Ben Judah - Fragile Empire - How Russia Fell in and Out of Love With Vladimir Putin

Kasyanov had a nickname that stuck like glue – ‘Misha 2 per cent’. He has never been able to shake off a reputation in Russia for kickbacks and taking a cut. The name goes back to the period when he was charged with negotiating Russia’s IMF loans. There were repeated allegations that these loans were being transferred into politically favoured banks, slush funds or simply disappearing. 5The money was urgently needed to pay wages – some months in arrears, leaving whole single-industry towns unpaid and in crisis – and to prevent vital public services from ceasing completely. He was the official who might have known how so much money could have disappeared. Though it has never been proved, corruption accusations touching Kasyanov surfaced daily in the press and were mentioned in a report for the US congress. 6He fiercely denies them as ‘black PR’, but when Putin placed him in charge of an anticorruption body, Grigory Yavlinsky, the liberal leader of the anti-Chechen-war Yabloko Party, growled that it was like ‘putting a vampire in charge of a blood bank’. 7

This was the CV of Putin’s choice. The two made a deal immediately on how to share power. As Kasyanov recalls the decisive phone call:

‘He asked me if I wanted to be his prime minister. I said “yes” – and laid out the following conditions. I enumerated a list of economic reforms that I felt were absolutely necessary for the development of the country. Putin answered: “I accept. Just stay out of my side.” So, we orally divided power like this. I would manage the implementation of economic reforms and state finances and he would concentrate on Chechnya, security, foreign policy and managing certain domestic groups.’

Kasyanov also asked for Putin not to repeat Yeltsin’s habit of dismissing the government without any explanation to the public. He agreed.

Putin needed a competent hand to manage the bulk of the government’s economic affairs. Not only was he untrained in them but, for his first few months in office, the new president had no choice but to prioritize Chechnya. Defeat in war would have turned him immediately into a lame duck. Military planning and then invasion of the rebel region itself was the immediate business of his office. The first six months of Putin’s presidency was one of all-out war in the North Caucasus. He viewed its success as his making or breaking. ‘At first Putin was concentrating overwhelmingly on Chechnya,’ says Kasyanov, who claims this left him and the ministers room to draw up a reform agenda.

The early Putin was a war president. His main focus was the tank columns and ground forces he dispatched to Grozny. This has had a huge effect on his world-view. Putin was as shaped by the apartment bombings and the Chechen war as George W. Bush was by 9/11 and his wars in Iraq and Afghanistan. Nothing mattered more to Putin in his first year in power. ‘My mission,’ he declared, ‘my historic mission – it may sound lofty, but it’s true – is to resolve the situation in the Northern Caucasus.’ 8

Putin fought this war in an apocalyptic state. His conviction that without him Russia stands on the verge of Yugoslav-style wars has not dissipated. During his first months in office, the Russian Army laid siege to Grozny. The result was described by the United Nations as ‘the most destroyed city on earth’. 9At every stage Putin was constantly receiving updates from the front. The war hung over his mind and government. His economic advisor Andrei Illiaronov remembers that when Putin received the news that one of the last Chechen strongholds had fallen during a routine meeting, he burst out, ‘Well, we have rolled over Shatoy.’ 10

Kasyanov looks back: ‘You must understand that I really believed, we really hoped that Putin could stop people dying from terrorist attacks on the streets when he assumed power after the apartment bombings. This is why we tolerated measures that in retrospect were too much and too harsh.’ As a result, their initial politics were sold to the country as something akin to a ‘state of emergency’. Yet tolerance for ‘temporary measures’ to stabilize the state, which then became permanent features, is a common way in which authoritarian regimes come about.

War put the first clamps on the media. These new rules were applied first to Russian war correspondents. Their graphic, brave but sensationalist reporting had swung the public against the first Chechen war. Putin would not let it happen again. Reporters and editors were first told, then pressured, to be ‘patriotic’. Then they were warned. In the liberal newspaper Kommersant a Kremlin spokesman made it clear, ‘When the nation mobilizes its forces to achieve some task, that imposes obligations on everyone, including the media.’ 11

It wasn’t long before an example was made of someone: the passionate and pro-Chechen reporter Andrei Babitsky. He had enraged the authorities with comments excusing rebel atrocities. Born in Moscow and a Russian citizen, Babitsky was apprehended by Russian forces while trying to report from the siege of Grozny. He was detained, then swapped with Chechen rebels for captured troops as if an enemy combatant. The new president shrugged, ‘So you say that he is a Russian citizen. Then he should have acted in accordance with the laws of your country, if you want to be protected by those laws.’ 12

According to Putin, this war was not just about Chechnya – but about Russia, about ending an epoch: ‘What’s the situation in Northern Caucasus and in Chechnya today? It’s a continuation of the collapse of the USSR.’ 13This time the army was not bogged down and defeated. Russian forces recaptured Grozny by February 2000 and direct rule from Moscow was re-established by May. The last towns and villages held by Chechen insurgents were brought under Russian control by the following winter. Chechen fighters retreated to the mountains to begin a long guerrilla war – but by the time a rigged ‘referendum’ in 2003 installed Akhmad Kadyrov as Moscow’s Chechen in Grozny, it looked like Putin had succeeded where Yeltsin had failed. He had stopped Russia falling apart.

In their first few months in office Putin and Kasyanov were waging a two-front war for legitimacy: one a battle for Chechnya and the other a struggle to push through economic reforms that had stalled in the late 1990s. Their work was Putin’s first ‘tandem’ and their quick victories on these two fronts secured the new regime’s legitimacy amongst the elite. Putin was no longer seen as a ‘man from nowhere’ but as a man with achievements. Kasyanov recalls:

‘The consensus was based on two things: order and reforms. We felt that Putin was the man strong enough, that he was the solution that could bring order to the country. The other element was reform – to implement reforms that had been blocked. Putin really did capture hopes then – hope for order and hope for reform.’

Kasyanov himself was troubled by Putin, but not troubled enough to quit. In conversation he is coy about why he remained in government, but admits he was unnerved by the moves against the media. He says, ‘at times I could have done more’. Perhaps he did not heed the signs. Kasyanov says he first felt real unease at a 1999 banquet hosted in the FSB headquarters, the notorious Lubyanka. Putin proposed a toast with ‘great enthusiasm’, before solemnly declaring: ‘Dear Comrades, I would like to announce to you that the group of FSB agents that you sent to work undercover in the government has accomplished the first part of its mission.’ 14

The hall exploded in cheers. Kasyanov recalls, ‘There, at the banquet, I took it as a not too successful joke in a traditional style for the audience. But, later that day, the thought flashed through my mind: ‘But what if in the words of the President, perhaps, lay a deeper meaning?’ 15