The New Tsar (60 page)

The pamphlet, like the
Moskovsky Korrespondent
article, sought to break the
omertà
that permeated the Kremlin in Putin’s time, especially when it involved the most secret parts of the president’s biography. The authors not only detailed Kovalchuk’s rise, but questioned the offloading of Gazprom assets, the profits of Roman Abramovich, the murky business of the gas middleman in Ukraine, RosUkrEnergo, and the furtive consolidation of lucrative exports by Gennady Timchenko, founder of Gunvor, the trading company based in Switzerland. With the exception of Abramovich, these new tycoons had remained relatively unknown throughout Putin’s eight years as president. They were barely mentioned in the media, and when they were it was usually with abundant caveats about the sources of the information. Timchenko’s companies now handled the contracts for nearly a third of Russia’s oil exports, including most of those of Rosneft since its takeover of Yukos’s assets. Timchenko, lean and silver-haired, shared Putin’s love of energy markets and politics, as well as judo, but he remained so secretive that suspicion lingered that he had a KGB past, which he would later deny. He carried a Finnish passport as well as a Russian one, and lived in Cologny, Switzerland, in
a villa overlooking Lake Geneva. Few photographs even existed of him then, and he granted even fewer interviews. (When he finally gave one to
The Wall Street Journal
four months after the pamphlet appeared, he did so on the condition that he would not be photographed and the location of his company headquarters would not be disclosed.
²⁴
) Timchenko denied having more than a passing acquaintance with Putin, insisting, falsely, that they were not friends, and even sued
The Economist
for suggesting otherwise in an article titled “Grease My Palm.”
²⁵
Yet as their fortunes grew, it became harder for the Putin oligarchy to remain secret. Kovalchuk and Timchenko both debuted on the
Forbes
list of billionaires the month after the pamphlet appeared. The Rotenberg brothers followed not long after that.

Stanislav Belkovsky, the impish, bushy-bearded, bespectacled political strategist who had authored “The State and the Oligarchs” report on the eve of the assault on Yukos, went even further than Nemtsov and Milov. He claimed that Timchenko acted as a proxy and a partner for Putin, who owned at least part of Gunvor, as well as shares in Gazprom and Surgutneftegaz. He estimated—speculated, really—that Putin’s net worth amounted to $40 billion, a figure that was close to a secret estimate by the Central Intelligence Agency a year before, perhaps because its analysts were assessing the same sources as Belkovsky’s, or Belkovsky’s own claims.
²⁶
Belkovsky insisted his sources were Kremlin insiders—and his previous associations with Igor Sechin and others made this seem plausible—but he also acknowledged he had no documentary evidence. That his critiques of Putin over the years had not endangered him lent some credibility to the claims.

Putin responded with humor and then with seething contempt when asked about the allegations at his last press conference as president, held the month before Medvedev’s election that March. Was it true that Putin was the richest man in Europe? “This is true,” he replied. “I am the richest person not only in Europe but in the world: I collect emotions. I am rich in that the people of Russia twice entrusted me with leadership of such a great country as Russia. I believe that this is my greatest wealth.” He then dismissed Belkovsky’s allegations, which he acknowledged having read, as “rubbish.” “They dug it all out of their nose and smeared it on their papers.”

If the paper trail of Putin’s personal wealth was impossible to trace, it was becoming harder for the Kremlin to dismiss the evidence of the interlocking connections among his circle of friends, including Kabayeva.
Only weeks after Putin departed the Kremlin, Kabayeva’s name appeared on the passenger manifest of a private jet that flew from Switzerland to Prague and then to Sochi, the future site of the Olympics, where Putin would spend more and more of his time as he dispensed the contracts to build the facilities there. Also on the flight was Vladimir Kozhin, who since 2000 had served as the head of the Kremlin property administration office where Putin first worked when he moved to Moscow, and two businessmen and associates of Putin’s: Dmitri Gorelov, an owner of the medical supply company Petromed, and Nikolai Shamalov, who had steered donations to it. What would not be known for two more years was that Shamalov and Gorelov were also the principal shareholders of an offshore company called Rosinvest, created on Putin’s instructions in 2005. Among its supposed investments was the construction of an enormous villa on the Black Sea coast near Sochi, the one described as “fit for a tsar.” It was surrounded by a wall and security gates adorned with the Russian state emblem; it contained three helicopter pads, a service building, a gymnasium, a bungalow, and an amphitheater, in addition to the main house. The private jet that carried them and a crew of three Finns from Switzerland to Sochi that day in May belonged to Airfix Aviation, which was then wholly owned by Gennady Timchenko.
²⁷

