All the Kremlin's Men

PART ONE

PUTIN I THE LIONHEART

CHAPTER 1

IN WHICH KREMLIN STRATEGIST ALEXANDER VOLOSHIN LEARNS TO TOLERATE LENIN

Alexander Voloshin looks like a model capitalist. With his gray beard and cold, piercing eyes, there is a dash of Uncle Sam in his appearance, as depicted in Soviet cartoons. All that’s missing is the stars-and-stripes hat, the sack of dollars over the shoulder, and the bomb in one hand behind the back.

Voloshin’s office is located in the center of Moscow near the Polyanka Metro station, a ten-minute walk from the Kremlin. The inside is austere, almost monastic. It has everything one needs and nothing else. No luxury—the secret ruler of the world does not need it.

Voloshin is no orator. He speaks in hushed tones, with a slight stutter when angry. Yet he loves to pepper his Russian speech with English and other borrowings, mainly from the world of business. “The situation in Ukraine is not very . . . ,” he starts in his native tongue, ending with the word “manageable” in English. “One must always have in mind an . . . agenda.” “What we have is total . . . deadlock.” “The most important opinions belong to the key . . . stakeholders.” It is not intentional; he just finds it easier that way. He is, after all, more businessman than politician.

Voloshin believes that he has fulfilled his primary mission: “to transfer Russia from a state of permanent revolution to a state of evolution.” In other words, before he resigned from the government in October 2003, he succeeded in bringing political stability and capitalism to Russia. He says he has no regrets about his present inability to influence politics.

On the topic of politics, he prefers to speak in purely business terms: “The United States built the best economy in the world through competition. But it somehow forgot that world politics also needs competition. That’s why its foreign policy is a failure.” Despite subjecting America to the occasional tongue-lashing, he does so lovingly, with unexpected details: “. . . and then I bumped into Jeb Bush”; “. . . and then I spotted my old acquaintance Condoleezza Rice but decided not to say hi.”

Mention Ukraine, however, and he flies into a fury; the English words at the end of his sentences are replaced by Russian expletives. For him, everything the Ukrainian government does is a crime. “What if the Canadians treated French-speakers in Quebec in that way [as Ukraine does Russian-speakers]? If they had done this, they would have ended up much worse off.”

GOODBYE, LENIN

In 1999 the Kremlin had a clear plan for Lenin’s overdue burial. His body was to be quietly removed from the mausoleum in Red Square and taken to St. Petersburg in the dead of night under the strictest secrecy. The country would wake up one morning to the news that Lenin no longer reposed in Red Square.

It was to be a repeat of Stalin’s eviction from the same tomb, which had taken place thirty-eight years earlier, on an autumn evening in 1961. The journey to his new resting place had not been far—only to the adjacent Kremlin wall. But for Soviet leader Nikita Khrushchev, it was a symbol of de-Stalinization and the debunking of Uncle Joe’s personality cult.

The reburial of Lenin was to take place “with dignity and without vulgarity,” says Voloshin. A two-week cordon would have to be set up around Volkovo Cemetery in St. Petersburg (where Lenin’s mother and sister are buried, and where the founder of the Soviet state himself allegedly wanted to be buried), but nothing more. Several months of protests by the Communist Party were expected, but after that, tempers would cool. The plan was to dismantle the mausoleum and erect a monument to the victims of totalitarianism on the site so that no one would have the heart to object. Coming eight years after the dissolution of the Soviet Union, it was to be a decisive blow against the remnants of Communist ideology, preventing any possibility of Soviet revanchism and a resurgence by the Communists.

As chief of staff in the Kremlin, Voloshin occupied an office just steps from Lenin’s sarcophagus in the mausoleum.^aa “My desk stood by the window. It was no more than fifteen meters in a straight line from me to the corpse. He was lying there, I was working here. We didn’t bother each other,” says Voloshin wryly. In fact, Lenin did cause a great deal of bother. President Boris Yeltsin was eager to break with the past. For him, Lenin’s burial would have been a symbol of the new age and the irreversible changes that had occurred, just as the burial of Stalin had been for Khrushchev. The first proposal to bury Lenin came in 1991 from St. Petersburg’s first mayor, Anatoly Sobchak. But neither then nor in subsequent years could Yeltsin bring himself to do the deed—he did not want to provoke an unnecessary conflict with the Communists.

