted Sobchak’s claims about his health and arranged to have doctors from Moscow examine him. Before they could arrive, though, Putin intervened. Putin visited Sobchak in the hospital and arranged for his transfer to the Military Medical Academy under the care of Yuri Shevchenko, who had treated Lyudmila after her car accident and remained a close and trusted friend. Then he plotted Sobchak’s escape.

On November 7, a holiday still although it no longer officially celebrated the Bolshevik revolution, Putin collected Sobchak’s medical records and chartered an aircraft from Finland at a cost of $30,000—paid for, according to Sobchak’s wife, by “friends,” though some reports said the source was the cellist Mstislav Rostropovich.
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Putin called on his old contacts in the local police and intelligence service to accompany an ambulance that quietly transferred Sobchak from the hospital ward to a waiting plane at Pulkovo Airport. Despite the warrants for Sobchak’s arrests, the public furor over his case, and his own vows to remain in Russia to defend himself against the charges, he and his wife, Lyudmila Narusova, passed through customs on the tarmac, had their passports stamped, and flew to Paris.

Putin’s involvement was certainly audacious and very likely illegal,
even if the Sobchaks’ documents were in order. As he had in 1991, he risked his own future out of loyalty to the charismatic, flawed leader who had been “a friend and a mentor.”
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Only in a country where the justice system had broken down could he have succeeded in spiriting Sobchak to safety abroad. Only in a dysfunctional political system could his brazen defiance of the law have earned him admiration—and not just among his close circle of friends.

Sobchak’s flight created a furor, and Putin’s role in the affair did not remain secret for long. “Putin understood the injustice of what was happening to his former boss and political mentor better than anyone,” one admirer wrote later. Putin “sensed danger more quickly and acutely than others” and acted out of loyalty and nothing more. “When I learned that Putin had helped send Sobchak abroad, I had mixed feelings. Putin had taken a great risk. Yet I profoundly admired his actions.” The admirer was Boris Yeltsin, and when he mulled the infighting and betrayals of his appointees, he felt awe at such a display of loyalty.
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CHAPTER 8

Swimming in the Same River Twice

A
fter a year heading the Main Control Directorate, Putin grew tired of conducting investigations that yielded mixed results. He had uncovered corruption, only to have cases stall in a judicial system that he understood was easily manipulated. He had little power to challenge the vested interests of officials, and yet he also showed little zeal for crusading to change the system. “It was not very creative work,” he recalled. He claimed later that he considered leaving Yeltsin’s erratic government for the private sector in the winter of 1997–1998. He thought about creating a law practice, though he doubted he could make a living with it. What stopped him, indirectly, was the looming collapse of the new Russian economy, and very nearly the state with it.
¹
By the beginning of 1998, Putin was swept up in what was described as the “revolution of unknown middle managers.”
²
Yelstin turned to these faceless young apparatchiks in order to avert a national calamity and his own political demise.

The year after Yeltsin’s reelection and convalescence following heart surgery, the country appeared to have stabilized after its lurch through its post-Soviet crises. Inflation eased, and the economy grew for the first time since 1989, although less than half a percent. No one was exactly optimistic, but the worst seemed to have passed. “Everyone was filled with hope, myself included,” Yeltsin wrote in his memoirs. “I hoped that by the second half of 1997 and in early 1998 we would sense that something in the country was changing.”
³
Something was, but not what he or anyone else imagined. The economic crisis that swept Asia in the fall of 1997 dragged down the world economy and, most critically for Russia, the price of oil. A barrel of oil at the end of 1997 sold for less than it cost Russia’s oil companies to extract it; in the first three months of 1998, the industry that provided most of Russia’s resources
lost
more than $1.5
billion.
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Government revenues, already depressed by rampant tax evasion and capital flight into offshore accounts, plummeted, and Yeltsin’s government soon drained its reserves trying to keep up.

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O
n March 21, 1998, Yeltsin summoned his prime minister, Viktor Chernomyrdin, to his dacha, where he now spent more time than he did in the Kremlin. Chernomyrdin had served in the office for more than five years, proving to be a bulwark in the government through the worst years of political and economic turmoil. With Yeltsin increasingly weakened and a new election already on the horizon, some thought he could be the president’s successor, an idea that tormented Yeltsin, who wanted someone “absolutely free of the influence of any political or financial groups.”
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So he fired Chernomyrdin and then offered vague and conflicting reasons for his action. He claimed the country needed a technocrat, but in truth he wanted a subordinate as prime minister, not a rival in waiting. Yeltsin’s choice to replace him was Sergei Kiriyenko, a former banker from Nizhny Novgorod. He was thirty-five, nearly a quarter century younger than Chernomyrdin, and had arrived in Moscow only the year before to serve as energy minister. He only learned his fate the morning of the announcement and, according to Yeltsin, had “to collect himself and make sense of it all.”
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T
he Duma twice rejected Kiriyenko’s nomination, underscoring Yeltsin’s waning influence and intensifying an atmosphere of political crisis. Chernomyrdin promptly announced he would seek the presidency in 2000, confirming Yeltsin’s fear of his ambitions. Even some of the oligarchs who had backed Yeltsin two years before now threw their support behind Chernomyrdin, most importantly Boris Berezovsky. A short, balding former mathematician, Berezovsky had built a financial empire that included automakers, banks, oil, and a controlling interest in a state television network, ORT, which he wielded as an instrument of political power and vengeance. Yeltsin had appointed him to his Security Council after his reelection in 1996 and then promptly fired him. Berezovsky was mercurial and faithless; an ally was in his mind a “temporary phenomenon,” a security official once said. “For Berezovsky, people are divided into two categories: a condom in its packaging and [a] condom that has been used.”
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Berezovsky viewed Kiriyenko as a reformer in the mold of Anatoly
Chubais or Boris Nemtsov, the young liberals brought in to restructure Russia’s economy. In other words, Kiriyenko stood in the way of his business interests.
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He unleashed the full force of his television network against the nominee, allying himself with the Communists in the parliament who despised him as a rich tycoon. Yeltsin succeeded in pushing through Kiriyenko’s appointment only by threatening to disband parliament, as allowed by the Constitution, if it failed to approve the nomination after three votes. Kiriyenko was narrowly confirmed on the third vote. Yeltsin’s opponents in parliament consoled themselves by drawing up articles of impeachment.

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T
he shakeup in Yeltsin’s government created yet another opening for Putin. In May 1998, he took his third new job in the Kremlin in less than two years. He was never close to Yeltsin and was not then powerful enough to figure in his intrigues. And yet his competence and loyalty had enabled him to rise in the bureaucracy, often to the surprise of people like Chubais. This time Yeltsin appointed him the first deputy director of the presidential administration, putting him in charge of relations with the country’s eighty-nine regions. The job was a natural extension of his work at the Main Control Directorate, where he had amassed files of corruption and malfeasance by regional officials. Russia is nominally a federation of its regions, and though the Constitution of 1993 gave the president broad, centralized authority, many operated as independent fiefs. By virtue of their local elections, the regional leaders also had independent political authority and thus posed potential threats to Yeltsin’s preeminence. Yeltsin’s distrust only intensified when Aleksandr Lebed, his challenger turned ally turned enemy, won election as governor in the Krasnoyarsk region of Siberia in May and made clear that his presidential ambitions had not diminished in the least.