The surfacing of all these allegations at the end of Putin’s presidency created an expectation—a vague hope, really—that the political transition would make change possible. The report by Nemtsov and Milov read like a policy platform for the opposition in a presidential campaign that never really took place. It called for the reforms that Putin had promised but never delivered: a fight against corruption among the police and prosecutors; new laws prohibiting conflicts of interest and business by lawmakers; the professionalization of the army; the construction of modern roads; the creation of a working health care system, whose absence had contributed to the demographic slump of the population and a life expectancy for men especially that, while now rising, remained far below the levels of Europe or North America. Putin, they argued, had squandered the rise in energy prices that fueled the undeniable boom, especially in Moscow, which glittered as it never had before. Even with Putin set to remain as prime minister, many wanted to believe that Putin planned eventually to cede political control to a new generation of leaders. With Medvedev at the helm, Putin could become Russia’s Deng Xiaoping, officially handing over the reins while wielding power from behind the scenes to ensure the fulfillment of his policies—as Deng did
for another five years until his death in 1997. Many people close to Putin believed it, and he did not tell them otherwise—even Medvedev, who had spent the previous eight years at his side in the Kremlin. Medvedev voiced many of the same concerns that these two critics had detailed. He believed in modernity, a transition to a freer market and political society, or at least he said so. “Freedom is better than non-freedom,” he said so often it became a slogan of his presidency. It was a banal observation, but after Putin’s tenure, it was enough to inspire hope.

When the public scandal broke over Putin’s relationship with Kabayeva, the Duma promptly dusted off legislation that toughened the country’s libel laws, equating the “dissemination of deliberately false information damaging individual honor and dignity” with the crimes of promoting terrorism or ethnic strife. The legislation not only prescribed civil penalties for the victims of libel, but allowed the government to shutter offending news organizations. A week after Putin denounced the article on the state of his marriage, the bill passed its first reading with 399 votes; only one deputy dared to vote against it. By the time the legislation passed in its final form, though, Medvedev had already been elected president. In one of the first signs he might try to demonstrate a degree of independence and perhaps chart a new course, he vetoed it.

PART FOUR

CHAPTER 19

The Regency

O
n the night of August 7, 2008, Dmitri Medvedev, now the third president of Russia, was on a sailboat on the Volga River with his wife, Svetlana, and their son, Ilya, then just a teenager. It was a working vacation in the languid holiday month. Medvedev had spent the day in the ancient city of Kazan, the capital of Tatarstan, a region conquered by Ivan the Terrible in the sixteenth century. There he reviewed preparations for the Universiade, the biennial international collegiate sporting competition, which would be held there in the summer of 2013, as a rehearsal for hosting the Winter Olympics in Sochi eight months later. He had traveled the day before in a neighboring region, Chuvashia, where he discussed plans to create a modern library network. The morning before that he attended the funeral of the Soviet dissident Aleksandr Solzhenitsyn, who had died in Moscow on August 3, thoroughly rehabilitated in post-Soviet culture as a state-decorated admirer of Vladimir Putin.
¹

