The New Tsar (42 page)

Putin’s anger at Khodorkovsky conflated his fears about the coming parliamentary election, scheduled for December 2003, and the disgust he and his closest aides from Petersburg felt toward this political upstart, this man who exploited the chaos of the 1990s to enrich himself and now felt he could use that wealth to dictate Russia’s course. “We have a category of people who have become billionaires, as we say, overnight,” Putin said in an interview with
The New York Times
as the investigations climaxed in October. It seemed a discordant answer; the question had been about criticism in the West of Russia’s hesitant embrace of democracy, not about Yukos or Khodorkovsky. “The state appointed them as billionaires,” he said. “It simply gave out a huge amount of property, practically for free. They said it themselves: ‘I was appointed a billionaire.’ Then as the play developed, they got the impression that the gods themselves slept on their heads—that everything is permitted to them.”
³⁹
A senior Kremlin official said that Putin saw it as his “historical mission” to thwart Khodorkovsky’s ambitions not just to buy or influence politics, but to seize the country itself. Putin would use whatever means he had at his disposal to stop Khodorkovsky, the official said. “Unfortunately, that can’t be done in a way that looks pretty.”
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O
n October 23, a fax arrived at the Yukos headquarters in Moscow, signed by Vladimir Ustinov, summoning Khodorkovsky to answer questions about the company’s payment of taxes involving the Apatit fertilizer company. Khodorkovsky had not seen the summons, his lawyer claimed,
⁴¹
and he flew to Siberia to continue his political barnstorming before the coming elections. When his private jet landed to refuel in Novosibirsk shortly before dawn on October 25, elite FSB commandos appeared, surrounded the plane, and then stormed aboard. Russia’s richest man was forced to the cabin floor, handcuffed, hooded, and taken on a military aircraft back to Moscow.

Khodorkovsky’s arrest rocked Russia’s stock markets, sending shares lurching up and down all week as investors, and other political leaders, tried to make sense of what was happening. In nearly three years in office, Putin had presented himself as a reformer, a free-market champion who was bringing prosperity to the country. Now he seemed to have come down decisively on the side of the hardliners in his government, the
siloviki
. “Capitalism with Stalin’s face,” a headline in
Nezavisimaya Gazeta
screamed on the Monday after Khodorkovsky’s arrest. Another newspaper,
Novaya Gazeta
, declared that the law-enforcement agencies had seized power, and “the president had done nothing to stop that coup.”
⁴²
The union of businessmen, which until that weekend had included Khodorkovsky, issued a statement condemning the arrest, saying it had “thrown the country backwards.”

Putin met his cabinet two days after Khodorkovsky’s arrest. As the country’s stocks, currency, and bonds plummeted, he called for an end to the “hysteria and speculation.” He rebuffed a plea from the business union to discuss the case, icily declaring that there would be “no bargaining on matters related to the activities of the law enforcement bodies” and warning the government ministers around the table that they should not involve themselves in the matter. He went on to say that he assumed “the court had good reasons to take this decision,” though the final approval for Khodorkovsky’s arrest had come from Putin himself.
⁴³

The “liberals” in Putin’s camp, including Mikhail Kasyanov and his old Petersburg colleagues, German Gref and Aleksei Kudrin, were dismayed by the investigation, seeing it as a sign of the end of their reforming mission.
⁴⁴
Kasyanov had adhered to his agreement with Putin from 2000: he oversaw the government’s economic policies and left the security matters to Putin. Now Putin was very much involved in economic
affairs, despite Kasyanov’s protests. Five days after the arrest, the prosecutor general froze Khodorkovsky’s and his partner’s shares in Yukos. This represented nearly half the company, with a worth of $14 billion before their value collapsed with the rest of the market. A spokeswoman for the prosecutor general insisted the freezing was not a “confiscation or nationalization,” but it would turn out to be exactly that. Kasyanov spoke out the next day, saying the seizing of assets was a “new phenomenon” whose consequences could not be predicted.
⁴⁵
He was “deeply concerned,” but he no longer had any influence over the events.

