The New Tsar (76 page)

The costs, and the assumption that much of the money had been stolen, made many question the wisdom of holding the Olympics. It was a backlash that many host cities experience, but in Russia the expense was coming at an inauspicious time. Russia’s economy still relied heavily on natural resources, and after bouncing back from the worst of the economic crisis, it had stalled again. Growth had slowed from 3 percent in 2012 to barely over 1 percent in 2013. The consumer boom fueled by oil prices had not translated into better government services. Putin’s approval ratings—an imperfect measurement given the state’s grip on the media—slumped in 2013 to the lowest level recorded since he first became president in 2000. According to one agency, Putin’s rating had peaked the month after the war in Georgia at 88 percent, but by now it bumped along at barely above 60.
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Even fewer of those questioned had faith in the country’s direction or the president’s policies, certainly not in the rapacious and ineffective bureaucracy, which seemed to resist even Putin’s decrees.

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n the slopes of Krasnaya Polyana that day in February, Putin’s frustration boiled over as he conducted his latest personal inspection tour of venues still scrambling to be ready on schedule. On these tours, said Mayor Pakhomov, Putin rarely expressed appreciation for a job well done; he was a taskmaster who set expectations and was furious when they were not met. Pakhomov spoke of these encounters with awe of the power of Putin’s will. Putin was now determined to make a public spectacle of his displeasure. Dressed in a black overcoat, he stood amid a gaggle of his senior aides at the newly completed bobsled center. The head of the Sochi organizing committee, Dmitri Chernyshenko, was explaining the seating arrangements when Putin unexpectedly turned the conversation to another venue, the ski jump, which of all the examples of waste and delay was about to become the most notorious.

The project, called Gornaya Karusel, or Mountain Carousel, was overseen by Akhmed Bilalov, a vice president of the Russian Olympic Committee who also happened to have owned the land beneath it and, until recently, shares in the company that had been hired to do the construction. He had sold those to his brother. Bilalov, a businessman from Dagestan who had once served in the Duma, was close to Dmitri Medvedev and his team of advisers. He had been appointed to the Olympic committee during Medvedev’s presidency, as well as to a project that Medvedev hoped would redevelop the Northern Caucasus by building a series of ski resorts, even one in Chechnya, as a way to tame the last remnants of the insurgency in the region by creating economic opportunities. The ski jump had been hampered by poor location, sloppy design, and construction techniques that, according to environmentalists, had probably caused a landslide in 2012 that nearly buried the site. Expensive new retaining walls had to be constructed, as well as a road to the site that had not been in the original contract. The budget for the project, which had begun at $40 million, had ballooned to more than $260 million, and yet only a year before the games it remained a muddy and unfinished construction site, littered with material and debris.

The men in Putin’s entourage looked uncomfortable. Chernyshenko did not seem to know how to answer Putin’s queries about the delays. Putin scanned the men, until Dmitri Kozak finally stepped forward to explain, under Putin’s grilling, that it was two years behind schedule. Now Putin wanted to know who was responsible. “Comrade Bilalov,” Kozak replied as the entourage shifted nervously around him.

“And what is he up to these days?”

Kozak stammered that he did not know. Putin turned and glared at the others. Someone said that he now ran the Northern Caucasus Resorts Company and was also on the Russian Olympic Committee, the head of which, Aleksandr Zhukov, also stood among them.

“So he’s your vice president, is he?” he asked. Zhukov could only nod as Putin pressed on relentlessly. “And the vice president of the Olympic committee of the country is engaged in this kind of construction?”

“He owns a construction company of some sort,” someone interjected from the back. Putin turned again to Kozak, leading him on like a prosecutor with a reluctant witness.

“Have there been increases in the cost of the facility’s construction?” Putin asked. Kozak, now looking at the ground, seemingly unprepared for this interrogation or perhaps just nervous, detailed the costs generally
and the sources of the money. Putin pressed for exact figures, though, and when Kozak gave them, he repeated them disgustedly.

“Well done, guys!” he said with icy sarcasm that would, of course, feature prominently on state television. “Let’s move on.” He then turned and walked off.