Medvedev had been president for three months, but it seemed as if he were simply carrying on with the duties he had had as the unprepossessing first deputy prime minister, not the commander in chief of a resurgent, nuclear-armed state. His election in March had been no more in doubt than Putin’s had four years before, even though he had no political base of his own, no particular platform, and no mandate from a populace hungry for change. On the contrary, the entirety of Medvedev’s presidency rested on the premise that the people wanted not change, but stability. Had the voters been given the choice, they almost certainly would have elected Putin again, but they had accepted his choice as heir because Putin wished it so. So Medvedev cruised to a convincing victory in a managed election that saw prominent opponents of Putin’s rule, including Mikhail Kasyanov and Garry Kasparov, blocked from registering as candidates, as they had been in the Duma elections in December
2007. Kasparov, despite his fame and financial resources, could not even manage to rent a hall large enough to hold a nominating convention, as required by law. Kasyanov was disqualified on the charge that his campaign had “forged” more than 13 percent of the signatures needed to nominate him. Another “liberal” candidate, Andrei Bogdanov, encountered no such obstacles with his signatures. He was a political strategist and a Free Mason from the very edge of obscurity, elected the previous year as the Grand Master of the Grand Lodge of Russia. The Kremlin orchestrated his candidacy as a fallback in the event no one else bothered to run.
²

Medvedev performed his assigned role, eschewing retail campaigning and refusing to debate his challengers, who in addition to Bogdanov included the old stalwarts who had forgone a challenge against Putin in 2004: the Communist Gennady Zyuganov and the nationalist jester Vladimir Zhirinovsky. Medvedev simply went about his deputy ministerial duties, lionized by the state television channels, with his patron never far removed from the picture. He was Putin’s choice, and therefore the only one. He was the heir, the tsarevich, simply awaiting popular affirmation. The short political campaign was so transparently contrived that Mikhail Gorbachev publicly rebuked the Kremlin. “Something is wrong with our elections,” he said, but his was a moral voice of authority from a receding and discredited past, and few paid heed, certainly not the state media.
³
When the ballots were counted, Zyuganov trailed a distant second with 18 percent of the vote. Bogdanov received fewer than a million votes, fewer in fact than the number of spoiled or blank ballots. Medvedev, who had no political experience of his own, became the youngest elected president. He was only forty-three. He won 71.2 percent of the vote, a tally that was conspicuously—and widely seen as deliberately—a slight decrease from Putin’s 71.9 percent four years before.

From the moment he took office in May, Medvedev struggled to emerge out of the shadow of the man who had elevated him to the heights of power. Yeltsin had quietly stepped out of the public limelight from the day he appointed Putin, but now Putin strode confidently through Medvedev’s inauguration. He opened the ceremony in the Kremlin with an unprecedented valedictory speech that affirmed, unmistakably to the assembled elite in the Grand Palace, that he had no intention of disappearing from the public stage. Medvedev hoped to make a quick impression on the world stage, visiting Germany, Russia’s closest trading
partner in Europe, but Putin preempted his first official visit with his own visit to France. The chairman of the Federation Council’s foreign affairs committee, Mikhail Margelov, told a visiting American official that Medvedev was a gifted, if yet unformed “student who had learned from his teachers,” but the “dean of faculty” remained Putin.
⁴
Putin, he said, genuinely wanted to cede, albeit gradually, the duties of the head of state, especially foreign affairs, but Medvedev struggled to extend his authority over a bureaucracy conditioned after eight years to respond to Putin.

Yet with his mild, bookish temperament, Medvedev at least changed the tone of the Kremlin. During his campaign and his first weeks in office, he spoke of civil liberties, economic modernization, and the need to end rampant corruption and the “legal nihilism” that characterized Russian politics and society. Putin had offered similar pledges, but Medvedev proved far less bellicose, less conditional. He sounded eager to present a different image of leadership, to prove that the transition was a substantive, not purely symbolic, one. Where Putin was steely and brittle, Medvedev seemed gentle and open. He delighted in using modern devices (Steve Jobs would give him an iPhone in 2010) and opened accounts on social websites, where he posted photographs he took as a hobby.

Despite Putin’s prominence as prime minister, many began to believe that Medvedev would carry out the liberalizing reforms that Putin had failed to deliver. One of those who found hope in Medvedev’s promise remained in the Siberian cell where he had been confined: Mikhail Khodorkovsky. He was now eligible for parole, and his lawyers appealed in July for an early release.
⁵
Another was the American seeking to replace George Bush as president of the United States: Barack Obama. As Medvedev’s boat rocked in the gentle flow of the Volga that night in August, his presidency seemed to be on the edge of an optimistic new era. Instead, he was about to face his gravest challenge. He had not even reached his hundredth day in office.