For Voloshin, however, Lenin was not so much a symbol as a specific and very active player in day-to-day policy. The struggle between Yeltsin’s market-oriented reformers and the Communist Party was his primary source of daily anxiety. Lenin was an irritant but simultaneously the ace up his sleeve—a chance to deliver a sucker punch to the enemy. The Communists had become the main force in parliament and were therefore able to torpedo vital reforms. And since the 1998 Russian financial crisis they had also effectively controlled the government, which was headed by sixty-nine-year-old Yevgeny Primakov, a former candidate member of the Politburo of the Communist Party of the Soviet Union (that is, a member who participated in debates but was not eligible to vote) and former minister of foreign affairs of the Russian Federation.

Boris Yeltsin’s second term as president had a little more than eighteen months left to run. Meanwhile, the Communists seemed stronger than ever. They had even launched an impeachment case against Yeltsin, indicting him on five counts: the collapse of the Soviet Union, the dispersal of parliament in 1993, the war in Chechnya, the disintegration of the army, and genocide of the Russian people. Prime Minister Primakov, for whom the Communist members of parliament had voted unanimously in September 1998, topped the polls among politicians nationwide and seemed the most likely candidate for the presidency.

Primakov was particularly renowned for making a demonstrative anti-American gesture. On March 24, 1999, Primakov was on board a plane to Washington, above the Atlantic, when he received a call from US vice president Al Gore to inform him that the United States had begun a bombing campaign against Yugoslavia to end the conflict in Kosovo. Outraged, Primakov ordered the plane to turn around and return to Moscow—a gesture that was applauded by the Russian public, whose sense of national pride had been wounded by the fall of the Soviet Union and the chaos that ensued. By contrast, the Russian press, which was both pro-Kremlin and liberal (which, in the Russian context, means pro-democracy), criticized Primakov for populism and flirting with Communist voters. Kommersant, Russia’s top business daily, insisted that Primakov’s political grandstanding had cost Russia $15 billion as a result of agreements that Washington now would not sign: “In acting in such manner, the Russian prime minister made a choice. He chose to be a Communist, a Bolshevik, oblivious to the interests of his native land and people in favor of internationalism, which is intelligible only to himself and former members of the Communist Party,” railed the paper.¹

The Atlantic U-turn was the first act of state-level anti-Americanism in 1990s Russia. It also marked the start of the decisive battle for power between the conservative anti-Westerners, under the banner of Primakov, and the liberal and pro-Western forces eager to thwart Soviet revanchism. The latter had no leader per se but did have a secret coordinator: the head of Boris Yeltsin’s presidential administration, Alexander Voloshin.

The Communists had to be knocked off balance, and the reburial of Lenin might be just the thing that would do it. But under the relevant law, Lenin’s body could be moved only if one of three conditions was met: (1) if the move was expressly desired by Lenin’s descendants (but all were strongly against); (2) if local authorities—such as Moscow mayor Yuri Luzhkov—decreed it necessary “for sanitary and environmental reasons” (but Luzhkov had no intention of entering the power struggle on the side of the Kremlin and the liberals); or (3) if the tomb hindered public transport. It could not be moved by presidential decree alone. Violation of this law was considered a criminal offense and would have added vandalism to the Communists’ list of indictments against Yeltsin. It was too risky. Therefore, the Kremlin decided to try a different tack—it would target not Lenin but Primakov.

On May 12, 1999, three days before the impeachment vote against Yeltsin in the Duma (the lower house of the Russian parliament), Primakov was sacked, with the official reason being “lack of dynamism in prosecuting reforms to solve economic issues.” On May 15 the Communists failed to gain the three hundred votes they needed to commence impeachment proceedings. The presidential administration worked in close association with Duma parliamentarians, and almost all independent MPs voted against the impeachment. It was a tactical triumph for Voloshin, but it did not resolve the issue of how to prevent the Primakov-Communist alliance from securing victory the following year, when Yeltsin’s second presidential term would end.