Bilalov, on Putin’s orders, was sacked the next day from all his posts. A swarm of investigations began into his work at the Northern Caucasus Resorts, including lavish expenses for him to travel to the Summer Olympics in London in 2012. Bilalov, along with his brother, Magomed, promptly fled the country, surfacing briefly in April at a clinic in Baden-Baden, Germany, where he said he had elevated levels of mercury in his blood and suspected he had been deliberately poisoned. His doctors later claimed the poison in his body was arsenic and molybdenum.
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The brothers Bilalov relocated to London, while Putin assigned the task of completing the ski jump to Sberbank, headed by German Gref. Putin had known Gref since the 1990s and, despite his intermittent oblique critiques of Putin’s policies (testifying at Khodorkovsky’s trial, for example), trusted him to finish the job.

The ski jump was not the only project behind schedule and over budget, and some suspected Putin of singling it out because its owners were tied to Medvedev’s team and thus expendable.
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Others, though, saw the performance as evidence that Putin was, at last, cracking down on the corruption gnawing at Russia, or at least making a show of it to deflect mounting criticism of the Olympic project. Justice remained selective, however, and there were no meaningful prosecutions, even in Bilalov’s case. Corruption had become so pervasive it was institutionalized. That made it a tool of co-option and coercion. Anyone could be prosecuted, when necessary, because almost everyone was complicit—and even if they were not, they could be charged anyway. The threat of corruption hovered over anyone and thus tamed everyone. In Bilalov’s case, Putin’s concern was less about confronting corruption than with sending a very public warning to those involved in his Olympic dream that they had better finish on time. When he visited the ski jump again in December, this time with Gref in attendance, it had been completed—though ultimately at a great loss to Sberbank’s bottom line.
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n June 23, 2013, an Aeroflot flight from Hong Kong landed in Moscow with what Putin would sardonically call “such a present for us for Christmas.” On board was Edward Snowden, the young, deeply disillusioned
contractor for the National Security Agency who had handed over to
The Guardian
and
The Washington Post
tens of thousands of highly classified documents detailing the pervasive American surveillance of telephones and computer networks, often in collaboration with its allies Canada, Britain, Australia, and New Zealand. Wanted by the United States on espionage charges after his disclosures, Snowden slipped out of Hong Kong after meeting with officials at the Russian consulate there, accompanied by a lawyer for WikiLeaks. Snowden had hoped merely to change planes in Moscow for a flight to Cuba, but the State Department revoked his passport in an effort to cut short his flight. The move backfired when the Chinese let him leave for Moscow anyway. When he arrived at Sheremetyevo Airport, he was effectively stranded without papers. As a result, he spent the next five weeks in a diplomatic limbo and under, presumably, the close watch of the FSB.

In Washington, officials panicked. They pleaded with Russia to put him on a plane for the United States, while fretting in private over the grave risk that Snowden might share even more of what he knew with the Russians. Putin seemed to relish the unexpected opportunity to chide the Americans. Snowden had committed no crime on Russian soil, he said during a visit to Finland two days later, acknowledging Snowden’s presence in the airport’s transit lounge. Snowden was a human rights defender who “struggles for the freedom of information,” Putin said. “Ask yourself, do you need to put such people in jail, or not?” He said he did not want to trouble himself too much with the details of Snowden’s case, leaving it to the director of the FSB, Aleksandr Bortnikov, an old colleague who had joined the KGB in Leningrad in 1975, the same year Putin had. “In any case, I would personally prefer not to engage in such matters, because it’s like shearing a piglet: a lot of squealing, but little wool.”

