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

When Putin first sat in Yeltsin’s chair, the Kremlin lived in fear of the two great ‘media oligarchs’: Vladimir Gusinsky of NTV and Boris Berezovsky of ORT. Both thought Putin was a provincial bureaucrat who they could push about. They were archetypal oligarchs – both brilliant, both Jewish, both excluded from the ‘Slavs only’ club of the inner sanctums of the KGB, the finest Soviet research institutes and the upper echelons of the party itself. Whilst Putin was preparing for his dream job as foreign intelligence officer, they were festering in dead ends in the run-up to perestroika. Gusinsky was an illegal ‘gypsy cab’ driver; Berezovsky was a frustrated mathematician without his own car.

Then the tables turned. Both had sussed the financial promise of post-communism whilst Putin was still shell-shocked, watching the unravelling of Soviet power in Dresden. By the time Yeltsin was considering Putin as his successor, the old Soviet power dynamics were topsy-turvy. These formerly fringe men now had TV channels with the ability to make or break government policy by whipping up their millions of viewers to such an extent that they thought they could pitch up in government offices and ask for $100 million. Putin feared these stations. They had such huge audiences they could have undermined a fragile regime if he botched his relationship with them.

After conniving to install Putin, Berezovsky felt strong enough to publicly boast that he was the manipulator of Moscow. ‘It is acceptable,’ he claimed, ‘indeed necessary to interfere directly in the political process to defend democracy.’ 21Yet in the weeks after his inauguration, the new president made a comment flatly contradicting him. It confused and unnerved Moscow. ‘These people who fuse, or who help a fusion of power and capital, there will be no oligarchs or the like as a class.’ 22It sounded eerily Stalinist. It was a promise to ‘liquidate the oligarchs as a class’. 23This surprised the shabby city, where the tycoons still had the wardrobes of bandits – which had expected Yeltsin’s heir to be the protector of Berezovsky and the oligarchy against those they painted as unreconstructed communists or ex-KGB revanchists. Berezovsky had admired Putin for being ‘brave’. He had not understood that he was also ruthless.

Off the airwaves, Putin behaved rather differently. He was conscious of the limits of his power over the oligarchs. They had funded his campaign. They hoped to influence him as they had Yeltsin. Yet the public saw them as little better than thieves. Inside the security establishment that had reared the new president, it was considered criminal, even absurd, that a bunch of businessmen could have been handed over control of the country’s natural resources for next to nothing. Whatever Putin’s personal feelings towards the oligarchs, he offered them a compromise in July 2000. Gathering the country’s twenty-one leading tycoons in the Kremlin he made a simple deal – they could keep their businesses, if they stayed out of politics. Two men were not invited – Berezovsky and Gusinsky.

What was happening to the uninvited oligarchs was an example of how expensive it would be to refuse Putin’s offer. He had already gone after Gusinsky. He despised him. Gusinsky had refused to support Putin in the elections and his channel had dedicated only 5 per cent of its coverage to the pro-Kremlin party Unity, almost all of it negative, in the 1999 vote for the Duma. 24To make matters worse, Gusinsky had shown a documentary two nights before the presidential elections hinting at FSB involvement in the apartment bombings. 25And he had asked for more money.

Putin wanted to illustrate in the plainest financial terms that the era of an extorted government subsidizing oligarchs was over. So, he asked for Gusinsky’s company to pay back the 1996 loan from Gazprom. It was nothing less than asking him to return Yeltsin’s bribe. The tycoon at first didn’t understand what was happening. He was arrested, thrown into the overcrowded and flea-ridden Butyrka jail and under duress made to sign over stakes in NTV to Gazprom. It was the beginning of a legal assault to grab the channel through its debts to the state. In June 2000, less than five weeks after Putin’s inauguration, Gusinsky fled the country – and the twenty-one businessmen invited to meet Putin the following month to hear the terms of ‘his deal’ took note.

It appeared everyone had understood – apart from Berezovsky – that they had made a mistake. Putin was the protector of no class. But Berezovsky was busy coming up with more fantastic ideas. He mused that Russia should be converted into a confederation of independent states. 26He was beginning to fight with Putin, criticizing his policies and preparing to throw ORT into battle against him. This is how Berezovsky had always operated under Yeltsin, supporting him only then to swivel and undermine him. The former president even once lamented that he wished he could send Berezovsky on a business trip abroad – ‘forever’. 27Yet Berezovsky underestimated Putin.

The end came for Berezovsky when his TV station wounded Putin. It happened when it exposed the new leader as a bad communicator. Just months after Putin’s inauguration he made his first gaffe, in August 2000. It could have proved fatal. The Kursk – the pride of the Russian fleet, one of the nation’s most modern submarines, which only a year before had been tracking the US Sixth Fleet during the bombing of Kosovo – suffered a crippling explosion and sunk to the bottom of the Barents Sea. The sailors called for help; they were asphyxiated when none came. That nothing could be done stunned the country – the submarine had been on a training exercise. The event saw the public seized with mass grief, not unlike the response in Britain to the car crash that killed Princess Diana. But at the time of the sinking Putin was on holiday; he did not return for five days. It was as if Tony Blair had refused to return to London for almost a week after Diana had died.

Berezovsky’s ORT began rolling out negative coverage. In a panic, the key PR hands in the Kremlin convinced Putin to act. He flew to the scene but, without a crowd of carefully preselected people, he completely mishandled the genuine grieving families. Dressed in black for mourning, but coming across as a shifty mobster in a polo neck, he showed his stress and found difficulties in communicating. At times he seemed wide-eyed. He offered only the most pitiful of excuses:

‘There have always been tragedies at sea, including in the time we thought we were living in a very successful country. There have always been tragedies. I just never thought that things were in this kind of condition.’ 28

ORT’s cameras caught all of this. The channel blamed him for the deaths of the 118 sailors, accusing him of preferring to let them die rather than accept the foreign help that had been offered. It was media disaster for Putin and a demonstration of the power of Berezovsky’s ORT. But his protégé was determined that a TV station would never hurt him again. After this humiliation, Putin chose to confront his former patron, venomously saying in October 2000, ‘If necessary we will destroy these instruments of blackmail.’ This is exactly what he did in the months that followed. At that moment Leonid Parfyonov, one of the most famous journalists in the country and the face of Russian television, realized that every TV screen in the country was about to be turned into a Kremlin megaphone, recalling:

It was between the Kursk and the NTV affair that the realization dawned on me that we were moving into an authoritarian regime based on control of TV. These events showed that you could say power was bad or dysfunctional. But now you could no longer say power could make a mistake.