The crux of the matter was that Yeltsin’s circle contained virtually no politicians with any significant approval rating. The aged Yeltsin’s own approval rating was incredibly low, largely due to press and opposition (mainly Communist) allegations against his family. Journalists back then referred to Yeltsin’s “Family,” using a capital F to indicate that the president’s nearest and dearest had special and at times disproportionate influence in state affairs and perhaps business as well. Yeltsin’s Family included first and foremost Tatyana (Tanya) Borisovna Dyachenko, who was Yeltsin’s daughter, and Valentin (Valya) Yumashev, the former head of his administration. They would later marry, tying the knot in 2001. In a broader sense, the Family also included the oligarchs closest to Tanya and Valya, Boris Berezovsky and Roman Abramovich. The last member of the Family was its “personal representative,” Alexander Voloshin, head of the Yeltsin administration, who was also charged with rescuing the Kremlin from the dire situation in which it found itself.

Coming from the world of business and having worked in the 1990s for dozens of companies of varying repute, Voloshin was considered a committed statist. He upheld the interests of the state as he perceived them. A market economy seemed to him to be absolutely vital, while human rights and freedom of speech were a superfluous and at times inconvenient detail. Kremlin insiders sometimes referred to Voloshin as the “ice man” for his cold resolution in matters that seemed to him of fundamental importance.

MANAGING THE SUCCESSION

The Family was strongly opposed by Moscow mayor Yuri Luzhkov. Luzhkov had long been considered the natural successor to the Russian presidency, despite—or perhaps thanks to—his image as the antithesis of Yeltsin (much as the mayor of Paris, Jacques Chirac, had played a similar role in regard to the elderly French president François Mitterrand). Luzhkov was known across Russia neither as a liberal nor as a conservative, but simply for being a good manager.

Luzhkov wanted power for himself and rarely tried to hide his ambitions. His bid for the presidency began in 1998, when he created the “Fatherland” movement—a party that comprised a group of regional governors with a background in the Soviet bureaucracy. He had his own group of supporters inside the Kremlin, who tried to persuade Yeltsin to pick their man as his successor. But Yeltsin had never liked Luzhkov.

Luzhkov recalls that the Family sent Boris Berezovsky as its emissary with a message: Luzhkov would get the nod to succeed Yeltsin on two conditions—a guarantee of immunity for the entire Family and a guarantee of the inviolability of the results of privatization. Luzhkov refused, whereupon (in his own words) he became the target of a slander campaign.

Luzhkov was sure that the Family was in trouble, beyond salvation. According to rumors, the head of the Investigation Department of the Prosecutor General’s Office had already signed warrants for the arrest of Tanya and Valya. Cynical observers asked just one question: “Will they have time to get to the airport?” Naturally, Luzhkov was reluctant to join the fight on the side of those he considered to be the losers. He wanted to associate himself with the winners.

Voloshin, the new Kremlin chief of staff, paid visits to Luzhkov and drank tea with him in an attempt to curry favor. But no amount of tea could win him over. Luzhkov smelled presidential blood and was preparing to go in for the kill. However, the vicious war of words between him and the Family had slashed his own approval rating. So the mayor of Moscow did something cunning. He supported Primakov, letting the aged patriarch of the nation take center stage, while he waited in the wings. He calculated that his turn would come four years later.

The Kremlin had no counterweight to the heavyweight Primakov. Facing defeat, the Family started casting around for a successor. It took until August 1999 to find him. His name was Vladimir Putin, director of the FSB (successor to the KGB). This young, unknown intelligence officer was the former right-hand man of Anatoly Sobchak, mayor of St. Petersburg from 1991 to 1996 and a popular first-wave democrat.

Two days before Putin’s appointment as prime minister, militants from Chechnya invaded the neighboring North Caucasus republic of Dagestan. Unlike his predecessors, who had been constantly plagued by economic woes, Putin was able to score political points by taking the fight to an external enemy. A month later terrorists blew up two apartment blocks in Moscow, an event that weakened Mayor Luzhkov and slightly strengthened Putin.

Even so, it was impossible to imagine that the sorely discredited Family could actually prevail in the presidential election. Yevgeny Kiselyov, Russia’s leading TV presenter and general director of the television channel NTV, declared live on air in September 1999 that Primakov was “fated to win.” Primakov topped the polls and enjoyed the backing not only of Luzhkov but also of almost all of Russia’s regional governors. He was financed by Russia’s two largest oil companies, Lukoil and Yukos, as well as the “Russian Bill Gates,” Vladimir Yevtushenkov. He was supported by the energy company Gazprom and the country’s main media mogul, Vladimir Gusinsky, owner of NTV, which was Russia’s most reputable TV station at the time.