After years of facing criticism from the United States over his record on rights, the irony was sweet. The Russian media hailed Snowden as a hero, comparing him to Andrei Sakharov, his revelations against the United States as noble as Sakharov’s against the Soviet Union. Three weeks into his limbo in the restricted transit area, the Kremlin allowed Snowden a platform to meet lawyers and leaders of rights organizations, including three—Human Rights Watch, Amnesty International, and Transparency International—whose offices had been raided by Russian investigators as part of the hunt for “foreign agents.” Snowden read a written statement saying he would seek political asylum rather than return
to a country that had violated its own laws. “A little over one month ago,” he said, “I had family, a home in paradise, and I lived in great comfort. I also had the capability without any warrant to search for, seize, and read your communications—anyone’s communications at any time. That is the power to change people’s fates.”
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Snowden’s odyssey was a diplomatic and intelligence coup for Putin. Although the extent of Snowden’s cooperation with Russian intelligence agencies remained unknown—and was fiercely disputed by his supporters—the FSB closely monitored this unexpected “gift.” “He is actually surrounded by these people,” said Andrei Soldatov, a journalist who wrote extensively about Russia’s intelligence agencies and later complained that Snowden could not or would not meet with independent Russian journalists like him.
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The Snowden affair gave Putin the evidence that confirmed his complaints about American hegemony and perfidy, the hypocrisy of the three American administrations he had now dealt with. Snowden’s disclosures tarnished President Obama’s reputation and undercut his foreign policy, souring relations even with allies like Germany, whose chancellor, Angela Merkel, learned that her own telephone conversations had been tapped. It also mitigated the disclosures that journalists like Soldatov and his wife, Irina Borogan, had been making about Russia’s own extensive surveillance of its citizens through a program called SORM, or the System of Operative-Investigative Measures. They described SORM as “an Orwellian network that jeopardizes privacy and the ability to use telecommunications to oppose the government.”
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The effort expanded the reach of the intelligence services deeper and deeper into the Internet and social-media sites that had until recently seemed free of government interference. The number of intercepts had doubled since 2007, trapping communications of opposition leaders like Boris Nemtsov and Aleksei Navalny and leaking them to Kremlin-friendly news organizations. Given Snowden’s disclosures, how could the United States object to Russia’s creeping surveillance state?

Almost certainly with Putin’s approval, Russia’s migration service granted Snowden temporary asylum on August 1, giving him a permit to live and even work in the country; Snowden slipped out of the transit terminal and began a new life in Moscow’s shadows. The decision, which the White House learned from news reports, drove a final nail in the “reset” in relations Obama had pursued with Medvedev, one that had been withering ever since Putin’s return to the presidency. A week later Obama canceled plans to hold a separate meeting with Putin before
the G20 summit that had been scheduled in Petersburg for September. Obama’s frustration with Putin boiled over. At a press conference, he said there seemed little point in meeting Putin now given their differences over policies and worldviews—the disputes over missile defense, over the turmoil in the Middle East, over the crackdown on opposition in Russia, the banning of American adoptions, the passage of a new law barring the distribution to children of “homosexual propaganda”—not to mention the rising tide of anti-Americanism appearing on state television and in official statements. Obama described Putin as sullen and insolent, a taunt that infuriated Putin, according to an aide. “He’s got that kind of slouch,” Obama said, “looking like the bored kid in the back of the classroom.” Obama’s aides had convinced themselves that Putin craved the respect that such a meeting of the two world leaders would entail, but Putin acted as if he did not care nearly as much as they assumed. “You cannot dance tango alone,” Putin’s spokesman, Dmitri Peskov, declared.
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ithin weeks, events in Syria proved Peskov right. In August a barrage of rockets loaded with nerve agents struck a suburb of Syria’s capital, Damascus, killing 1,400 people. Obama had warned two years before that the use of chemical weapons by Syria’s government would cross “a red line” that would prompt an American military response, and within a week the Pentagon had drafted plans for a retaliatory missile strike against Syria’s army. Putin said nothing publicly, but Russian officials scrambled to muddy the debate, casting doubt on the evidence that President Bashar al-Assad’s forces had been responsible. Putin told Britain’s prime minister, David Cameron, that there was no evidence of “whether a chemical attack took place,” and if so, who carried it out. Putin had little personal sympathy for Assad; what he vehemently opposed was another American-led attack in the Middle East. He was convinced that from the beginning the United States had been waiting for any pretext to attack and topple Assad, and he was far more resolved in that conviction than Obama was in his determination to punish Syria for the deadliest use of chemical weapons since the Iran-Iraq War in the 1980s.