Only one among Putin’s circle of advisers registered any real protest. Aleksandr Voloshin, the chief of staff who had stayed on from Yeltsin’s administration and maintained close ties to the country’s business elite, resigned on the day of Khodorkovsky’s arrest. Putin tried to talk him out of it during a series of meetings in the Kremlin the following week, but Voloshin felt that the administration that had begun with such promise had exhausted itself and was now flailing about in search of enemies. When his resignation was announced, the Kremlin said nothing about the reasons behind it. Putin simply replaced him with Dmitri Medvedev, his young protégé, and elevated another ally from Petersburg, Dmitri Kozak, as Medvedev’s deputy. Voloshin’s departure thus only solidified Putin’s team. When Voloshin and his colleagues gathered for a farewell drink at the Kremlin, Putin arrived late. He sat in the last empty seat at a long table and offered a toast, saying he thought it was a mistake for Voloshin to leave. Putin’s presence caused long, awkward silences until he excused himself, saying he felt like he had interrupted.
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K
asyanov asked three times why Khodorkovsky had been arrested before Putin told him that the tycoon had crossed the line by funding his political opponents. Putin was not, as some feared, renationalizing the country’s industry or even taking on the oligarchs so much as taking down a man he viewed as a political threat to the power he was accreting. Several days after Khodorkovsky’s arrest, Putin told his economic adviser, Andrei Illarionov, that he had been protecting the tycoon for some time from those in his circle who wanted to punish him. Instead, Khodorkovsky had ignored repeated warnings and had “chosen to fight” the Kremlin. Putin told Illarionov that he decided then to step aside and let Khodorkovsky “solve his problems with the boys by himself.”
⁴⁷
It was an attack less violent than the ice pick that had killed Trotsky in Mexico City on Stalin’s orders, but it was just as crude and just as effective.
Khodorkovsky was arrested only six weeks before the parliamentary elections in December, and for all the national and international condemnation, the blow to investor confidence and the losses on the markets, the assault on one of Russia’s oligarchs proved immensely popular among Russians, the vast majority of whom had little or nothing invested in stocks in the first place.

When the elections took place, Putin’s bloc in the Duma, now rebranded as United Russia, cruised to an overwhelming victory. It did so despite having only the vaguest platform beyond supporting Putin. Vladislav Surkov, the Kremlin’s strategist, had begun his career working with Khodorkovsky, but now he exploited populist sentiment against the oligarchs by cynically associating them with the Communist Party. He also orchestrated the creation of a new party, Rodina, or Motherland, four months before the vote with the sole purpose of siphoning votes from the Communists by appealing to nationalist and socialist themes, as did Vladimir Zhirinovsky, the leader of the uproariously misnamed Liberal Democratic Party of Russia, who was known for clownish antics and xenophobic harangues.

It was a listless campaign, marked by growing apathy. What debate there was rehashed Russia’s economic collapse in the 1990s as if the electorate still wanted to exact its revenge on the corruption and chaos that democracy brought. The whole of the Yeltsin era, the economic hardships and the oligarchs, including Khodorkovsky, came under blistering assault on state television, the message driven home over and over: Putin had ended the collapse. “If by democracy, one means the dissolution of the state, then we do not need such democracy,” he told a group of foreign journalists before the election when asked about accusations that democratic freedoms were being eroded. “Why is democracy needed? To make people’s lives better, to make them free. I don’t think there are people in the world who want democracy that could lead to chaos.” The chaos that continued to afflict Russia—including a suicide bombing on a passenger train not far from Chechnya that killed forty-two people two days before the election—was simply airbrushed away. The Organization of Security and Co-operation in Europe criticized the Russian state media for exhibiting a clear bias in election coverage and cited evidence of administrative abuses in the campaign that favored United Russia or punished the others. The Communist leader, still the aging Gennady Zyuganov, filed a formal complaint when 800,000 ballots showed up in the republic of Bashkortostan already checked off for United Russia.
⁴⁸