But that wasn’t the half of it. Three months remained until the next parliamentary elections. Since 1990 no pro-Kremlin party had ever performed well in them, and this time around the situation was worse than ever. The Kremlin didn’t even have its own party. Primakov, on the other hand, had a party that was set to win the State Duma. It included almost all the country’s regional governors, which meant that Primakov had administrative leverage nationwide. The Fatherland-All Russia (FAR) political bloc, formed from Luzhkov’s Fatherland movement, was the firm favorite.

The dream of burying Lenin had to be postponed again. The struggle against the Communist legacy was put to one side. First and foremost, the Family and their candidate had to defeat the former Communist Yevgeny Primakov.

A NEW YEAR’S FAIRY TALE

On December 31 Alexander Voloshin, head of the Yeltsin administration, wrote an official resignation letter. One hour later his boss, President Yeltsin, resigned as well, whereupon Prime Minister Vladimir Putin was appointed acting president. It marked the successful completion of the transfer of power—what journalists described as “Operation Successor.”

“What’s that for?” asked Putin upon seeing Voloshin’s resignation letter. The latter explained with a smile that he had been appointed Kremlin chief of staff by the former president, and Putin should name his own man. Putin returned the smile and asked Voloshin to remain in his post. The Kremlin’s new lord and its old-new chief political strategist exchanged bows and went their separate ways.

Twelve days earlier, the parliamentary elections had turned out to be a triumph for Voloshin and his brainchild, the synthetic political bloc Unity. Unity had outperformed its main competitor, Fatherland-All Russia (FAR), headed by Primakov and Luzhkov—something that had seemed impossible just three months before.

The Central Election Commission had registered FAR in the elections in early September. Thirty percent of respondents to a national poll said they would support FAR, giving it a wide margin over other parties—FAR was even ten points ahead of the Communists. All seemed to be going well. It was then—three months before the election—that Alexander Voloshin began to assemble a new party to rain on Primakov’s parade.

The godfather of Unity was Boris Berezovsky, whom the Russian press christened the “gray cardinal” of the Kremlin. A former mathematician and academic, Berezovsky was an erratic genius bursting with ideas, which the Kremlin exploited. He had the ear of Tanya and Valya, but Yeltsin was suspicious of him and never once granted him a private meeting. But Berezovsky compensated for this by telling stories to the press about how the Kremlin’s entire policy was his work.

Berezovsky was indeed the fountainhead of Unity. He personally visited several regional governors to persuade them to abandon Luzhkov and Primakov and switch their allegiance to the Kremlin. But pretty soon Berezovsky lost interest in the routine work of party building, handing responsibility over to Voloshin’s young assistant Vladislav Surkov, who would soon become deputy chief of staff. It was to be the first election campaign for Surkov, Putin’s future political strategist.

The Kremlin’s new project managed to attract the support of a total of thirty-nine regional governors, leaving Primakov with forty-five in the FAR camp. Next up was the identification of a leader. Putting Putin forth in that role was dangerous, since an electoral failure would make it impossible for him to succeed Yeltsin in the presidential contest. Therefore, another popular candidate was chosen as a safety net: minister of emergency situations Sergei Shoigu. “Shoigu to Save Russia” headlines appeared in pro-Kremlin newspapers even before he had agreed to run. In the end he had to be persuaded by Yeltsin himself.

Funding for Unity came primarily from Berezovsky and Abramovich, although money was also raised from some of Primakov’s backers, businessmen who wanted to hedge their bets. The average check from an oligarch was for $10 million, and Unity raised a total of about $170 million.

Voloshin also courted the liberal community, explaining that FAR represented the past, Soviet revanchism, and the KGB’s attempt to regain power. Primakov had indeed been appointed first deputy director of the KGB in the late perestroika years under Gorbachev, but he had never served as an intelligence officer.

All liberals, reformers, and those in favor of change should be on the side of Unity and Putin, said the Kremlin through Voloshin. In truth, Unity was full of the same kind of regional opportunists as FAR, essentially those that FAR could not accommodate. Nevertheless, Unity had made a good start. Primakov’s main problem was his age, which heightened his resemblance to the ailing Yeltsin. Putin and Shoigu, on the contrary, were young and energetic. By early October only 20 percent of polled potential voters said they were planning to support FAR, down from 30 percent, and Unity’s support was up from nothing to 7 percent. Asked whom they would choose in the presidential election, 15 percent of those surveyed said they would vote for Putin, while Primakov had the support of 20 percent of poll respondents.

The next two and a half months saw the dirtiest election campaign in Russian history. At the heart of it were the two political strategists who were running the election campaigns, each fighting to annihilate the other. In the Kremlin’s corner was Vladislav Surkov, and in Primakov’s was a young political consultant from Saratov by the name of Vyacheslav Volodin. It was the first of their many scraps. They would spend the next fifteen years fighting for influence over Putin.

On election day Surkov’s Unity secured 23 percent of the parliamentary seats under the party-list proportional representation system (one percentage point behind the Communists), with Volodin’s FAR receiving 13 percent. But more significant was that Putin’s poll numbers had risen to 30 percent, while Primakov’s remained stuck at 20 percent.

The unexpected defeat in the December 19 elections disheartened the Primakov-Luzhkov camp. However, FAR headquarters believed that since the presidential election was six months away, there was still everything to play for. Moreover, they were confident that their new Duma MPs could form a coalition with the Communists, who had the most seats, and that the Speaker of the Duma would be none other than Primakov himself, from which position he could vie with Prime Minister Putin for the presidency. Primakov’s future campaign staff had even started to allocate decision-making duties among themselves. Everyone was confident that there would be no significant changes before New Year’s. It was time to relax after the exertions of the past few months.

But things turned out differently. On December 31, 1999, when Boris Yeltsin announced his resignation as president and the appointment of Vladimir Putin as his successor, he ensured that the presidential election would be held in March instead of June (under the constitution new elections had to be called within three months after the resignation of a president). This meant that Primakov, Luzhkov, and other Kremlin opponents had little time to organize their opposition. They would barely have time to recover from their defeat in the parliamentary elections. It was a shady maneuver on the part of the Kremlin, but it would deliver the necessary result.

No one immediately understood that the game was over. While Primakov’s camp had been busy assigning campaign roles, Kremlin chief of staff Voloshin, still accompanied day in and day out by Lenin fifteen meters away and dreaming of parting company with him, was thinking the unthinkable: an arrangement with the Communists. The main objective of the Kremlin was simple: split the alliance between the Communists and Primakov supporters. “It’s more important to screw Fatherland,” posited a Kremlin insider. “The party appeals to opportunists. We need to show that if they stay with Primakov and Luzhkov, they’re on a siding to nothing.”

On January 18, at the first session of the new Duma, it was revealed that over the New Year holidays Unity and the Communists had concluded a package deal: the Speaker of the Duma would be a Communist Party member, while the chairmanships of all committees would be shared. The other parties, including FAR, would get nothing. For Primakov’s entourage it was a devastating blow. They had thought they were entering the Duma to make policy and political careers for themselves, but Voloshin made it clear that if they opposed the Kremlin, they would remain ordinary MPs in minority parties. For diehard careerists it was ruinous. Realizing that the fates had deserted Primakov, a third of FAR’s up-and-coming members defected to other factions at the very first sitting. “It’s a conspiracy!” shouted Primakov from the podium, and promptly left the chamber in protest.

As a result, he did not even run for president. He quit the Duma eighteen months later, handing over the reins of FAR to his protégé, the promising MP Vyacheslav Volodin. But the latter quickly swore allegiance to Putin, whereupon a merger between FAR and Unity was arranged by the end of 2001. The new ruling party was to be called United Russia, and ten years later Volodin would be the Kremlin’s chief political strategist.

SOVIET SYBARITES

The amount of money that business interests gave to Putin’s election campaign was embarrassingly large. Sergei Pugachev, a banker close to the Family and now friends with Putin, is said to have launched a fund-raising campaign among his peers in big business, ostensibly on behalf of Putin. But the money allegedly did not reach Putin’s official campaign.