Putin had a sleepless night before the election. Lyudmila explained why when they showed up early to vote at their polling station.
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His beloved black Labrador, Koni, had given birth to eight puppies. Putin had received the dog as a gift in December 2000 after he visited a kennel where she had been trained for search and rescue. She was said to be descended from a Labrador once owned by Leonid Brezhnev. Koni joined the poodle Putin had given his daughters, Toska,
⁵⁰
and quickly became his favorite, accompanying him even to official meetings at his residence, serving as a humanizing prop or an intimidating one.
⁵¹
When Bush visited Novo-Ogaryovo, Putin compared Koni to Bush’s Scottish terrier, Barney. “Bigger, faster, stronger,” he said.
⁵²

The news of the puppies received far more coverage than the opposition parties, who by the end of the day had been routed. United Russia, despite having no independent political identity, won handily with 36 percent of the vote, enough under the system for distributing seats to win an outright majority of seats in the Duma. The Communist Party won less than 13 percent of the vote, half their showing of four years before, when Putin’s political career had only just begun. Yeltsin had narrowly beaten back a Communist resurrection in 1996, only five years after the collapse of the Soviet Union; Putin had effectively buried the threat for good.

The Liberal Democrats and the newly hatched Rodina won nearly as many votes, leaving Gennady Zyuganov seething. “This shameful farce which is currently being shown to us has nothing to do with democracy,” he said.
⁵³
Yabloko, the stalwart of liberal politics since the days of perestroika, and the Union of Right Forces, dominated by the liberal economic reformers who had protested Khodorkovsky’s arrest the loudest, failed even to reach the 5 percent threshold required to win a bloc of seats. They had withered under the Kremlin’s pressure and succumbed to infighting among themselves. Except for a handful of deputies who won individual mandates, the Duma would not have a bloc of liberals for the first time since the Soviet collapse. By the time the final ballots were counted and the seats apportioned, Putin could count on a parliamentary majority of more than 300 of the 450 seats—in other words, enough to adopt any legislation the Kremlin saw fit and even to change the Constitution, which people had already begun to note limited a sitting president to two terms in office. “We now have, again, a one-party parliament,” Yabloko’s leader, Grigory Yavlinsky, said glumly the morning after the vote, sitting in an elegantly rebuilt Kempinski
Hotel with a view of Red Square, a symbol itself of the prosperity that had begun to emerge in Putin’s era. Even at the end of the Soviet era there had been a sort of legislative debate. “Russia has had no such parliament since Brezhnev.”

Putin’s Kremlin reveled in the electoral triumph. Vladislav Surkov gloated that the liberal parties that failed to win seats should “realize that their historical mission has been completed.” Putin represented the end of the “old political system,” he said. “A new political era is coming.”
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CHAPTER 14

Annus Horribilis

O
n September 1, 2004, Putin was in Sochi on the Black Sea, trying not very successfully to spend the waning days of the country’s traditional August holidays in the subtropical climate. By now he spent more time in the presidential compound there than in any of the Kremlin’s other official residences outside Moscow. It was here that he frequently held meetings with foreign leaders, including one the day before with Jacques Chirac of France and Gerhard Schröder of Germany, the “troika” who had publicly opposed the American war in Iraq. Without exactly gloating, they felt their forewarnings of disaster had been affirmed as the swift American toppling of Saddam Hussein’s government turned into a deadly insurgency. Putin had grown so close to Schröder that he expedited the adoption of a Russian orphan for him and his wife. Each leader, finding common cause with Putin against the swaggering policy of George Bush, muted his country’s criticism of Russia, including the war in Chechnya.

Putin’s August vacation had already been disrupted by an ominous string of tragedies. On August 21, a bold raid by insurgents in Chechnya killed at least fifty people. It followed a similar raid in neighboring Ingushetia in June that had killed nearly a hundred and came only days before Chechnya held a new election, which Chirac and Schröder would praise as evidence that Putin sought a political solution to the conflict, now in its fifth year. Then, on the night of August 24, two passenger airliners took off from Domodedovo Airport in Moscow, roughly an hour apart. Almost simultaneously, around eleven o’clock, they both exploded in midair, destroyed by suicide bombers, both women. One had paid a bribe of a thousand rubles to get on one of the planes after boarding had already closed. One plane was headed to Volgograd, the second to Sochi. Eighty-nine people died.